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RMG exports from Honduarn Maquilas face tough competition in US
27
Sep '10
According to a report published by the World Trade Organization (WTO), clothing materials and garments produced in the Honduran maquila (export processing regions) are facing tough competition in their most important market – the US.

The US imports 75 percent of the country's maquila exports. Most of the ventures in the region gain a lot of privilege from special trade agreements like the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).

The Maquilas produce the major items of Central American region's exports, which amounted to $2.8 billion in 2009 and constituted about 54% of the region's total exports.

Most of these factories in the maquila are garment and textile manufacturing units. They together produced about HNL62.7 billion ($3.32 billion) or 79.5 percent of the previous years' total produce.

According to the WTO report, about 90 percent of the country's total shipment of commodities for processing is constituted by garments, clothes, knitted or crocheted fabrics, yarn and thread.

The WTO trade experts believe that the tough competition faced by the country's enterprises in US, is partially because of the gradual termination of the preventive international import quota regime (MFA) in 2005. This stiff competition indicates that there is a fall in the employment generated and gross value added by the maquilan industry.

The number of workers recorded a fall to 121,700 in 2008 from 134,007 in 2007. It further fell to 104,048 in 2009. Likewise, the gross value added as a percentage of GDP fell to 5.9 percent in 2009 from 7.3 percent in 2007.

Fibre2fashion News Desk-India

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