The U.S. Trade Representative and five trade ministers from Central America countries met on January 6 to open formal negotiations for a U.S.-Central America Free Trade Agreement (CAFTA). The five central American countries are Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.  The goal of CAFTA is to eliminate virtually all trade barriers between the six countries.

Because Central America has grown in importance to the U.S. footwear and apparel and textile industries, negotiations have begun to eliminate trade barriers.

It was noted that over 16% of U.S. apparel imports and an increasing amount of footwear comes from this area. The U.S. textile industry reported that it purchased some $2 billion in material from that area last year.

Another incentive for removing the trade barriers derives from the fact that the American Apparel and Footwear Association as well as many of its members have become members of the recently formed Business Coalition for US/Central America Trade that hopes to ensure that CAFTA contains real benefits. AAFA president and chief executive officer Kevin M. Burke said at the launch of the organisation, “This is how I describe the way the negotiating process should be: simple and fast and the agreement has to be meaningful.”

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