Textile Industry Reports Layoffs
By Katherine Stanley
Tico Times Staff
kstanley@ticotimes.net

Textile industry leaders used the announcement of 400 layoffs by Textilera VF, the Costa Rican operation of Lee and Wrangler, as an opportunity to reiterate the need for the passage of the Central American Free-Trade Agreement with the United States (CAFTA) in order to avoid future job losses.

“The world has become much more competitive for the textile industry,” said Miguel Schyfter, president of the National Association of Textile Industry Exporters, referring to the recent lifting of textile quotas that regulated apparel exports from China and India.

The quotas, put into place in 1974 to protect textile industries in Europe and North America from third-world competition, were later declared to be a hindrance to free trade by the World Trade Organization (WTO). The gradual phasing out of the quotas began in 1995 and ended Jan. 1 of this year (TT, Jan. 7, 2005).

Schyfter and other leaders said yesterday this new wave of competition, combined with doubt over the future of CAFTA, could swamp Costa Rican textile exporters and cause foreign firms to dismantle their operations here.

As usual among business executives these days, those present targeted President Abel Pacheco, who refuses to send CAFTA to the Legislative Assembly until the assembly reforms the tax code, as a major obstacle to Costa Rica's economic future.

Marco Vinicio Ruíz, former president of the Union of Private-Sector Chambers and Associations (UCCAEP), said Pacheco's position is “wrong, with all due respect.”

He added that Pacheco is “well-intentioned...but badly advised,” and went on to suggest that pressure from workers' unions that oppose the trade agreement has swayed the President's opinion of CAFTA.

Schyfter said he and other leaders had a meeting scheduled with Pacheco last week, but that the President was forced to cancel in order to visit the Caribbean-slope region, where floods devastated crops and left many homeless (TT, Jan. 14). Instead, Presidency Minister Lineth Saborío heard the executives' concerns.

“We told her that for the textile industry, time is of the essence,” he said.

Yvette Arias, a regional director for Textilera VF, said Pacheco's position contradicts itself. The President claims to be defending the rights of poor by insisting upon tax reform, she said, but his position could result in job loss and drive up poverty rates.

“It is very hard to see the tears of a mother” who has lost her job, Arias said.

The 400 layoffs announced yesterday mean a total of 750 textile workers have been fired during the past year, according to a statement from the textile union. Since the textile industry in Costa Rica provides approximately 15,000 jobs in direct employment and 5,000 in indirect employment, the prospect of additional losses could drive up poverty rates, leaders argued.

Ruíz also pointed out that Costa Rica does not have an unlimited period of time in which to ratify CAFTA.

“There is a clause in CAFTA that says a signatory country that does not complete (ratification) within two years, abandons the treaty,” Ruíz said.

New U.S. Secretary of State
Outlines Policy for Latin America

Denying that the White House has let its official relations with Latin America gather dust while its attention is riveted on Iraq and terrorism, newly appointed Secretary of State Condoleezza Rice told members of the U.S. Senate's Foreign Relations Committee she would work for the rapid approval of the Central American Free-Trade Agreement with the United States (CAFTA) and take measures to make sure certain elected leaders walk the line.

Rice said CAFTA will be sent to Congress “as soon as possible” for ratification.

Costa Rica, Nicaragua, Honduras, El Salvador and Guatemala, along with the United States, signed CAFTA in May 2004. The Dominican Republic joined the agreement in August. The United States and at least one other signatory country must sign the agreement for it to take effect between those nations. El Salvador approved the trade pact late last year.

Rice called Venezuela a “negative force” in Latin America, and said she would ask the Organization of American States (OAS) to “hold those leaders responsible who don't govern democratically, even if they have been democratically elected,” though she gave no details about possible measures the state might take against Venezuela.

Latin America is “a region that implores participation and contact in a more direct form than that which we have done in years past,” U.S. Republican Senator Mel Martínez said, and Democratic Senator Christopher Dodd said the United States has “many problems in this region.”

Rice defended U.S. President George Bush's policy in Latin America and said the future of the region is “obviously something extremely important in our agenda.”

She also mentioned strengthening the U.S. trade embargo against Cuba, suggested U.N. security forces in Haiti should adopt a “more energetic” attitude against violent zones in the country, and hinted at the possibility of an immigration agreement with Mexico.

– EFE