The lack of restrictions on domestic raw materials, the Colombian apparel exports to the U.S.

Published: 07th April 2011
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In the first half of this year, Colombia's clothing exports to the United States is no longer rising sharply. Because the lack of raw materials, this low-cost countries, Colombia did not make full use of the treaty the United States duty-free advantages. Colombian authorities decided to subsidize cotton production, while the use of fabric in Mexico duty-free agreement will be discussed. Currently, Mexico is negotiating with the United States on the matter.
In the first half of this year, Colombia's clothing exports growth remained strong, primarily because neighboring countries - Venezuela, due to the demand rebound.
1-5 months of this year, Colombia's textile exports rose 46% to 90.17 million U.S. dollars, while clothing exports rose 21% to 304 million U.S. dollars. The exports of apparel exporters are far lower than Colombia in this year's financial plan, mainly due to slowdown in U.S. demand.
Better grades in Peru
In 2003, U.S. apparel imports from Colombia increased by 46%, the amount of increase in imports by 48% to 498 million U.S. dollars.
In the first half of this year, U.S. apparel imports from Colombia increased by 14.79%, imports increased by 15.74%. According to U.S. official statistics, in the first half of this year, U.S. apparel imports from Colombia in 2003 to 228 million U.S. dollars in the first half rose to 264 million U.S. dollars. Over the same period, U.S. imports from Peru in 2003 to 249 million U.S. dollars in the first half rose to 324 million U.S. dollars. Colombia and Peru's clothing if the use of the materials originated in the United States, then exported to the U.S. market can enjoy duty-free treatment. Peru has a high degree of vertical channels of cotton, while the apparent lack of domestic raw materials in Colombia.
In the first half of this year, U.S. apparel imports from Colombia, only 74% enjoy tariff-free entry conditions, the same period, 98% of Peru's products enjoy duty-free treatment. Clear signs that the gap between Colombia and Peru are being widened. Peru and Colombia are the countries with low labor costs, but close to the United States and Colombia because of more benefit.
The high cost of cotton
As the present value of money in Colombia, denouncing China's exporters led to a lack of domestic fabric production costs. Colombia has a strong textile industry, but should be additional investment in modernization of production capacity in the short term.
Although the Colombian authorities to attract foreign investment, but in the interest of safety, is still hampered the official export promotion programs in Colombia.
In the absence of large capacity cases, the Colombian authorities may, based on the future of the United States and the Andean countries of origin of the provisions of free trade negotiations in particular. For example, Colombia, U.S. officials might accept a limited use of Mexican fabrics.
The United States and Central America free trade agreement just completed has included such a provision. But Congress has yet to ratify the Central American Free Trade Agreement.
The United States and the Andean countries are negotiating free trade agreements, has conducted four rounds of discussions. There may be completed by the end of this year a free trade agreement negotiations.
Lower cotton costs
To reduce the cost of textile raw materials, the Colombian Government has just abolished the cotton import tariff from 10% to 20% of the Act.
Cotton processors increase its tariff to force them to accept the lowest domestic cotton prices. According to USDA reports, cotton producers and processors finally agreed that pricing according to the Far East Index A domestic cotton prices. However, cotton growers, the Government of Colombia will provide a higher rebate. In addition to looking for textile raw materials and difficulties, the Colombian garment exporters will face China in the post-quota era of competition is rising sharply.
In the past few months, the U.S. imports from Colombia, mainly in the 338/339 species (cotton knit shirts) and 347/348 species (cotton trousers). In the post-quota era, Colombia in these categories will lose out.

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