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Mexico’s clothing businesses expect the worst from NAFTA negotiations

Business is booming for a clothing assembly factory located in the central Mexican state of Puebla. Exports are a success due to the North American Free Trade Agreement (NAFTA). Every month, Confecciones de Punta which produces 1,00,000 pieces of clothing, exports directly to stores in Los Angeles, New York and Houston. Jose Luis Hachity, CEO, for nearly 35 years says, “When NAFTA came into effect, we did not have to go to the US and make sales. Instead, US clothing industry leaders came looking for us.”

However, many small and medium-sized Mexican businesses fear that the end of NAFTA is at hand. He says even if the US withdraws from the trade deal, geographic proximity to the US gives Mexico a trade advantage. Hachity recounts, “We are more efficient when it comes to logistics because we are delivering our products within three weeks. No other country, not even Asian ones, can do that. Nowadays, that is crucial in the fast-paced fashion industry where designs change from one month to the next. We are able to keep up with those changes.”

Trade expert Luz Maria de la Mora was one within Mexico’s original team of NAFTA negotiators in the mid 1990s. She assesses, “Overall let’s say that tomorrow President Trump by his policies he would eliminate completely trade deficit with Mexico, the trade deficit will increase with another country because there is an appetite, there is a need in the US for have this kind of imports.”

Mexican clothing makers say half a million textile jobs could depend on the outcome of NAFTA re-negotiations, however, Mexican textile factory owners are working on new strategies and are sourcing new markets, in case the U.S. raises import duties.