The Complications of Trade

The debate over the Central American Free Trade Agreement (CAFTA) shows the interconnection of workers' fates in factories around the globe. On the Bloomberg financial web site today is a story the President Bush is making inroads in getting the US textile industry interests to support CAFTA. Central America, including El Salvador, is a significant export market for US textile makers. Why Central America? Because workers in maquiladora factories there turn the textiles into clothing which is then re-imported into the United States. As I noted a month ago, El Salvador is the leading exporter of cotton underwear to the United States. President Bush is arguing that CAFTA is necessary for the Central American economies to keep those clothing factories and to keep buying textile from the U.S. But as pointed out here, there is little reason to believe that CAFTA will protect the Salvadoran clothing maquiladoras from the low wage production juggernaut which is China.