The textile and apparel value chain has changed rapidly in the past decade. In the context of trade liberalization and the phase-out of the global quota regime, textile and garment production has become more concentrated in a smaller set of countries, with Asian exporters such as China, Bangladesh and Vietnam claiming an increasing share of the world import market. At the same time, preferential trade agreements have become more important in maintaining textile and apparel production in the western hemisphere. With the looming expiration of the Tariff Preference Levels (TPLs) granted to Nicaragua under the Central American Free Trade Agreement (CAFTA), trade policy is at a critical juncture. This report explores these issues by examining how textile and apparel manufacturers in the Americas are linked to the value chains coordinated by U.S. importers. Our key finding is that all segments of the textile and apparel value chain in the Americas—U.S. yarn and fabric manufacturers as well as apparel producers in the CAFTA region—benefit from measures, such as the TPL one-to-one benefit, that encourage importers to maintain or expand their sourcing in the western hemisphere.
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