The US-Central America Free Trade Agreement (CAFTA) was signed on May 28, 2004 by the U.S., Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. On August 15, 2004 the Dominican Republic was incorporated into the agreement. On July 29, 2005 after more than a year of political wrangling and deal-making the US House of Representatives approved CAFTA by a vote of 217-215. The Terms of CAFTA are to be implemented as of January 1, 2006.

CAFTA will allow clothing from Central America to be exported to the United States without paying import taxes (called tariffs) and will replace the US Caribbean Basin Trade Partnership Act (CBTPA), which has been in effect since October 2000.

What will CAFTA will mean for the Central American garment industry?