blue jeans Made in Mexico.

Men’s jeans worth over US $8 billion

Uncertainty over NAFTA creates worries in the garment industry

Half the jeans sold in the United States are made in Mexico, making it one of the industries at risk with the renegotiation of the North American Free Trade Agreement (NAFTA).

Mexican firms are the second biggest suppliers of denim to the U.S. but industry specialists warn that opening NAFTA for negotiation could mean trouble for the garment industry, says a report by BBC Mundo.

More than 2,000 manufacturers spread throughout Mexico are dedicated to denim and jeans production, notably in the states of México, Durango, Puebla and Guanajuato.

Data kept by the Social Security Institute (IMSS) indicates that more than 125,000 people depend on the industry for their livelihood.

But jobs on the other side of the border could also be affected.

According to the AAFA, the American Apparel & Footwear Association, over 64,000 U.S. workers depend on the Mexico-U.S. denim trade, particularly in the states of North and South Carolina and Georgia.

Consumers would also end up paying should the U.S. impose the tariffs it has threatened to put on products imported from Mexico.

The binational trade of denim products consists mostly in U.S. firms sending the prepared fabric to Mexican textile assembly plants, where the garments are sewn and given finishing touches. Once finished, the final product is shipped back north.

Other firms purchase garments made 100% in Mexico and sell them in the U.S.

In both cases, NAFTA is an essential part of the process as the back and forth movement of products across the border is tariff-free.

The annual trade in one single denim garment — men’s jeans — is worth more than US $8 billion, says the National Chamber of the Apparel Industry (Canaive).

The president of the Tehuacán, Puebla, chapter of the chamber told BBC Mundo that there is a widespread sense of uncertainty — a widely-held sentiment in Mexico, these days — among jeans producers and manufacturers in the country.

“We are waiting for whatever might happen,” said Rufino López Pérez.

On the other hand, there are some who believe it would be complicated to make drastic changes in trade policies, especially because imposing tariffs on a product so popular among U.S. consumers would cause several problems.

Despite the upcoming trade negotiations between Mexico and the United States, expected to start in June, trade carries on.

“More partners from the United States have approached us,” said an industry leader from Puebla.

“Response times in Mexico are faster than in China. That keeps many firms going while NAFTA is negotiated,” added Gustavo Bojalil.

Source: BBC Mundo (sp)

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