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Trade Groups Pressure Clinton on Honduras

A coalition of fashion trade associations called on Secretary of State Hillary Clinton to pressure the Honduran government to fully restore commercial activity.

WASHINGTON — A coalition of fashion trade associations called on Secretary of State Hillary Clinton to pressure the Honduran government to fully restore commercial activity, as business came to a standstill last week, idling textile and apparel plants in that country and the U.S.

This story first appeared in the September 28, 2009 issue of WWD.  Subscribe Today.

The Honduran government imposed curfews and shut down the port of Puerto Cortes, the principal hub for Central American trade, after ex-President Manuel Zelaya, who was deposed by a military coup in June, covertly returned to the country to resolve the three-month political crisis.

While there were reports Friday the Honduran government had lifted the curfew and reopened the port, industry officials said problems persisted and the port was not fully operational.

It was the first time the fallout from the political turmoil disrupted apparel production in Honduras, jeopardizing billions of dollars worth of apparel shipments to the U.S., as well as exports of U.S. yarn and fabrics used in apparel made in the Central American country. Apparel and textile imports from Honduras totaled $2.27 billion for the year ending July 31, according to the U.S. Commerce Department.

“The crisis has caused commercial traffic to falter dramatically and textile and apparel plants in the United States and Honduras are already being idled and workers told to go home,” the trade associations, representing the fiber, textile, apparel, import and retail industries, wrote in a letter to Clinton on Friday.

A disruption in Honduras affects a long supply chain that crosses many borders in Central America and reaches to textile mills in the U.S., which exported $1.5 billion to Honduras last year.

“To give you a sense of the size of the damage being inflicted, Honduras normally ships 39 million garments a week to the United States,” the groups said. “If Honduras cannot ship, then U.S. plants cannot spin yarn, U.S. textile mills curtail production and U.S. cotton cannot be used.”

The groups said U.S. yarn and fabric producers were forced to curtail hours and eliminate shifts as a result of the turmoil in Honduras, while factories in other Central American countries were shut down because they could not get components from Honduras.

“We have heard that over two dozen U.S. textile plants [cut] production,” said Cass Johnson, president of the National Council of Textile Organizations, which is part of the coalition. “It’s a massive ripple effect.”

The coalition also includes the American Apparel & Footwear Association, the American Manufacturing Trade Action Coalition, the National Textile Association, the National Cotton Council and the U.S. Association of Importers of Textiles & Apparel.

Julia Hughes, senior vice president of international trade at the USA-ITA, said despite the concerns, there was no reason to panic.

“On the retail end, there have been some short-term disruptions, but nothing that has indicated a larger crisis,” Hughes said. “I have not heard that anyone has had a critical delivery missed.”