Thanks to CAFTA-DR and its yarn-forward provision, which allows for duty-free access for yarn, fabric and garments produced in Central America, the region has become a vertical sourcing destination that’s drawn investment, allowing it to hone and broaden its capabilities. Today, CAFTA-DR countries have established both a cotton and synthetic fibers cluster capable of spinning through finished garments — all within close proximity to the U.S. market. The result has been a boon for El Salvador, which Patricia Figueroa, executive director of the Chamber of the Textile, Clothing and Free Zones Industry of El Salvador (CAMTEX), said has resulted in investments from companies in countries like the U.S., South Korea and Brazil.
“Behind this momentum is a country that has fundamentally transformed,” she said “El Salvador today offers legal certainty, a dollarized economy, the safest environment in the region, a trade facilitation framework that has become a regional benchmark, and infrastructure investments — in ports, roads and airports — that are built for the demands of a modern, agile supply chain.”
Figueroa added the new Framework for Reciprocal Trade Agreement with the United States will only bolster the country’s position.
Here, Figueroa outlines how the country continues to evolve, highlights the trade agreements that promise to further accelerate business there and details the role sustainability plays in the region.
HGI: How would you characterize business currently for CAMTEX textile and apparel producers?
PF: I would describe the current business environment as challenging but clearly opportunity-driven. El Salvador’s textile and apparel industry remains a globally relevant player in our main market — in 2025, we ranked as the 11th largest apparel supplier to the United States, representing 30% of our country’s total exports and positioning ourselves as the leading export sector nationwide. It’s also worth mentioning that 27% of the sector’s exports are destined for Central America, many of which are raw materials; this speaks to the region’s production chain.
This is an industry highly sensitive to the international context; volatility in global supply chains has a direct impact on the performance of our sector. Rising raw material costs and geopolitical uncertainty continue to put pressure on margins and planning horizons. However, global supply chains are undergoing a significant reconfiguration, and buyers are increasingly prioritizing closer and more resilient supply relationships — and this is precisely where El Salvador stands out.
Our industry has demonstrated it possesses the attributes the market demands: agility, reliability, vertical integration and proximity to the market. Combined with meaningful national improvements in infrastructure, trade facilitation and productive linkages across the value chain, El Salvador is well-positioned as a strategic partner for international buyers looking to build more efficient and agile supply chains.
HGI: How has the textile and apparel industry in El Salvador evolved over the past five years?
PF: Over the past five years, we have navigated an environment of constant change and significant uncertainty. Like the rest of the world, our industry faced a series of compounding challenges: shifts in post-pandemic consumer behavior, with more cautious spending patterns; container crises and port congestion, which drove up logistics costs and disrupted the global supply of raw materials; increases in oil prices and overall production costs; and severe inventory overstock in international markets since 2022. More recently, in 2025, generalized uncertainty in foreign trade due to tariff policies and geopolitical tensions has added another layer of complexity.
The figures reflect these challenges — exports between 2022 and 2025 show a decline, though the rate of that decline has been slowing in recent years. In 2025, we anticipate a smaller contraction of 7%, which allows us to forecast a moderate recovery in 2026, driven by the new [Framework for Reciprocal Trade] agreement with the United States. That said, we must always remain attentive to developments in the international context.
Despite the volatility that has characterized global trade in recent years, our companies have continued to strengthen their operations through investments in expansion, technology, equipment, regulatory compliance, certified facilities and innovation. Beyond major acquisitions, new companies are also making targeted investments that reflect the industry’s shift toward sustainability, efficiency and adaptability to the new demands of international brands.
One of the most significant investments of this new era is the strategic acquisition made by one of the world’s leading apparel groups. [South Korean apparel manufacturer] SAE-A/Tegra’s acquisition of Swisstex El Salvador significantly enhances their manufacturing presence across North and Central America, creating a more robust regional network. This acquisition enables full package and open vertical flexibility, meaning the ability to work with third parties and complement existing supply chains. It represents a strategic leap forward in innovation, operational scale and sustainability leadership, reinforcing SAE-A/Tegra’s vision to lead the global textile and apparel industry through technology, talent, and strategic expansion.
HGI: In what ways is El Salvador — and the CAFTA-DR region — competitive with Asia? What are its main advantages?
PF: Our competitiveness with Asia lies in our strategic position, but also the CAFTA-DR region offers a vertically integrated supply chain that is unique in the Western Hemisphere. From fiber and yarn to fabric, finishing and full-package garment production, buyers can source within a single, well-coordinated regional ecosystem. This level of integration reduces lead times, minimizes exposure to multi-country logistics risks, and provides greater visibility and control over the entire production process — advantages that Asia, despite its scale, simply cannot replicate at this proximity to the U.S. market.
One of our strongest competitive advantages is our ability to handle shorter production runs — something increasingly valued by brands managing multiple seasons, capsule collections and rapid replenishment cycles. Logistics response times from Central America to the United States average approximately five days, compared to four weeks or more by sea freight from Asia — a decisive advantage for brands that need to react quickly to market signals.
Compliance is another area where the region stands out. Labor standards, environmental regulations, traceability requirements and supply chain transparency are not afterthoughts here; they are embedded in how our industry operates. For brands facing increasing scrutiny from regulators, consumers and investors, sourcing from a compliant and transparent supply chain is no longer optional. The CAFTA-DR region, and El Salvador in particular, offers that assurance.
At the country level, El Salvador has been making significant investments to further strengthen its competitive position. Ongoing improvements in road infrastructure, port modernization at Acajutla and streamlined border crossing processes — including the reduction of crossing times from hours to minutes at key transit points — are meaningfully reducing logistical friction.
Additionally, the advancement of the Central American Customs Union is creating a more seamless regional trade environment [currently among Guatemala, Honduras and El Salvador], enabling greater integration among member countries, reducing barriers to intra-regional movement of goods, and reinforcing the region’s appeal and textile as a unified and efficient sourcing destination.
For buyers who are rethinking their supply chains with a long-term lens, this combination — vertical integration, agility, compliance, proximity and a continuously improving logistics environment — makes the CAFTA-DR region, and El Salvador specifically, a compelling and strategic alternative to Asia.
“Global supply chains are undergoing a significant reconfiguration, and buyers are increasingly prioritizing closer and more resilient supply relationships — and this is precisely where El Salvador stands out.”
—Patricia Figueroa, CAMTEX
HGI: How are companies in the region working to become even more attractive?
PF: As I mentioned earlier, investment in our sector has continued on two fronts: companies already established in the country are deepening their capabilities, and new players are choosing El Salvador as their platform for growth.
On the innovation side, we are seeing compelling examples of how existing companies are raising the bar. Varsity Pro has formed a strategic alliance with NEXTIL to produce environmentally friendly garments using recycled fabrics, threads and vegetable-based dyes — directly serving the U.S. market and reflecting the growing demand for sustainable sourcing solutions. Meanwhile, CS Central America has invested in texturization equipment to improve production efficiency and better align its offer with the requirements of the U.S. and Mexican markets.
Beyond upgrades by established players, the global nearshoring shift is also bringing significant new investment into the country. Companies such as Makalot, Great King, HANSAE, Gildan, Superior Glove, Cygnus and Tefron, among others, have chosen El Salvador as their base, reinforcing the supply chain across critical segments including garment manufacturing, screen printing, seamless design and high-value-added products such as technical gloves.
What these investments have in common is a shared conviction: that El Salvador offers the right combination of talent, integration, compliance and market proximity to support long-term, strategic sourcing decisions. The region understands very well that it is no longer enough to be a nearby option — one must be a strategic option. And these investments are the clearest evidence that the market agrees.
HGI: How does the country rank in terms of sustainability practices?
PF: Sustainability is now a structural priority for our sector — and traceability is at the center of it. For our industry, traceability is not a buzzword; it is the factor that elevates us from being simply a manufacturer to being an ethical and strategic partner. It is what transforms “Made in El Salvador” into a global standard of integrity.
By controlling the chain from raw material — yarn — through to the finished garment, our sector ensures there are no missing links. This guarantees that the final product meets exactly the technical and quality specifications that global brands demand, while also providing the transparency that regulators, investors and consumers increasingly require.
This commitment is not self-declared — it is verified and certified at the international level. Certifications such as WRAP and ESG criteria ensure dignified labor conditions, the absence of child labor and industrial safety standards. Through frameworks like the Higg Index, Bluesign and ZDHC, our companies demonstrate responsible management of chemicals, water and energy. The Sustainable Apparel Coalition (SAC) provides ongoing auditing that gives buyers the assurance that their products are not linked to environmental harm or labor exploitation.
Traceability also plays a strategic commercial role. Full supply chain transparency is the “passport” that allows us to maximize the benefits of CAFTA-DR, specifically the yarn-forward rule of origin that enables duty-free access to the U.S. market. That level of compliance is only possible with complete and transparent control over the production process.
In this context, I also want to highlight Intradeco Holdings’ joint venture with Recover, a leading materials science company and large-scale producer of sustainable recycled cotton fiber, to expand textile recycling in El Salvador.
Knowing every step of the production chain allows our companies to respond more quickly to disruptions and adapt to shifting market demands. This visibility converts El Salvador into a truly strategic nearshoring partner — one where speed and transparency are not aspirations, but operating standards.
HGI: What areas does the country need to improve?
PF: Like any country competing for international investment, there are always areas where progress must continue. As I mentioned before, El Salvador has made substantial progress in trade facilitation. El Salvador has moved from participant to regional benchmark in trade facilitation. Through customs digitization, the modernization of key border crossings such as El Amatillo and Anguiatú, and 100% electronic procedures, the country has built one of the most agile and efficient commercial environments for nearshoring in Central America.
At the heart of this is the National Trade Facilitation Committee, where government and the private sector, including CAMTEX, work side by side to ensure that facilitation policies respond to real market needs. The Committee operates on three pillars: digitization and simplification,
transparency and predictability, and integrated border management.
The result is a seamless multimodal logistics corridor — efficient customs processes, port modernization through Yilport’s investment at Acajutla, and an expanded international airport — all functioning as one integrated system. This infrastructure investment, exceeding USD $620 million in road connectivity alone, alongside the USD $1.615 billion port modernization project, reflects the scale of the country’s commitment.
HGI: How is geopolitics impacting investment in El Salvador’s textile and garment industry?
PF: Geopolitics is changing the way companies evaluate their supply chains. Today, the analysis goes well beyond cost; it includes operational continuity, risk exposure, proximity to the end consumer and speed of response. In that context, El Salvador benefits from a strategic position in the Western Hemisphere and from a value proposition built on access, agility and regional integration. That is why we believe geopolitics is favoring those who can offer reliability — and that is one of our strongest attributes.
HGI: What has been the main impact of the U.S. trade war on exports?
PF: The main impact has been uncertainty. When international trade enters a period of volatility, many brands and buyers tend to act with greater caution, slowing down procurement decisions, adjusting projections, and, in some cases, postponing orders to various regions, including Central America.
This naturally affects exports, employment planning and the pace of investment. It can also slow down, at least temporarily, some nearshoring processes — not because the strategic rationale disappears, but because companies prioritize visibility and certainty before making expansion decisions.
However, from a medium- and long-term perspective, such circumstances also underscore the importance of having closer, more diversified, and more resilient supply chains, and in this regard, El Salvador and the region offer a highly compelling value proposition.
HGI: What benefits does the U.S.–El Salvador Framework for Reciprocal Trade Agreement, signed January 2026, have for this sector?
PF: It is, without a doubt, a factor that strengthens trust between the two markets. For our sector, the greatest benefit is that it fosters an environment of greater certainty, predictability and stability — three essential factors for attracting investment and making long-term sourcing decisions.
The textile and apparel industry relies heavily on clear rules. When there is a trade framework that facilitates preferential access, under defined conditions and with rules of origin that promote productive integration, a much more solid platform for growth is created. In practice, this strengthens the regional supply chain, boosts relationships with suppliers in the United States and the rest of Central America, and improves El Salvador’s competitive position within the nearshoring strategy for the U.S. market.
It is important to note that this framework comes with real commitments — not just declarations. Four legislative reforms have already been enacted, including amendments to customs legislation requiring proof that no imports from countries using forced labor enter El Salvador. This was published in our Diario Oficial. These are exactly the compliance assurances that responsible global brands need from their supply chain partners.
HGI: What is the outlook for El Salvador’s textile and garment industry over the next 3–5 years?
PF: The road ahead is demanding — tariff uncertainty, geopolitical tensions and shifting market dynamics are real challenges. But that is precisely the context in which El Salvador’s transformation becomes most meaningful.
The El Salvador of today is not the one buyers may have evaluated five or 10 years ago. Our industry has undergone a transformation in the depth of our production chains, operational efficiency and product diversity. The investments flowing into the sector — from established players and significant new entrants alike — are not incremental; they are structural. They reflect an industry that is not simply reacting to change but positioning itself to lead through it.
