At a clothing factory in Buenos Aires, numerous workers observe with concern as imported garments increase their market share while sewing machines remain unused – a vivid illustration of the challenges confronting Argentina’s textile sector in light of President Javier Milei’s trade liberalization initiatives. At Confecciones Seman SA, a manufacturer of suits and shirts, over 100 employees operate in a consistent cadence dictated by sewing machines. Up until two years prior, the factory’s output exceeded 3,000 suits monthly. It currently generates approximately fifty percent of that figure. As of 2023, Argentina’s textile sector has experienced a reduction of over 18,000 jobs and is functioning at merely one-third of its installed capacity, based on February data provided by the Analytica consultancy and the Federación de Industrias Textiles Argentinas. “All this drains your motivation,” states Alejandro Pernas. Milei’s administration contends that the influx of inexpensive imports, notably the entry of Chinese platforms like Shein and Temu, has led to a reduction in prices, ultimately benefiting consumers in a nation where clothing has traditionally been costly. “I have never bought clothes in Argentina in my life because it was a rip-off,” Economy Minister Luis Caputo remarked this month.
Industrialists caution that, in light of competition from inexpensive imports, they will need to implement further staffing reductions in a sector that employs over 500,000 individuals throughout its entire value chain. Since assuming office in December 2023, Milei has implemented a significant fiscal adjustment and eased import restrictions in an effort to combat inflation and reduce prices – a strategy that has, however, resulted in a notable decline in consumption. Pernas has subsequently initiated the importation of certain finished products independently. He expresses a desire to maintain factory jobs; however, he acknowledges that in the context of “indiscriminate opening” and weakened consumption, sustaining them will prove challenging in the long run. “If the market permitted the coexistence of both scenarios – local production and imports – that would be ideal,” he states. “However, at present, Argentina’s market is not exhibiting buoyancy.”
Approximately 1,000 kilometres to the west of Confecciones Seman, located in western Mendoza Province, a retail establishment offers imported second-hand clothing sourced from Asia, the United States, and Europe, priced by weight at 15,000 pesos per kilo. “Clothes are quite costly. “I was looking in the city centre and it was madness,” says Jimena. According to a report, clothing imports experienced a significant increase of 97.3 percent last year, while prices have subsequently declined by 30.6 percent since 2023. A 2024 report by the Fundar think tank indicates that clothing in Argentina is priced 35 percent higher than in the surrounding region, although this trend is inverted for lower-end garments, with significant price variability observed. Fundar indicates that the escalation of costs commenced over twenty years ago, with “growing import barriers” identified as one of the primary factors. Caputo noted that the textile sector has traditionally enjoyed state protection, leading to the situation where Argentines “have been paying two, three, four, 10 times what textiles and footwear cost in the world.” This model exclusively favored the dominant players in the industry, he stated.
The comments made by the minister, along with statements from other officials, have attracted criticism from the industry. In a statement, FITA indicated that the issue stemmed from “fraudulent competition,” contending that domestic production is confronted with “a heavy tax burden, high costs, logistical shortcomings and lack of financing.” Daniel Romani expresses that the staff are experiencing significant distress and anxiety regarding their future prospects. “It’s logical, as they observe a decline in output from 200 garments to 150, then to 120, and now we are producing 100 jackets daily.” A seasoned worker with extensive experience in this region expresses concern. “Where is he going to find work?” Romani inquires. The government’s stance is that sectors lacking competitiveness must undergo transformation. Pernas, however, expresses caution. “My company can reinvent itself – tomorrow it could become an importer. But what is the woman who has been sewing sleeves in my factory for 30 years supposed to reinvent herself as?” he inquires.