VF Corp plans to close three factories in Costa Rica by July 16 and dismiss about 400 workers there, according to published reports. The announcement comes as Costa Rica faces rising competition from nearby countries such as Guatemala and Nicaragua, whose sales to the U.S. have risen under the Central American Free Trade Agreement (CAFTA).
In 2002, Costa Rica exported $811 million worth of textiles to the U.S. Last year, that number fell nearly 50% to $429 million. Costa Rica was expected to ratify CAFTA in February but failed. However, the country has received a seven-month extension to join the treaty this autumn, according to various reports.
