Editor’s note: Following is a Q & A with Jonathan Stevens, chairman of the National Textile Association (NTA), which will hold its 152nd Annual Meeting Sept. 17- 19 at The Hotel Viking in Newport, RI. Stevens, president of Ames Textile Corp./ Game Time Fabrics, answered questions sent to him by Devin Steele, STN editor.
STN: Your two- year chairmanship will expire at NTA’s Annual Meeting. Please comment on the importance of serving the association and the industry in this capacity.
Stevens: The best job in the organization is being chairman in that I have been able to stay close to the membership and have worked with an excellent staff on being aware and helping to move on important issues facing the industry.
STN: Under the theme, “ Keeping Your Balance as the World Turns Faster,” NTA has another strong program on tap for its 152nd Annual Meeting. What’s in store for your membership and what do you anticipate being some of the key take- aways?
Stevens: We’re going to hear from some of the top experts in the industry on how they are aggressively meeting the challenges of today.
Mui Erkun, the chief of staff to the U. S. Department of Homeland Security’s Chief Procurement Officer, will address the NTA membership on our government’s newest department, which has an annual budget of $ 40 billion.
In fiscal year 2005, DHS had procurements of over $ 17 billion to support several agencies, including Border and Transportation Security, Emergency Preparedness and Response and U. S. Citizenship and Immigration Services.
Our “ A Sector by Sector Analysis: How the U. S. Textile Industry Will Adapt,” which I will moderate, will feature panelists expert in such topics as:
Leaders from every business and geographic sector of the U. S. textile industry attend this event every year. This year’s registrants include senior executives from upholstery fabrics, technical textiles, textile finishing, wool textiles, knitted textiles, narrow elastic fabrics, textile machinery, textile consulting, financial services, education, military and government.
STN: As all groups associated with the industry, the NTA enjoyed a number of highs and lows in recent years. Based on the organization’s hard work and results during your tenure, how do you feel about the last couple of years and the association going forward as you prepare to turn over the leadership reins?
Stevens: The fact that we’ve been able to gain new members in this period of industry consolidation is a definite high. We have attracted new members by offering an organization that is vital to competing in their new global environment. They see the value of the organization when they learn about the services we provide to assist with the “ meat and potatoes “ of doing business.
The low has to be that in many instances our positions did not make it into the trade legislation that will affect how U. S. companies have to compete in the global market.
STN: How did the NTA’s recruitment efforts go over the past year?
Stevens: Since the November 2005 Annual Meeting in Florida, we gained several new members from among fabric making companies and the companies that supply them with fiber and yarn, including:
We also picked up a new associate member, Greenberg Traurig.
STN: In general, how would you describe the mood of your membership as you look ahead and why?
Stevens: The mood of membership is cautiously optimistic.
All are looking for those strategies that will get us to not be part of the general trend toward consolidation — some of us have found those strategies and are finding out ways to implement them. In fact we’re going to be talking about more of those strategies at our Annual Meeting in Newport as part of our ongoing commitment as an organization to see that our companies do well.
STN: The Cashmere and Camel Hair Manufacturers Institute ( CCMI), under the auspices of the NTA, added fine and superfine wool to its watch list this year. What are your latest CCMI membership numbers and have there been in any recent successes related to its mission of protecting the image of luxury fibers?
Stevens: The Cashmere and Camel Hair Manufacturers Institute is an international organization of leading processors of luxury fibers, founded in 1985 with the mission of maintaining the integrity of cashmere and camel hair products through education, information and industry cooperation. With the formation of the Superfine Wool Council (SWC) CCMI added to its historical mission the role of protecting the image, as well as assuring the correct labeling and classification of luxury goods of fine and superfine wools. The SWC was formed in February with 13 companies.
The SWF has grown to include 17 companies. The cashmere group now has 15 members, including many of the leading processors of luxury fiber in Italy, Japan, the United Kingdom and the United States.
Our high-profile CCMI enforcement actions in 2006 have included a major seizure, by Italian customs officials, of garments fraudulently labeled as 100 percent cashmere, and the well- publicized department store recall of mislabeled coats in Germany.
Here in America, we are monitoring the marketplace for garments fraudulently labeled as superfine wool — the “ Super 100s,” “ Super 120s” and other so-called “ super” grades. The Wool Products Labeling Act, which regulates the labeling of wool products in the United States, has not been amended to reflect the current marketing practice of using “ supers” as an identifier of quality wool products. In order to protect consumers and industry participants from mislabeled goods, this bill, H. R. 4583, amends the Wool Products Labeling Act to include the internationally recognized definition of “ supers” promulgated by the International Wool Textile Organisation (IWTO) in it’s Fabric Labeling Code of Practice.
STN: The NTA, along with other industry trade groups, obviously has its hands full on the international trade front. What would you count as accomplishments during your term as chairman?
Stevens: First off, I must mention the U. S.-China bilateral textile agreement that controls, through 2008, imports of Chinese-origin textile and apparel products in most of the most sensitive categories. The agreement was first publicly announced by Deputy Assistant Secretary of Commerce Jim Leonard, at the 2005 NTA Annual Meeting.
All through 2005, leading up to the November announcement, NTA devoted an incredible amount of time to the China issue. And it paid off. Of course we did not do it alone. It was a coalition of all industry groups that pooled resources and talents to make a strong case that drove our government to the inescapable conclusion that a broad, comprehensive and meaningful agreement was absolutely essential for our industry’s successful transition to a quota-free environment.
STN: How else is the association helping members adapt to the ever-changing global trade environment as well as economic challenges in general?
Stevens: You certainly are right about “ ever-changing trade environment.” As recently as 2003, just a year before I was elected NTA chairman, the U. S. was a party to three free trade agreements. Now we have free trade with 13 countries and agreements have already been negotiated, but are not yet in effect, with another five.
If the Bush Administration obtains FTAs with all the countries currently slated for negotiations, the U. S. could, by 2008, have FTAs with 29 countries. And each of these agreements has its own set of rules and exception.
It is a paradox, but free trade is not simpler than protectionism. In fact, as the number of agreements and the volume of regulations multiply, one of the things that NTA provides members is detailed analysis, on the members-only section of our website of each of the many highly complex trade agreements. Access to professional staff to assist member companies in understanding and complying with trade regulations is one of the benefits NTA offers its members.
STN: Related to the DRCAFTA, are some of your members beginning to find opportunities in the region?
Stevens: Unfortunately, CAFTA-DR has yet to live up to its promise. We are greatly disappointed that the ongoing problems of implementation have severely hampered our members’ ability to take advantage of those positive provisions of CAFTA-DR which will be helpful to U. S. textile makers.
Two of the major players — Dominican Republic and Costa Rica — aren’t even part of the agreement as implemented now. And the fixes the administration promised in return for certain textile state votes have not been implemented and may be week or months off.
This is sad, because NTA members were doing business in the region under the CBTPA and the old Special Access program. Once the many implementation issues are finally worked out I’m sure we’ll see more use of CAFTA-DR.
STN: What legislative or regulatory issues not mentioned are NTA currently involved in?
Stevens: Let’s start with textile parts of furniture. Cut pieces of fabric for use as furniture upholstery are classified as furniture parts under headings 9401 or 9403 of the Harmonized Tariff Schedule of the U. S. They are duty-free, in contrast to the duty on fabric in roll form, which range from 7 to 17 percent depending on fabric type.
This duty circumvention is severely damaging to U. S. upholstery fabric manufacturers. In 2005 the U. S. imported $ 1.2 billion in textile parts for chairs and other furniture, of which $ 811 million were of Mexican origin (for automobile seats) and $ 336 million were of Chinese origin (for home furnishings).
While it is not possible to calculate precisely the loss in tariff revenue to the U. S. treasury due to this duty circumvention, it is undoubtedly several tens of millions of dollars annually.
The tariff schedule does not define what operations must be performed on fabric to transform it into furniture parts. Currently U. S. Customs and Border Protection classifies fabric as a furniture part even if it has undergone the very minimal further processing of cutting. We believe that the mere cutting of fabric should not be considered transforming operation for classification in HTSUS headings 9401 and 9403.
Senator Lincoln Chafee filed, on behalf of the upholstery fabrics industry in the U. S. to file a bill, S. 3240, to establish a reasonable definition of textile furniture parts based on substantial transformation. The National Textile Association endorses this effort.
Meanwhile, the Orphan Works Act, introduced in the U. S. House of Representatives by Congressman Lamar Smith ( R- TX) could have an enormous impact on our industry and would pose a serious threat to the Copyright Act by limiting remedies available in the event of an infringement.
On July 20, 2006 NTA, joined by the Decorative Fabrics Association and the American Manufacturing Trade Action Coalition, wrote a letter to the House Committee on the Judiciary opposing H. R. 5439.
STN: Please provide an accounting of NTA committees and their activities.
Stevens: This past year has been extremely busy for several of our committees.
Regulatory proceedings at the state and federal levels have been progressing and the Department of Defense (DoD) activities have been moving rapidly because of the wars in Iraq and Afghanistan, and the war on terror. Here’s an update by committee:
The Upholstery Fabrics Committee remains busy addressing the upholstered furniture flammability standard under consideration by the U. S. Consumer Product Safety Commission (CPSC). The commission has released several proposed draft standards but, at this point, various industry stakeholders (polyurethane foam, furniture, etc.) and other stakeholders in the proceeding (National Association of State Fire Marshals, etc.) have objected to portions of each.
NTA recently met with key commission staff seeking a common position that can be endorsed by all groups. Discussions were positive but other stakeholders must determine their position on the issue before progress is possible.
The committee is also working in opposition to the Orphan Works Act, legislation introduced in the U. S. House of Representatives that would dilute the current copyright laws and greatly reduce copyright protection of art work which is critical to the upholstery fabrics industry.
NTA is working with other associations and companies with common objections and, at this point, the legislation has not been considered by the House Judiciary Committee, though it was approved by the Judiciary Subcommittee on Intellectual Property.
The committee will follow this legislation closely through this session and, if it is not considered then, will track it closely if it is introduced again in the next Congressional session.
A voluntary standard on sustainable upholstery fabrics is also in the development stages under the guidance of the Association for Contract Textiles.
The committee is following the development of this voluntary standard and is anxious to learn more about its requirements.
The Textile Bedding Committee has also been very busy addressing the California Bureau of Home Furnishings’ draft bedding flammability rulemaking. The California standard is addressing filled bedding products such as comforters, mattress pads and pillows. NTA’s Textile Bedding Committee has worked closely with the state officials to develop a reasonable standard that would evaluate the flammability characteristics of bedding products fairly.
Now the committee is assisting with the state’s precision and bias study which is expected to be completed in 2007. At that time, we expect a mandatory standard to be proposed and the regulatory process will move forward. Over the next year, the committee will continue to work with California staff to be sure all factors are considered as the methods are determined. The CPSC is also following the California activity closely since bedding flammability is also on that agency’s agenda.
The demands on Dept. of Defense have been enormous with multiple conflicts under way and our Government Textiles Committee has been very busy trying to improve the procurement process affecting the way clothing and textiles are bought so we can provide the best support possible for our soldiers, sailors, airmen and Marines.
Evolving procurement practices have been creating an untenable situation for our industry and our government Textiles Committee, which serves as the spokesman for industry-wide military issues, has been very active. Since the rapid military build-up to support the wars, textile industry problems have become much more critical.
They include the fact that new contracts are few and far between, incoming delivery orders on existing contracts are sporadic and unpredictable, frequent start/stop orders are being issued, and minimum/ maximum ranges are unworkable for manufacturing.
Working with other clothing and textile associations, NTA has met with Senior Executive Service (senior civilian staff ) representatives at the Defense Logistics Agency and at the Army G4 (logistics) staff which includes the Program Executive Office for the Soldier (PEO — Soldier) to alert senior officials on the way current procurement practices are impacting the industrial base. Work continues and the committee is pushing forward with additional sessions scheduled with key military and civilian officials who manage the procurement process. Political options are also currently being discussed.
STN: As a supporting organization for MEGATEX, please speak to the importance of the trade show for this industry and involvement by your membership.
Stevens: We think it’s a good idea to be there with the all the other associations — so many organizations in one place and the opportunity to see the latest in technological innovation should be a great draw for textile people from all over the globe.
With that in mind, we are preparing an NTA seminar at MEGATEX, to be presented with the support of the American Textile Machinery Association. Our expected audience will include U. S. yarn and fabric makers as well as representatives of the entire U. S. textile industry supply chain. The topic will be “ CAFTA: It’s Central to the American Textile Industry.”
The CAFTA- DR agreement is extremely complex; by far the most complex of the free trade agreements the U. S. is partner to and much more complex by far than NAFTA. There are hundreds of pages of legal text. And even with that there are yet unanswered questions due to uncertainty as to how some parts of the agreement will be implemented Our panelists look at not only the rules of CAFTA- DR but will also explore how to identify business partners in the region and the industry sectors where Western Hemisphere suppliers may be expected to compete with Chinese and other Asian suppliers, such as:
STN: The NTA and the American Textile Machinery Association (ATMA) forged a groundbreaking cooperation that result in discounted membership dues in both organizations. Can you provide any update on that partnership?
Stevens: The discounted membership incentive and our cooperative efforts at MEGATEX are part of our broader goal of working more closely with ATMA, and with other organizations. After MEGATEX, with our joint seminar and cocktail reception we’ll be in a better place to access the success of this groundbreaking initiative.
STN: Is the organization involved in any other partnerships, joint ventures or sponsorships?
Stevens: As mentioned above, we have worked with the Decorative Fabrics Association and the American Manufacturing Trade Action Coalition to oppose the Orphan Works Act. Our proposal to add a table of fiber fineness to the Wool Products Labeling Act has been pursued in close consultation with the International Wool Textile Organisation.
As the need arises, NTA, the National Council of Textile Organizations and others in the industry project a common voice in Washington through the American Textile Alliance.
STN: What other key matters coming down the pike will NTA be involved with in the coming months?
Stevens: The implementation of CAFTA- DR and other trade agreements will continue to be important to our membership. NTA will monitor, and as appropriate, comment on these. Of course we will continue to support and seek enhancements to the Berry Amendment, which is so essential to America’s defense preparedness.
STN: What else exciting or newsworthy is going on in the organization?
Stevens: There is good news in the textile industry. Our member companies continue to focus on producing high quality, innovative products and in so doing provide employment that supports families and provides the income to pay the taxes that keep our communities running.
STN: Please address the relationship and leadership abilities of your successor, James Robbins.
Stevens: I think Jim will do a great job. He has been running a large organization and is well acquainted with the issues of the day. His involvement with NTA goes back about 20 years and he has held leadership positions in the association since 1990. He is well respected by the members.
And he is very attentive to the goals and aspirations of the membership and of the organization.