By Karl
Spilhaus
BOSTON --
2006 opened with the reimposition of quotas on certain textile and apparel
articles from China under the terms of the bilateral agreement announced at the
2005 NTA Annual Meeting. The early part of the year also saw the beginning of
"rolling implementation" of the U.S.-Central America Free Trade
Agreement. Both events had been touted by many in the Administration and
Congress as potential benefits for the textile and apparel industries in our
hemisphere. Both disappointed. Total U.S. textile and apparel imports in 2006
(year-to-date November) were up just three percent over the prior year. That
was an increase of $1.3 billion to bring total imports to $48.3 billion. But a
country-by-country look at the data shows a disturbing trend. Imports from
China, even with the new quotas in place, were up $1.5 billion. Together
Pakistan, India, Korea, Indonesia, Bangladesh, and Vietnam were up 1.4 billion.
At the same time, our NAFTA partners dropped by nearly $1 billion and our CAFTA
partners dropped by about $400 million.
The
massive shift of sourcing from Western Hemisphere to South and East Asian
suppliers had a deleterious effect on the domestic U.S. textile industry. In
2006 the textile mill and textile products mill employment dropped by 30
thousand to 352 thousand. Since 2001 total employment is down by 230 thousand,
a drop of 40%.
In 2007,
we believe, international trade policy and regulation will continue to be among
the most powerful forces affecting our industry. CAFTA has yet to be
implemented with all the signatory countries. And for all the CAFTA region
there remain questions regarding the implementation of many of the agreement's
provisions and later side agreements, such as those relating to pocketing,
cumulation, and the TPLs for Nicaragua and Costa Rica. Additionally, over the
coming months we may see free trade put into effect with such countries as
Oman, Peru, Colombia, South Korea, and Panama.
Vietnam
entered the WTO as the 150th member on January 11, 2007 and, as of that date,
U.S. quotas on textiles and apparel from that non-market economy are abolished.
However, under the terms of the May 31, 2006, U.S.-Vietnam bilateral market
access agreement the U.S. may reimpose textile and apparel quotas if Vietnam
fails to fulfill its WTO obligations. Furthermore, in a September 28, 2006
letter, the Bush Administration assured Senator Elizabeth Dole [R-NC] and
Senator Lindsey Graham [R-SC] that the Administration would systematically
monitor and review U.S. imports of textile and apparel goods from Vietnam and
conclude a review every six months as to whether there is sufficient evidence
to initiate an antidumping investigation of any textile or apparel goods from
Vietnam. NTA will be monitoring trade with Vietnam closely. Immediately upon
the U.S. granting, December 10, 2001, normal trade relations to Vietnam,
shipments of apparel articles to the U.S. surged. Quotas, which were first
imposed on May 12, 2003, under the U.S.-Vietnam Bilateral Textile Agreement,
did little to stanch the rising flood of imports, so that by 2006, Vietnam had
grown to be the fourth largest, in dollar value, shipper of apparel articles to
the U.S. For the year-to-date November 2006, U.S. imports of textile and
apparel articles of Vietnamese origin totaled $3.2 billion, of which $3 billion
was apparel.
We are
also very concerned about the implementation of the Haitian Hemispheric
Opportunity through Partnership Encouragement Act of 2006. This Act amends the Caribbean Basin Economic
Recovery Act (CBERA) by creating special rules for Haiti. The special rules
will be in effect for five years beginning on the date of enactment. In
addition to other CBERA benefits (such as CBTPA), apparel imported in the U.S.
from Haiti will be duty-free, subject to certain limitations. The duty-free
treatment applies to apparel assembled (or knit-to-shape) in Haiti. A certain
percentage of the cost of materials or processing operations must originate in
Haiti or one of several other countries.
In this
uncertain market for consumer textiles our industry has increasingly looked to
U.S. Department of Defense procurement as an important market for domestically
produced textiles. However, the demands on DoD have been enormous with multiple
conflicts underway and our NTA 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.
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.
Government
regulatory affairs continues to be an important area of activity for NTA.
The
Textile Bedding Committee has been very busy addressing the California Bureau
of Home Furnishings' draft bedding flammability rulemaking.
Our
Upholstery Fabrics Committee has an aggressive agenda for 2007 which includes
flammability standards, intellectual property rights, and evolving standards
for sustainable textiles.
Promotion
of U.S.-made textiles is an important role of the Association. In 2006 we
participated in trade shows directed toward technical textiles, apparel
fabrics, and textile machinery. NTA has been a sponsoring organization for such
shows as Material World and MEGATEX. For 2007 we are expanding our sponsorship
program to include the Outdoor Retailers Show.
Also under
the NTA roof is the Cashmere and Camel Hair Manufacturers Institute
representing leading international producers of luxury animal hair and fine
wool products. Among CCMI
accomplishments in 2006 was passage of the Wool Suit Fabric Labeling Fairness
and International Standards Conforming Act, which amends the Wool Products
Labeling Act of 1939 by adding definitions of fine and superfine wool and of
cashmere. CCMI added a new council of superfine wool manufacturers in 2006 and
increased its membership with the addition of 19 members in that group.
As we face
rapidly changing international trade regulations, new government and industry
standards for our products, and the challenges of promoting U.S.-made textile
products, banding together in an association makes more sense than ever. With
that in mind we are preparing a strong program for our 153rd Annual Meeting to
be held October 21-23, 2007, at the Grandover Resort Greensboro, North
Carolina. Mark your calendars and plan to attend!