Questions
for: James F. Robbins, NTA chairman and president & CEO of Elastic Fabrics
of America, Greensboro, NC
From: Devin Steele,
editor, Southern Textile News, Charlotte, NC
Sept. 24, 2007
In advance of NTA’s
Annual Meeting
Deadline for
responses: Monday, October 8
STN. Let’s start with your 153rd annual meeting in Greensboro, NC, in your company’s backyard. Though the association has held functions at North Carolina resorts before, it has never met in the state’s textile manufacturing belt — at least not since the 1940s, according to NTA records. How do you expect this locale to affect attendance?
JR. This year’s NTA Annual Meeting in the heart of textile country is a change in practice—with recent years’ meetings being held in “get-away-from-it-all” resorts far from most of our mills. Let’s face it, the reality of today’s industry dictates that we find practical locations for easy inexpensive access to our members. A local venue, with correspondingly lower travel costs and time spent getting to and from the event has already paid off in the strong pre-registration attendance numbers.
STN. Your speakers’ roster for the meeting — under the theme “U.S. Trade Policy: There Is Hope” — includes a number of heavy hitters in business and the textile/apparel industry. Please address the value you expect members to gain by their attendance.
JR. With a Republican in the White House and a Republican majority
in congress, U.S. free trade was extended to an additional eleven nations. But
since the Democrats gained control of both houses of congress, no new free
trade agreement has been approved. Meanwhile, we have seen the Bush
Administration itself deviate from its free trade ideology. Significant policy
shifts included:
--Reimposition (through 2008)
of quotas on Chinese textile products;
--Imposition of Vietnam
textile import monitoring program; and
--Application of
countervailing duty on China (reversing over 20 years’ policy).
Recent press accounts suggest that Republican voters, by a decisive majority, question the free trade orthodoxy. And we have seen respected “mainstream” economists, such as Alan S. Blinder of Princeton and former Federal Reserve Board vice chairman rethink their pavlovian response to free trade, recognizing that the disruption to the U.S. economy may be greater than the academic model predicted.
These signs of change in Washington and among economists offer some reason for optimism and prompted the theme of the 153rd NTA Annual Meeting
So, what will the future hold for U.S. trade policy? Our speakers
will offer some insights and guidance for American companies making strategic
decisions about their future in North America.
STN. More specifically, please speak to some of the association’s accomplishments and issues with which it continues to be involved.
JR. Of particular note
over the past year has been the continued growth, both in size and influence of
the NTA Government Textiles Committee. The growing prestige of this group as
the only organized representative to the U.S military on behalf of the domestic
U.S. textile industry is demonstrated by the breadth of attendance at this
meeting by representatives of military and government agencies such as:
Defense
Logistics Agency
Federal
Prison Industries
National Industries
for the Blind
PEO
-Soldier
U.S.
Air Force
U.S.
Army Natick Soldier Center
U.S.
Army Soldier Systems Center
U.S.
Trade Representative Office
The keynote presentation
will be given by Major General Arthur Morrill, vice director of the Defense Logistics
Agency (DLA). DLA purchases approximately $2 billion of clothing and textile
items annually. General Morrill has shown a clear understanding of the clothing
and textile procurement problems and is in a key position to address issues
that have posed problems for the textile industry for years.
During the program,
NTA’s Government Textiles Committee Chairman Dan Pezold, Duro Textiles, will
provide an update on the textile and apparel coalition’s 2-year program seeking
improvements in the way DSCP does business. He will report on the success to
date and review the approach that will continue.
Brian A. Schooley,
Major, USAF, Program Manager, Military Clothing will describe their clothing
and textile procurement system of the Army and Air Force Exchange Service and their approach to providing US-made
items.
STN. Also, can you go over some of the trade-related matters the association is working on?
JR. International trade
is very important to our industry. Most people don’t fully understand how
radically the rules have changed. This month marks the 20th anniversary of the
U.S.-Canada Free Trade Agreement. At the time, abolishing tariffs and other
barriers with a trading partner was considered a big, almost unprecedented
step, now we have FTAs with 16 nations and there are several more in the works.
And each of these agreements has its own distinct set of rules. Just keeping
track of and complying with the regulations is a major task. That’s one of the
benefits of a trade association. NTA’s professional staff studies and reports
on trade regulations so my company staff can concentrate of making fabrics,
and, we hope, making money.
For many America fabric
makers understanding the changing rules for CAFTA-DR is vital to success. The
Administration sold CAFTA-DR as a win-win for U.S. and regional producers, but
in many ways it has yet to deliver on the promises. With the agreement’s
approval a few days ago by the voters of Costa Rica, we are at least nearing
the end of the confused period of “rolling implementation.” However, pocketing,
treatment of socks, and cumulation with Mexico and Canada, each present
unresolved questions as regards the details of implementation. And just about
everyone agrees that the CAFTA-DR short supply procedures have not worked out
as was expected. Recently NTA participated in a Department of Commerce forum to
address some of the problems with short supply.
The Doha Round of WTO
talks threatens to result in further erosion of our protection, but equally
holds out the possibly of meaningful market access for our goods in other
markets. Which way this round will go, or if it will go at all, is very
uncertain and NTA will be watching closely over the next several weeks which
experts predict will determine whether a new agreement can be reach or not.
STN. Please update us on some of the crucial issues being addressed by NTA’s committees.
JR. Our Upholstery Fabrics Committee remains busy addressing the upholstered furniture flammability standard under consideration by the U.S. Consumer Product Safety Commission (CPSC).
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.
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.
Recently three upholstered furniture manufacturers in Mississippi filed applications for foreign trade zones in which to import upholstery fabrics duty-free. Historically textiles have been excluded from FTZs and NTA will be vigorously opposing these applications.
STN. Promotion of U.S.-made textiles is an important role of the association, NTA President Karl Spilhaus wrote in these pages early this year. As such, what activities have NTA engaged in related to the advancement of domestic goods?
JR. The National Textile Association CAFTA-DR Seminar at MEGATEX,
November 1, 2006, Atlanta, Georgia, entitled, CAFTA: It's Central to the
American Textile Industry, was very well received. The program
was followed by joint NTA-ATMA reception for the promotion of our member
companies. In
May NTA was at the Material World show in Miami Beach.
NTA’s Hardy Poole spoke at the 46th annual Dornbirn Man-Made Fibers Congress in Dornbirn, Austria. The presentation addressed technical textiles and the need for unique imagination and state-of-the-art research facilities to develop new products, and the need for protective systems to discourage counterfeit and knock-off pirates from stealing new products. Mr. Poole also addressed the Association of Contract Textiles in October 2006 on the global textile environment, especially as it relates to upholstery fabrics and the American Flock Association, also in October, on sustainable textiles.
STN. The Cashmere and Camel Hair Manufacturers (CCMI), under NTA’s umbrella, of course, has scored a number of “victories” in recent years related to mislabeling and standards. Have there been any significant achievements resulting from CCMI’s work during the past year?
JR. Indeed, CCMI efforts
have paid off in major ways. Recently the authorities confiscated a million
mislabeled “cashmere” scarves in Florence, Italy. In that instance the Italy
police sought out the expertise of CCMI in establishing the fraud. Earlier this
year CCMI activities in the Japanese market resulted in large recalls of
mislabeled cashmere products. The recalls affected more than 800,000 garments
--sweaters and mufflers. The mislabeled garments, which had been manufactured
in the Peoples Republic of China, were imported into Japan by various companies. The recall was widely publicized in the
Japanese press. The group has built strong awareness in China of our insistence
on quality and integrity of cashmere products.
This year CCMI introduced a
comprehensive monitoring program in Korea in the market for fine wool apparel,
the “Super 100s” and so forth. Armed with the new U.S. law defining the “Super
X” and “X” numbers, CCMI’s Superfine Wool Council has brought to that industry
sector the same expertise and watchdog function that CCMI has long applied to
the market for cashmere products.
STN. The industry has encountered another tumultuous 12 months. How has NTA membership fared through this period?
JR. I am pleased to
report that we have picked up a new member from the knitted textile industry,
Alandale Knitting Co., Inc., as well as a few supplier companies as associates
of NTA. Nevertheless, the continued shrinking of our industry has affected NTA.
STN. Are there any other issues I failed to bring up?
JR. At our March 8, 2007, Board meeting in New York City NTA
endorsed the Border Tax Equity Act written by Representative Bill Pascrell from
New Jersey and Representative Mike Michaud from Maine. This bill is aimed at
eliminating a $201 billion subsidy for foreign manufacturers who export to the
U.S. and a $93 billion penalty tax on companies that export U.S. products
abroad. The inequity results
from the international trade rules put in place by the World Trade Organization
(WTO). The WTO rules permit the 137 nations that employ an indirect tax, such
as the VAT, to rebate those taxes on exports, while also levying them on
imports. The U.S. uses a direct tax system --taxes on income or on owning
property. Under the WTO rules, no portion of these taxes may be rebated. And
the U.S. does not impose on imports a fee equivalent to these direct taxes.
Due to the VAT disadvantage, American companies have
realized little benefit from foreign market openings promised in the many
rounds of trade talks. Take, for example, Europe (the EU 25). IN 1968 the
average tariff rate for U.S. products exported to Europe was 10.4%; in 2006 the
average rate was 4.4% --on the face a significant reduction which should have
made it easier to export to Europe. But when we add the VAT to get the true
total tax burden on imports, the picture looks quite different. In 1968 the
total of duty plus VAT on U.S. exports to Europe was 23.84% (10.4% duty plus
13.44% VAT); in 2006 the total was 23.76%. In other words, the reduction in
tariff was matched with an equal and offsetting rise in the VAT (to 19.36%).
Over the same period U.S. tariffs on goods from Europe were slashed by at least
a third.
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