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ATLANTA — The only way for the Americas to compete with Asia is to join together and stop competing with each other.
This story first appeared in the August 21, 2008 issue of WWD. Subscribe Today.
The message of unity over division was hammered home at the second annual Competitiveness Forum of the Americas, sponsored by the U.S. Department of Commerce this week at the Hyatt Regency hotel here. Officials stressed the need to act fast to shore up U.S. trade given rising fuel and labor costs in Asia that are creating opportunities for sourcing close to home.
Convened by Commerce Secretary Carlos M. Gutierrez, and sponsored by the City of Atlanta and the Department of Economic Development of Georgia, the event drew 900 attendees. Among them were three heads of state — Colombian President Alvaro Uribe Velez; President Elias Antonio Saca Gonzalez of El Salvador, and Alvaro Uribe Velez, president of Guatemala, as well as more than 25 senior level officials from 30 countries in Central and South America and the Caribbean. They gathered for speeches, workshops and roundtable discussions on trade, tourism and economic development in the Western Hemisphere.
“We aren’t here to negotiate or sign treaties, but for a unique opportunity to take away ideas that can help tourism and business,” said Gutierrez. “We have to move away from isolationism to a united competitive spirit.”
Latin American government officials said trade agreements and democratization had boosted economic development, but called for more public and private investment and support for future growth.
“The history of [El Salvador] and Central America has been one of conflict, 20 years of wars and trade fights,” said El Salvador President Gonzalez. “We were the last scene of the Cold War. Now we are a country of democracy and commerce, and economic growth has been up every year since 2004.”
At an opening event Sunday night, Gregory Meeks (D., N.Y.) promised bipartisan support for expanding free trade in the Western Hemisphere.
“If Latin American economies don’t thrive, our economies don’t thrive,” he said. “We need a free trade agreement of the Americas.”
In an interview Tuesday, Gutierrez said the number-one priority for apparel-textile trade is for Congress to expand CAFTA cumulation provisions, which kicked in for CAFTA countries and Mexico on Aug. 15, to other countries, especially Colombia and Peru. Cumulation allows raw materials from specified countries to be exported tax-free.
He also said that “we are not pleased” with the current economic picture in the U.S., but predicted improvement and called for perspective.
“We’ve had first-quarter growth of 0.9 percent, second-quarter growth of 1.9 percent. We’ve lost 460,000 jobs this year, and we should be creating 55,000 per month. It will take three to four months to work through the excess inventory in housing. The back half of the year and next year will be stronger, but maybe not the kind of growth we have had,” he said.
In a textile-apparel forum, Department of Commerce officials echoed Gutierrez’s calls for Congress to pass free trade agreements with Colombia and Panama, extend cumulation provisions, update NAFTA, create more free trade zones and eliminate barriers that slow down transportation, including Customs regulations.
David Spooner, assistant secretary for import administration, acknowledged resistance in the U.S. textile industry and a protectionist climate, especially during the election year.
“The U.S. textile industry is obsessed with China, but they need to…integrate the hemisphere as a region to compete with China,” he said.
Jerry Cook, vice president of government and trade relations for Hanesbrands Inc., painted a bleak picture of the current problems for manufacturers sourcing in the Americas. Citing archaic trade rules, Customs bottlenecks, and security regulations that can cause products to take up to 11 days to get into the U.S., and result in penalties and charges from retailers, he called for infrastructure improvements, development of human capital and cooperation and exchange of human resources in the region.
Cook stressed two-way trade with Latin America, especially as Hanes’ sales in China are growing between 15 and 45 percent a year. He also cited the need for textile development in the region, especially of high-performance fabrics for the company’s fast-growing women’s athleticwear divisions.
“We need to focus on global trade, not just north to south or regional,” he said. “We need to acknowledge the elephant in the room. Asia is not killing us, we’re killing ourselves.”