WASHINGTON — The Obama administration revealed details of its export strategy on Thursday, which the textile and apparel industry hopes will help companies struggling to find financing.
This story first appeared in the February 5, 2010 issue of WWD. Subscribe Today.
The administration will improve credit access for domestic companies as part of a goal announced in President Obama’s State of the Union address, step up enforcement of international trade laws and create new export opportunities for U.S. companies, Commerce Secretary Gary Locke said.
Locke said the administration asked the Export-Import Bank to increase financing for small and medium-sized companies in all industries by $2 billion to $6 billion over the next year. The administration’s budget, submitted to Congress on Monday, also requested additional funding for the Commerce Department’s International Trade Administration to help with export promotion. The budget requested a 20 percent budget increase for ITA to $534.3 million.
Textile and apparel firms have faced a long-term credit crisis that intensified as the global economy faltered and consumer demand fell. The sector’s exports from the U.S. declined 17.8 percent to $12.5 billion in the first 11 months of 2009, according to the Commerce Department’s Office of Textiles & Apparel.
The U.S. imports substantially more textiles and apparel than it exports. Textile and apparel imports totaled $74.6 billion in the first 11 months of last year, according to Commerce Department statistics.
“Access to financing is extremely important, particularly over the last year where capital has gotten tighter,” said Nate Herman, senior director of international trade for the American Apparel & Footwear Association.
Historically, it has been difficult for fabric and clothing companies to get financing through traditional avenues such as the Small Business Administration and the Export-Import Bank, he said. It is unclear if more specific action, such as legislation, will be necessary to fully open up access for the industry, the AAFA said.
The industry has been working to open additional financing avenues. Gail Strickler, assistant U.S. Trade Representative for the Office of Textiles, has led some industry efforts that were started in late fall to explore expanded financing options with the Export-Import Bank.