WASHINGTON — Trying to protect U.S. textile and apparel jobs while championing free trade may seem like a dichotomy, but that’s just the policy President Bush had adopted.
This story first appeared in the August 13, 2002 issue of WWD. Subscribe Today.
The Bush administration’s captain for navigating the political minefields in the domestic textile industry that two-sided agenda creates is Grant Aldonas, undersecretary for international trade. Finding the right balance to safely walk that path is widely seen as crucial to the GOP’s quest to hold onto its narrow majority in the House after November’s election.
The seemingly disparate strategy: If the Bush administration demonstrates to voters in the South that U.S. trade policies benefit domestic textile mills — not drains the industry of jobs by increasing imports, as is commonly perceived — then GOP lawmakers from textile-producing states, in hot water with constituents over voting with the President on trade, may be spared.
Aldonas rejects such conclusions that the administration is cozying up to the beleaguered U.S. textile industry for short-term political gains, but rather that it’s acting practically.
“You’ve got to find a way to advance their interests, as well” through trade, Aldonas said of domestic textile and apparel factories, which still employ a combined one million workers. “Otherwise, you won’t have support for a more aggressive trade policy.”
The Bush policy on textiles and apparel trade, Aldonas is telling mill executives, is that the U.S. won’t lower its tariffs on textile and apparel imports in the new round of World Trade Organization talks until foreign trading partners lower their higher duties and non-tariff barriers.
“You go visit Sara Lee’s plants in North Carolina,” Aldonas said. “You visit Burlington’s plants. You have folks who have invested an awful lot of capital and under ordinary circumstances they ought to be able to compete on a global basis, even with the differences in wage rates” compared to developing countries.
Aldonas became the administration’s point person for the domestic textile industry in December when he was given the assignment to create an inter-agency, Textile Working Group, to help the sector, along with apparel makers, better compete in this era of globalization. The textile task force was born out of a political necessity, the result of a close call in the House over renewing the President’s trade promotion authority.
Several Southern GOP lawmakers were solidly against the authority, arguing expanded trade agreements would further hurt the import-sensitive textile industry. The measure appeared in danger until Aldonas’ boss, Commerce Secretary Donald Evans, convinced some of his party’s stray dogs to stay at home and vote “yes.” In return, Evans promised he would help flagging mills. The bill passed by one vote.
Evans’ pledges included “aggressively” pursuing foreign countries to lower tariff and other barriers to U.S. textile and apparel exports. Promises were made to help exporters with advice on expanding business abroad, including taking advantage of the 2000 Caribbean Basin and Africa trade bills that drop duties on apparel made from U.S. textiles. Evans also said the administration would step up efforts at Customs to stop the millions of dollars’ worth of goods that are estimated to be transshipped — illegally evading quotas on textile and apparel through false country-of-origin certificates — from entering the U.S.
Since U.S. mills became a Bush administration priority, Aldonas has been shuttling to the Carolinas and other points South to meet with industry executives. The industry response to his message has been mixed.
Jim Chesnutt, president and ceo of National Spinning Co., who last week listened to Aldonas speak at an industry dinner in Raleigh, N.C., said he generally considers Bush officials to be sincere about helping the textile industry, but he has concerns.
Chesnutt said he told Aldonas the industry won’t have a chance to survive unless the administration works closely with the sector in charting its trade agenda. Now that Congress has renewed TPA, allowing the President to more easily strike trade-liberalizing pacts, “my greatest fear…is the legislation will be interpreted in such a way that it still may not be meaningful for us,” Chesnutt said.
Jock Nash, Washington counsel for textile giant Milliken & Co., who also attended the Raleigh dinner, is more pointed. Nash said even if the U.S. is successful in talking tough on textile and apparel at the WTO, benefits of a more level playing field for international trade won’t materialize until several years from now.
By then, U.S. trade pacts planned for the future, in addition to existing apparel-import liberalizing agreements, will have devastated the textile industry.
“They are not doing anything. It’s nothing but rhetoric,” Nash said. “Grant Aldonas is very intelligent, affable. Grant’s purpose is to mollify the textile industry leaders, and Grant’s very good at what he does.”
Although the Commerce Department traditionally has worked to promote domestic textile and apparel interests, Aldonas said the industry has gained more of a “prominence in our thinking” as part of the administration’s push “to rebuild public trust and trust in Congress in trade policy.”
While Aldonas has been engaging in shuttle diplomacy in textile country, importers of textiles and apparel question whether the Bush administration has forgotten its expansionist free-trade tenets on which the President campaigned.
Julia Hughes, vice president of international trade, U.S. Association of Importers of Textiles and Apparel, said Aldonas has snubbed importers.
“He’s made an assessment where the political votes are,” Hughes said. “It would appear his goal is to mollify the textile industry and to try and focus on what the administration can do to meet the demands for the [House] textile caucus. We asked for a meeting when they first created the Textile Working Group, and we still haven’t got a reply.
“We strongly believe the administration is making a mistake to deal separately with the textile industry versus the retailing and importing sector. We are all part of the same industry, and a successful strategy for the future will focus on ways to work together, not separately.”
Aldonas said meetings with retailers and other importers are forthcoming. He said, “We have a long-term interest in advocating the retailers’ interest when going to the negotiating table, as well.”
“The administration hasn’t backed away from wanting to eliminate tariffs worldwide,” Aldonas said. He noted, however: “One of the things we’re going to insist on is that we’re not going to be moving unless other folks move” their trade barriers. “The main thing is to say…‘We’ve got to get as good as we give at the negotiating table,’” said Aldonas, who oversees 2,400 workers at Commerce’s International Trade Administration, which promotes U.S. industry in the international trade arena.
“You really have to have something that’s coming back to our guys,” he said. “People look at textiles and apparel and some of the other things in the United States as if they were bargaining chips to be traded off for other benefits…and I just don’t think that’s the appropriate approach.”
To that end, Aldonas said the U.S. continues to be committed at the WTO to rebuff calls from developing countries to speed up the scheduled 2005 phaseout of U.S., Canada and European Union quota restrictions on textile and apparel imports.
Aldonas, who grew up in blue-collar south Minneapolis, where he went to high school with Minnesota governor Jesse Ventura, is a longtime trade hand in Washington in and out of government. A lifelong Republican, Aldonas, 47, said his negotiating style has been honed more from marriage and raising three children than working in his profession.
“He’s practical, down to earth, no-nonsense,” said Tim Reif, Democratic chief trade counsel on the House Ways and Means Committee, who co-teaches an international trade dispute settlement class with Aldonas at Georgetown University.
Aldonas joined the Bush team after a stint on Capitol Hill, where he was Republican chief international trade counsel for then-Senate Finance Committee chairman Bill Roth (R., Del.). While working in Congress, Aldonas came up against how discontent among lawmakers from textile-producing states can spell defeat for trade legislation. In the case of ensuring Senate passage in 2000 of the apparel-duty dropping Caribbean Basin and Africa legislation, Aldonas successfully advocated the need for strong U.S.-textile-only rules if the measure were to pass.
Aldonas faced similar opposition soon after Sept. 11, when Pakistan was seeking $1.6 billion worth of U.S. textile and apparel quota and tariff concessions for its help in the war against Afghanistan. The administration dispatched Aldonas to help quell an uprising among House GOP textile-state lawmakers who were fearful the textile industry was being used as a bargaining chip for foreign policy purposes.
The U.S. ended up giving Pakistan a portion of its request. However, the trade breaks, amounting to $426 million in apparel quota breaks over three years, made several House lawmakers from textile-producing states unhappy.
“I’m a free-trader,” said Rep. Charlie Norwood of Georgia, one of the GOP House Textile Caucus members unhappy with the Pakistani trade breaks. “I don’t think the administration is into fair trade so much. Grant is very persuasive. He is also very knowledgeable. On a personal basis, I like him a lot, and I would like to be on the same page on this.”
During the launch last fall in Doha, Qatar, of a new round of trade-liberalizing WTO talks, Aldonas again was in the hot seat with some GOP textile-state lawmakers, including Norwood. Developing countries threatened a collapse of the round, so Aldonas, negotiating on behalf of the administration, agreed that U.S. laws used to protect domestic industries against damaging import surges would be discussed in subsequent talks.
Aldonas defended the decision as a means to keep the 144 WTO-member nations engaged in the long-term goal of eliminating global trade barriers. Essentially, Aldonas said, the U.S. had to decide “what was the price” for keeping a new WTO round alive.
“Yeah, we’re willing to talk about this,” Aldonas said. “That’s what it came down to.”