Byline: Jim Ostroff

WASHINGTON--Textile and apparel imports rose 5.2 percent in June compared with a year ago, with the U.S.'s North American Free Trade Agreement partners--Mexico and Canada--continuing to post the most robust growth of all foreign suppliers, the Commerce Department reported Thursday.
Mexico's textile and apparel exports to the U.S. rose 22.2 percent in June, and Canada's were up 19.6 percent.
Meanwhile, growth rates in total decelerated. Nevertheless, June's overall import level of 1.54 billion square meters equivalent eclipsed the one-month import record of 1.51 billion SME set in August 1993.
For the first half of this year, total imports were 8.15 billion SME, up 8 percent from the same period a year ago. For the year that ended in June, these imports rose 9.3 percent to 16.4 billion SME.
Apparel imports, which soared 16.2 percent in May, rose just 3.2 percent in June to 727.8 million SME. For the year to date, these imports rose 8 percent to 3.82 billion SME and they were up 7.9 percent for the 12 months ending in June, to 7.83 billion SME.
The rate of growth for textile imports also slowed a bit, from 10.7 percent posted in May to a 7 percent gain in June, when shipments reached 809.2 million SME. In the first six months of 1994, textile imports rose 8 percent to 4.33 billion SME and were up 10.6 percent to 8.62 billion SME for the year ended in June.
Data compiled by the Commerce Dept.'s Office of Textiles and Apparel for the first six months of this year, compared with the like 1993 data, indicate Mexico and Canada appear to be benefiting from NAFTA. In June, the combined imports from Mexico and Canada--197 million SME--trailed behind the 217 million SME shipped from China, the number one foreign supplier of textile and apparel to the U.S. However, for the six months, the combined imports of Mexico and Canada totaled nearly 1.07 billion SME, moving ahead of China's 1.02 billion SME.
Moreover, Chinese imports fell 0.28 percent during the first six months of this year, while those from Canada--now the U.S.'s second-largest supplier--soared 26.5 percent to 658 million SME. Mexico, the number six supplier, saw its textile and apparel exports to the U.S. jump 19.5 percent to 409 million SME.
Ross Arnold, an OTEXA international trade analyst, noted China's small export falloff was due to a 22.3 percent decline, to 159.1 million SMEs, in its shipments of cotton apparel to the U.S. About 56 percent of this decline was due to a precipitous drop in the export of men's and boys' and women's and girl's cotton trousers, category 347/348 to the U.S.--down 71 percent to just under 10.5 million SME.
By comparison, Mexico's apparel shipments to the U.S. surged 39 percent to 205.9 million SME in the first half. It may be too early to say how much of Mexico's growth is being spurred by NAFTA. However, Mexico's combined textile and apparel shipments to the U.S. were up about 25.6 percent for the first half of 1993 versus a year earlier, due mainly to an increase in exports under the established 807 programs. Even before the advent of NAFTA, the 807 programs gave tariff breaks to apparel assembled in Mexico from fabric cut in the U.S., and 807 exports had been growing at an average 20 to 25 percent rate annually since about 1990.
Most of the export increase by Mexico during the first half of 1994 compared with a year earlier was concentrated in four apparel categories: 638, men's and boys' man-made fiber knit shirts, soaring a phenomenal 1,695 percent to 11.9 million SME; 639, women's and girls' man-made fiber knit shirts, up 195 percent to 13.9 million SME; 652, man-made fiber underwear, up 79 percent to 20.2 million SME, and 636, women's and girls' man-made fiber dresses, up 242 percent to 8.6 million SME.
Strongly contributing to Canada's six-month increase was a 27 percent rise to 612.5 million SME in the export of textiles. Canadian textiles outstrip its apparel imports to the U.S. by far. Pacesetters included category 223, nonwoven cotton and man-made fiber fabric blends, up 38 percent to 93 million SME, and category 229, specialty fabrics, up 41.5 percent to 166.7 million SME.
Meanwhile, imports from Hong Kong, which had fallen for most of the early part of this year, rose 10.8 percent to 445 million SME, for the first half of 1994. Hong Kong is the U.S.'s number four supplier of imported textiles and apparel. Most of its increases were in two categories: 359, cotton body suits and shirts, up 52 percent to 33.6 million SME, and 352, cotton underwear, up 30 percent to 31.7 million SME.
William J. Armfield 4th, American Textile Manufacturers Institute president, used the June statistics to support the industry's call for a change in the rule of origin so that apparel assembly, not cutting, designates the country of origin for quota purposes.
"In 1994 we see that Hong Kong, after six years of little or no import growth, is showing a 14 percent increase in apparel imports for the first six months of the year, while Chinese apparel imports are down almost 1 percent," said Armfield, who also is vice chairman, Unifi Inc., Greensboro, N.C. "It seems clear that China is using loopholes in recent customs department rulings to circumvent its quotas by having goods 'cut' in Hong Kong and claimed against Hong Kong's quotas in spite of the fact that the apparel items are being sewn in China."
Retailers and importers are strongly contesting the proposed change, which the domestic industry seeks to have attached to the GATT Uruguay Round implementing legislation now being mapped out in Congress. They say such a change would upset sourcing patterns and sharply hike the costs of imported apparel.
--Fairchild News Service

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