PACIFIC RIM TRADE ZONE PROPOSAL DRAWS LACKLUSTER RESPONSE

Byline: Jim Ostroff

WASHINGTON--The news that President Clinton next month will propose the Pacific Rim nations join with the U.S. in working to create a free trade zone generally got an unenthusiastic reception Thursday from both importer as well as apparel manufacturing interests.
White House officials said the proposal would aim at setting up this free trade allegiance with the Far East soon after the turn of the century. They couldn't say which segments of trade might be targeted in such a move.
Spokesmen for domestic textile and apparel manufacturers, as well as those representing importers, reacted by stating that the concept was either premature or could have little beneficial impact on textile and apparel imports.
Clinton is slated to urge members of the Asia-Pacific Economic Cooperation (APEC) group to set a date early in the next century to commence a free trade pact similar in concept to the North American Free Trade Agreement, White House trade officials said.
The President is to make this proposal in person during APEC's second annual meeting to be held in Jakarta, Indonesia, in mid-November. White House officials could provide no further details, such as which Asian nations would be included in such talks, or when they would begin.
APEC currently has 16 member nations, and that number will become 17 in November, when China is slated to join the group. Just four of those 17 nations--China, Taiwan, South Korea and Hong Kong--accounted for 33.4 percent of all U.S. textile and apparel imports during August and 37.3 percent of all apparel imports during that month.
If just three other APEC members are included--Sri Lanka, Indonesia and the Philippines--the imported apparel percentage jumps to 48.9 percent.
As outlined by the White House, the Clinton plan "is too nebulous to comment upon, especially when we're focusing on gaining [NAFTA] parity for the Caribbean Basin nations," said Stewart Boswell, the American Apparel Manufacturers Association's president.
"It has all the earmarks of just another political speech," said Seth Bodner, the National Knitwear and Sportswear Association's president.
"There's been no discussion at all with industry trade advisory committees, and by the time there's a U.S.-Pacific Rim [free trade] zone in 10 or 20 years, we will see the end of import quotas under the GATT," Bodner said. "This is going to eliminate the domestic apparel industry and force it out of our country, so who will be left to worry about this other agreement?"
Officials with the textile and apparel import communities were not overjoyed at the prospect of Clinton establishing free trade with Asia, either.
"We all applaud free trade, but based on what the administration has done in the past 18 months, Clinton's Jakarta announcement won't be anything to cheer about," said Laura Jones, executive director, the U.S. Association of Importers of Textiles and Apparel. Jones said Clinton's record shows he is not for free trade in the true sense of the word.
"We get a NAFTA with an origin rule so restrictive it makes importing from Mexico difficult. Clinton supported a fee on wool imports; his trade people put quotas on imports from Kenya, El Salvador and the former Yugoslavian republics," she said. "Overall, Clinton talks about global trade, but then only focuses on increasing exports. But in order to export, you must import."
Less sanguine yet about the benefits of a U.S.-Pacific Rim free trade concorde, Eugene Milosh, president of the American Association of Exporters and Importers, said Clinton "probably would choke on the yarn-forward rule when he has to publicly explain to the APEC nations what this means."
Importers were angered by Clinton's support for this rule, first developed by the Bush administration, that accords NAFTA free trade benefits only to apparel made in North America from North American-origin fabric and yarn. However, Milosh said it makes little sense to even talk about a U.S.-Asia free trade agreement since Congress just recently turned down Clinton's plea to extend his authority to use fast-track procedures to negotiate further trade pacts. Most foreign nations will not negotiate trade treaties without fast-track, since Congress could amend them at will.
"Frankly, it's impossible to imagine the Clinton administration agreeing to any more liberalization of textile and apparel trade when you consider its recent actions changing the origin rules in the GATT," added Jim Langlois, executive director of the Seattle-based National Apparel and Textile Association.
--Fairchild News Service

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