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government-trade

China’s Ripple Effect: U.S. Textile Industry Targets ’04 Ballot Box

In a meeting today in Spartanburg, S.C., a textile coalition will launch a grassroots lobbying campaign, with registering voters as its centerpiece.

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WASHINGTON — Congress and President Bush may be on vacation this month, but U.S. textile industry executives aren’t taking a break in their campaign to ratchet up pressure on the White House to limit Chinese imports and customize free-trade agreements to curb mill losses.

In a meeting today in Spartanburg, S.C., 35 executives from a coalition of fabric, yarn and fiber companies and their associations are launching a grassroots lobbying campaign with voter registration as its centerpiece. A similar meeting was held Monday in Greensboro, N.C., with 40 executives.

“If [President Bush] wants to go back to the White House, something has to be done about the manufacturing policy in this country,” said coalition member Jim Chesnutt, president and chief executive officer of National Spinning Co., Washington, N.C.

The textile contingent is angling for the Bush administration to limit ballooning imports of low-cost apparel and textiles from China they claim unfairly compete with U.S. mills and are a main culprit in the industry’s downward spiral.

“They manipulate their currency, they cheat, they do nothing in terms of the environment, working and social conditions we have to do in this country,” Chesnutt said in a phone interview.

The coalition’s strategy is to tap into growing anger about textile company losses and escalating industry unemployment to motivate executives and workers to lobby the White House on restricting Chinese imports.

Although not endorsing or singling out candidates for defeat, the coalition, through its company members, is launching a voter registration drive across the South to further pressure the administration, as well as Capitol Hill lawmakers up for reelection in 2004, to support textile industry friendly trade policies.

For example, the coalition is advocating that a Central American Free Trade Agreement, now being negotiated, should exclude any allowances for non-Central American or U.S. textiles to be used in apparel receiving U.S. duty breaks. The administration wants CAFTA completed by 2004.

“As long as the playing field is level, I’ll compete with anyone in the world….I’m rabid about this,” said Alan E. Gant Jr., chief executive officer of Glen Raven Inc., a coalition member based in Glen Raven, N.C. “There is a direct correlation between our trade policy and loss of manufacturing jobs. As soon as our senators, congressmen and the administration understand this, the better off we’ll be.”

Although the Clinton administration also advocated free-trade policies, the pressure is even greater on the Bush administration over the issue of textile job losses and manufacturing declines. Since President Bush took office in January 2001, 152,200 U.S. textile jobs and about as many apparel jobs have been shed, much of them in the South. Compounding the decline in the region are losses in other industries, like furniture, which are also part of a broader national decline of more than 2.5 million manufacturing jobs during the last three years.

Manufacturing unemployment, a national unemployment rate of 6.2 percent and the sluggish economy are already key issues for Democratic presidential candidates looking to unseat Bush next fall. The President, who’s made expanding free-trade agreements a priority, is maneuvering to shore up his support on manufacturing with an expected release next month of a plan of action.

A separate White House task force, created last year to help U.S. textile mills compete, also is set to release a report in the fall. Expected in the report is a study about which foreign countries stand to benefit or lose in 2005, when all global quotas limiting textiles and apparel for World Trade Organization members are eliminated.

China’s further hold on the global textile and apparel market after 2005 is already apparent in categories where quotas have been lifted. This year, China knocked Canada out of its top slot as the largest foreign textile supplier to the U.S. China now supplies 20 percent of the imported textile market, a 160 percent increase for the year ending in May. For apparel, China is the number two foreign supplier to the U.S. behind Mexico, with 11 percent of the market, a 75 percent annual increase.

So far, the textile coalition has asked that quotas be reinstated on four Chinese import categories of bras, nightgowns, gloves and knit fabrics. China agreed to reinstatement of quotas under terms of its WTO membership, should another member deem Chinese imports are disrupting their markets.

North Carolina, where Monday’s textile coalition meeting took place in Greensboro, is one of the states where the topic of Chinese quotas, trade agreements and associated job losses is daily front-page news. The issue came to the fore again last month when Pillowtex Corp. filed for bankruptcy and announced the closing of its 16 textile factories and distribution centers, affecting 6,450 workers for the largest single layoff in North Carolina’s history.

“This is just the latest bad news stemming from the impact of federal trade policies on our manufacturing industry,” North Carolina Democratic Gov. Michael Easley wrote Bush last week, offering some solutions.

The governor asked Bush to withdraw the recently penned Vietnam textile agreement, which the textile industry assails as promoting cheap Vietnamese imports over U.S.-made apparel and textiles. Easley also urged Chinese quotas be reinstated on “sensitive textile and apparel categories.”

Should the Bush administration side with the textile industry and impose Chinese import quotas, he would be acting contrary to the interests of U.S. retailers and importers, several of which, including Wal-Mart, are huge GOP campaign contributors. By the same token, Bush has enjoyed widespread voter support in the South, including among textile executives who aren’t as prolific as campaign contributors as importers are.

On Monday, the U.S. Association of Importers of Textiles & Apparel released a letter it sent to a Commerce Department official arguing that the textile industry hasn’t adequately presented its case that Chinese imports are disrupting their business and met the standard that would impose quotas, also known as safeguards.

“We agree that it is important that the United States government should have the ability to take action if imports from China threaten the health of the U.S. textile industry,” wrote Laura Jones, USA-ITA executive director, to Jim Leonard, chairman of the Committee for the Implementation of Textile Agreements.

However, Jones dismissed the textile coalition’s assertions as “general” that Chinese imports “threatened to impede the orderly development of trade and caused market disruption.”

“It would appear,” wrote Jones, “the petitioners are attempting to use the China textile safeguard procedures as a mechanism to eliminate the need for their member companies to prepare for the end of quotas in 2005.”

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