WASHINGTON — For the first time in decades, one country’s apparel and textile exports to the U.S. grew, while the rest of the world’s declined.
This story first appeared in the July 14, 2003 issue of WWD. Subscribe Today.
Following its recent track, China has become so powerful it is overwhelming much of its competition and driving the rest of the world’s trade in apparel and textiles down.
Imports of apparel and textiles from China surged by 66 percent in May versus a year ago, while the entire world’s imports fell by nearly 1 percent, according to Donald Foote, director of the agreements division of the U.S. Department of Commerce’s Office of Textiles & Apparel.
China’s increase was so large it offset the world’s decline and led to an overall increase in textile and apparel imports of 7.5 percent to 3.39 billion square meters equivalent in May against a year ago, according to Commerce’s monthly trade report released Friday. Apparel imports rose 10.2 percent from May 2002 to 1.41 billion SME, while textile imports rose 5.6 percent to 1.98 billion SME.
“This is dramatic,” said Foote. “One country’s trade caused the total imports of apparel and textiles to the U.S. to increase even when the rest of the world declined. That’s unique.”
On a year-over-year basis, imports from China rose 65.6 percent to 656 million SME. China maintained a 19.3 percent share of the U.S. apparel and textile import market in May compared with May 2002. For 12 months, China controlled 15.82 percent of the U.S. import market.
“I have never seen such a concentration of textile and apparel trade like this,” Foote said.
Mexico, the second-largest supplier of apparel and textiles to the U.S., which also receives special duty- and quota-free treatment from the U.S. under NAFTA, was hit hard by China’s growth in May. Other countries also felt the blow, including Thailand, with a 24.5 percent drop; Hong Kong, with a 21.2 percent decline, and Sri Lanka, with a 20.8 percent falloff in the same period.
Chinese trade in four made-up categories — man-made fiber curtains and blankets; cotton luggage and towels; man-made-fiber textile bags and tents, and man-made fiber luggage — where quotas were removed in January 2002 accounted for 90 percent of the total textile and apparel growth in May, according to Foote.
Most notably, 83 percent of China’s entire textile and apparel imports to the U.S. is in products no longer subject to quotas, according to Foote.
A coalition of 14 cotton, man-made fiber, yarn spinner and fabric manufacturer groups recently sent a letter to President Bush urging him to invoke a special apparel and textile safeguard against China, which would reimpose quotas on narrowly defined apparel and textile imports from China. The groups maintain they will file their own petitions under the comprehensive government guidelines if the administration does not act first.
“When domestic demand does not grow fast and net imports globally increase, that puts enormous pricing pressure on domestic producers throughout the supply chain and more and more of them have to slash capacity and close down capacity,” said Charles McMillion, chief economist at MBG Information Services. “China is now devastating not only U.S. products, but it is undermining production in Africa, Mexico and the Caribbean.”
Importers painted a different picture, noting that many countries around the world actually increased apparel and textile imports to the U.S. at the same time China’s trade rose.
“China’s growth is spectacular but they are not the only country that has been growing, which has been in part due to integration and in part due to increased consumer demand,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.
She noted that Mexico is still the top supplier of apparel to the U.S., though its trade has slipped 4.95 percent for the first five months of the year. But apparel imports from Honduras were up 19 percent for the first five months, while apparel imports from El Salvador were up 11 percent in the same period. China’s apparel imports, on the other hand, rose a whopping 77.53 percent during those months.