By and  on November 9, 2006

WASHINGTON — The Democrats' victory in the House, and possibly the Senate, may have wide-ranging implications for trade, wage and tax policies that affect apparel manufacturing and retailing.

House Minority Leader Nancy Pelosi (D., Calif.), who is in line to become the first woman speaker, has outlined an aggressive agenda that includes raising the minimum wage and repealing incentives that "serve to export American jobs overseas." As the Democrats took control of the House for the first time in 12 years, Pelosi promised to cut taxes to spur economic growth, help business become more competitive and keep middle-class taxes low.

Both President Bush and Pelosi said on Wednesday that they would work together to find common ground in a political landscape turned upside down. That might be easier said than done. There have been fears, particularly among retailers and importers, that Democrats will stifle new free trade deals. Others, however, see a potential for dialogue that will energize cooperation on trade issues.

"Any change in philosophy toward free trade will be ultimately, we believe, problematic for our industry and ultimately problematic for the consumer," said Peter Boneparth, chief executive officer of Jones Apparel Group, referring to the Bush administration's free trade strategy. "I'm hopeful that's not the case. I'm hopeful that despite the changes in Congress, free trade continues to be the mantra for the U.S."

In discussing core industry concerns, executives and lobbyists acknowledged the need for national unity and a cohesive plan for Iraq.

"It is very exciting in the fashion business to have change, and a major change like this is invigorating….I think the country now has a sense of trust, and consumer confidence builds great business," said Bud Konheim, ceo of Nicole Miller, who urged a "rational approach to protection and free trade.''

The impact of the shift in power could cut both ways, said Brad Figel, global director of government and public affairs at Nike Inc., the world's largest athletic company, who heads the Washington lobbying office.

"It is not good for business if the trade agenda stalls — that's the downside," Figel said. "But if there is a consensus moving forward [and a more open dialogue between Democrats and Republicans] and trade legislation passes on a bipartisan basis, it will be terrific."

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