WASHINGTON — The textile industry might be making one of its last stands.
This story first appeared in the July 25, 2003 issue of WWD. Subscribe Today.
Facing staggering job losses and plant closures, steep price declines and penetrating imports from China, textile executives delivered that defining message to lawmakers Thursday.
In a drive that has reached a fever pitch, 18 executives from domestic fabric, man-made fiber, cotton and yarn-spinning companies converged on Capitol Hill to plead their case for survival. Standing shoulder to shoulder with several House lawmakers, textile and fiber executives called on the Bush administration to curb the flow of imports from China.
“The textile and apparel industries are the largest employer group in this country,” Allen Gant, chief executive officer of Glen Raven Inc., said at a press conference. “We are talking about survival and we have come here to ask Congress to lean heavily on the administration to enact the China safeguard.”
To that end, the textile and fiber coalition filed four petitions with the government Thursday seeking to stem apparel and textile imports from China, which they claim have eviscerated their industry.
“The safeguard was not inserted for cosmetic purposes,” said Rep. Howard Coble (R., N.C.) and co-chair of the House Textile Caucus, at the news conference. “It was inserted for surges that cause market disruption and that’s where we are today.”
Rep. Cass Ballenger (R., N.C.) said China’s currency is tied to the dollar and is undervalued, which puts enormous pressure on domestic manufacturers.
“As far as China is concerned, if our currency goes down, theirs goes down,” Ballenger said. “If the Chinese currency is undervalued by 40 percent, these guys are starting off with their foot in the bucket. How about putting a tariff of 40 percent on anything out of China?”
Textile plants are closing every day, not once a year, said Rep. Bill Pascrell, Jr. (D., N.J.). “We are putting the administration on notice now that we are united, that we do not believe jobs are expendable and we won’t tolerate it,” Pascrell said. “This recession was different than any other. Not only were people out of work, but they were out of work for a longer period of time.”
The textile industry has lost 271,000 jobs, or 26 percent of its workforce, since January 2001. Total employment in the twin industries stands at 773,200, according to Labor Department figures.
John Emrich, president and ceo of Guilford Mills, noted his firm has shut down seven plants and laid off 3,500 people over the past two years.
“It’s not fair. It was not based on the [lack] of ability to be cost effective and competitive,” Emrich said. “You can’t compete when you have an artificial playing field that plays against us the way it does with currencies, government subsidies and the export credits China has. The way our manufacturing base is disappearing only proves our trade policies aren’t working.”
If China’s trade goes unchecked, the U.S. textile and apparel industries stand to lose 630,000 jobs by 2006, while China’s import market share increases to 70 percent, according to the American Textile Manufacturers Institute’s in-house report, which is disputed by importers.
James Leonard, chairman of the Committee for the Implementation of Textile Agreements and deputy assistant secretary of textiles, apparel and consumer goods industries at the Commerce Department, said he had not “officially” received the petitions when reached Thursday afternoon. As to whether the textile industry’s job losses are directly tied to enormous surges in imports from China, Leonard said: “The procedures deal with market disruption, not job losses. We took criteria and developed procedures we felt comfortably relates to those criteria.”
Asked why the administration did not self-initiate the safeguard action, Leonard said: “We just haven’t. These petitions will be looked at on their merits.”
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, according to the Commerce’s latest figures. Imports of apparel and textiles from China surged 66 percent to 656 million square meters equivalent versus a year ago, while the entire world’s imports fell by nearly 1 percent.
Coalition members filed separate petitions in the categories of knit fabric, cotton and man-made fiber gloves; cotton and man-made fiber dressing gowns and robes, and cotton and man-made fiber bras. The petitions are the latest step in an effort to pressure the Bush administration to invoke a special textile and apparel safeguard against China and live up to its commitments to minimize the impact of future trade deals in the textile industry.
Under the terms of China’s World Trade Organization membership agreement, countries can impose category-specific limits for up to a year if Chinese imports are causing market disruption. The coalition is seeking to reimpose quotas on four of several categories that were lifted in January 2002 as part of a 10-year phaseout of global quotas set to expire on Dec. 31, 2004.
Under the safeguard procedures, CITA, an interagency group comprising five agencies, has 15 business days to make sure the petition is valid. CITA would then post the petition on a Web site for a 30-day public comment period. CITA then has 60 days to make a determination on the petition after the comment period closes.
Importers and apparel manufacturer groups denounced the safeguard petitions.
“Restrictions on China, if they were imposed, aren’t going to bring product back to this hemisphere,” said Stephen Lamar, senior vice president of the American Apparel & Footwear Association.
Laura E. Jones, executive director of the U.S. Association of Importers of Textiles & Apparel, said, “Trade from around the world increased, not just from China. There also has been recession. The idea that China is the cause of all their ills is ludicrous and obviously not credible.”
In related news, the House voted 270 to 156 in favor of the U.S.-Chile Free Trade Agreement Thursday and also approved the U.S.-Singapore Free Trade agreement by a vote of 272 to 155. The Senate is expected to take up the two trade bills as early as today.