By  on January 29, 2002

WASHINGTON -- As the world of international trade counts down to 2005 and the elimination of major trade barriers, the fate of the domestic textile industry hangs in the balance.

In less than three years, quotas will be lifted on all apparel and textile imports for the 144 countries in the World Trade Organization, and it is expected to dramatically change the face of both industries.

The first significant step in that phaseout process began on Jan. 1, when the U.S. lifted quotas on a variety of products, including knit fabrics, suits, coats, jackets, shirts, blouses, dresses, skirts and trousers made of silk blends, ramie or linen, bras, robes and dressing gowns, and knit neckwear.

Textile and apparel manufacturers will be forced to embrace Darwin's "Survival of the Fittest" theory, as the protections of the Multi-Fiber Arrangement are ushered out and a new global trading stage emerges.

"I expect more [textile] plant closures, and there will be no apparel industry in the U.S. to speak of," predicted Charles Bremer, director of international trade at the American Textile Manufacturers Institute. "The only way the textile industry will survive, at least in the apparel fabric sector, is to export to the CBI and other countries with which the U.S. has preferential trade agreements."

Most industry officials and observers contend the textile industry won't disappear completely, but severe consolidation, under way for some time and accelerating lately with bankruptcies and severe cutbacks from major mills, is expected to continue. Some claim offshore textile production, particularly in Asia, will continue to grow in importance.

The potential winners of this new order are importers, retailers, manufacturers and ultimately consumers, although the argument persists over deflationary benefits to shoppers versus the loss of jobs in manufacturing and its impact on the economy. Retailers and manufacturers see it as a huge opportunity to consolidate foreign production and lower costs. That means the number of foreign exporting nations could also dramatically decline, which could be disastrous for some developing nations' economies.

There is no dispute that China -- a new member of the World Trade Organization -- will be the dominant player when all quotas on textiles and apparel are lifted in 2005. The big question is which countries will be able to compete with the Asian giant.

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