WASHINGTON — U.S. trade officials, ratcheting up an aggressive campaign to sell the controversial Dominican Republic-Central American Free Trade Agreement, downplayed textile industry opposition to the pact, claiming momentum is on their side.
At a press briefing here Wednesday, they also stressed they will not renegotiate the trade deal, despite making such overtures to textile executives in recent weeks.
“We are working actively with textile ceo’s across the spectrum,” said Chris Padilla, assistant USTR for intergovernmental affairs and public liaison, at the briefing. “Most textile companies recognize the benefits of D.R.-CAFTA. There are a couple of vocal companies who have expressed some concerns, but I believe we are going to win the support of the majority of the industry. I think [textile executives] understand that CAFTA can’t be renegotiated…This is the agreement we have on textiles, this is the agreement we have on sugar, this is the agreement we have on labor and this is the agreement we will send to Congress.”
The Bush administration will make a hard push for the trade deal in North Carolina — a state that has lost 61,800 textile and apparel jobs since January 2001— today and Friday. Padilla and David Spooner, special textile negotiator for the Office of the U.S. Trade Representative, will usher five ambassadors from Central America and the Dominican Republic to Charlotte today and Raleigh on Friday.
Jerry Cook, vice president of international trade at Sara Lee Branded Products, and Peter Hegarty, president of Tuscarora Yarns, are among the executives slated to speak at the forums. The goal is to explain the benefits of CAFTA and of free trade in the region and highlight the importance to North Carolina as an export region, trade officials said. Central America and the Dominican Republic combine to be North Carolina’s second-largest export market, primarily because of the heavy concentration of textile mills. In 2004, U.S. textile and apparel exports to the CAFTA countries and the D.R. totaled $4.2 billion, representing 26 percent of the industry’s total exports to the world of $16.25 billion.
Domestic textile and fiber groups, which formed a coalition to fight any allowances for foreign fabric or yarn in the trade pact, were infuriated by the final deal, which contains exceptions or foreign inputs that they claim will take business away from the beleaguered U.S. textile industry and lead to more job losses.
This story first appeared in the February 17, 2005 issue of WWD. Subscribe Today.
The coalition continues to take issue with numerous exceptions, including 100 million square meters equivalent of fabric from anywhere in the world for Nicaraguan apparel production. Another exception was granted to Mexico and Canada, allowing 200 million SMEs of Mexican and Canadian fabric to be used by any of the six countries.
One of the major roadblocks to the D.R.-CAFTA’s passage in the House — the pact’s first and steepest congressional hurdle — has been opposition by the domestic textile sector. But there has been a shift in some individual positions, as more executives claim publicly they favor the pact and hope to continue the dialogue with the administration. The Bush administration has been reaching out to the National Council of Textile Organizations and the National Cotton Council in an effort to ease the industry’s concerns over the bill.
Padilla did not directly answer a question on whether the administration is trying to cut a deal with textile executives, such as committing to curbing Chinese imports, in exchange for their support of CAFTA.
He said the China safeguard petitions, which are currently entangled in a court case, is “a process that will [move] in its own due time. There is no question the end of quotas has focused the minds of a lot of people in this industry on where their commercial interests really lie and that’s why they are going to come around and support CAFTA.”
(In the safeguards case, the U.S. Court of Appeals for the Federal Circuit granted the government’s motion for an expedited schedule in its appeal of a temporary injunction issued by the U.S. Court of International Trade. It said the U.S. Association of Importers of Textiles & Apparel must respond by March 7 to an appeal filed by the Department of Justice late Monday night. It also determined the Justice Department will need to reply to the response by March 15. In response to a suit filed by the USA-ITA, the court has already issued a preliminary injunction barring the government from reviewing or accepting China safeguard petitions based on the threat of market disruption.)
As for CAFTA, Auggie Tantillo, executive director of AMTAC, said his association has not been approached by administration officials.
“It’s unnecessary for us to be involved in any discussion because we could never support an agreement that would cost U.S. jobs,” said Tantillo. “Opposition to CAFTA is strong.
Missy Branson, senior vice president of NCTO, acknowledged the strong opposition to the deal, as well as support within NCTO.