WASHINGTON — The National Cotton Council, which represents manufacturers and ginners, has reversed position and lined up in support of the Central American Free Trade Agreement.
The endorsement came after the National Council of Textile Organizations endorsed CAFTA on Monday and deepens the divisions within the textile and fiber industry.
The American Manufacturing Trade Action Coalition and National Textile Association, separately representing large segments of the industry, remain opposed to the accord.
The Bush administration is facing intense opposition to the trade pact in Congress and is trying to bolster support for it. To that end, the administration has agreed to seek CAFTA amendments, including one that would require that pocketing and lining fabrics be supplied by the U.S. or the six signatory countries.
The NCC’s decision was swayed partly because it received assurances from the administration that Nicaragua, which will be allowed to use a limited amount of foreign fabric in its exports, had committed to preserving the existing $100 million U.S. fabric and yarn business, said Gary Adams, chief economist for the council.
“We were certainly initially not supportive of it because of concerns of third-country participation,” Adams said. “We have seen some of our concerns addressed [by the administration] over the last few months. We’ve seen that the way it can be implemented can address some of our concerns and still convey the benefits to both the U.S. cotton industry and the industry within Central America.”
The cotton council said in a statement that U.S. raw cotton exports to Central America in 2004 totaled 200,000 bales, or $67 million, and accounted for more than 90 percent of raw cotton consumption in those countries. The NCC also said U.S. exports of yarn and fabric was more than 2.5 million bales of cotton textile products, more than 50 percent of total U.S. cotton textile exports in 2004.
“Ultimately, it came down to the fact that we felt like we have trade arrangements within the Western Hemisphere between the U.S. and other countries that should continue to be viable and important for the health of the U.S. cotton and textile industry,” Adams said.
Meanwhile, NCTO chairman Allen Gant Jr., who is also president and chief executive officer of Glen Raven Inc., and Jim Chesnutt, president and ceo of National Spinning Co., met in Washington Tuesday with a delegation from China’s Ministry of Commerce.
Cass Johnson, president of NCTO, said the Chinese requested the meeting with its board members. Johnson said China safeguards were the focal point of the discussions.
“They told us that was not the way to go for constructive relations and we said safeguards are an inalienable right under the WTO, and the industry is insisting they be put into place or hundreds of thousands of jobs will be lost,” he said.
The U.S. is reviewing a spate of China safeguard petitions, including three it self-initiated, to determine whether to impose new quotas on Chinese apparel and textile products, including cotton trousers and cotton and man-made fiber knit tops.
Chinese officials also have three days of trade-related meetings with representatives of the Commerce Department beginning today, said a Commerce spokeswoman, led by acting Assistant Commerce Secretary Joseph Spetrini.