AAMA SEES CARIBBEAN BASIN GETTING PARITY WITH MEXICO
Byline: Brenda Lloyd
ATLANTA — Caribbean apparel makers will have parity with Mexico under the North American Free Trade Agreement by Labor Day, Michael Gale, government relations director for the American Apparel Manufacturers Association, predicted here Wednesday.
Gale spoke at an AAMA-sponsored seminar on GATT and other trade agreements.
The parity bill, introduced two weeks ago by Rep. Phil Crane (R-Ill.), will be heard in the House on Feb. 10 and should be in effect by Labor Day. It has bipartisan support in both chambers, as well as the White House, which pulled its own Interim Trade Program for the Caribbean from the GATT legislation because of opposition from organized labor.
The Republican legislation is similar to the administration’s but goes further by including footwear, sugar, oil products and other products unrelated to textiles and apparel in its provisions. Its passage, Gale continued, will assist U.S. companies to maintain their competitive positions in the global market by allowing those companies using Caribbean sourcing to lower their average costs and to maintain considerable employment in U.S. factories.
The current devaluation of the Mexican peso will tilt the export advantage in favor of Mexico and give Mexico an added advantage over the Caribbean Basin Initiative region, he added, indicating the increasing need for parity in the Caribbean.
Another speaker, Robert P. Antoshak, president of Trade Resources Inc., gave his assessment of what will happen to the markets in certain apparel items in the U.S. with the end of quotas under the Uruguay Round.
Because quota growth levels were negotiated independently of U.S. market growth, there will be a great deal of under-utilized quota. As a result, import prices may vary depending on quota usage and are able to surge into the U.S. market in large quantities even though they’re under quota, creating a great challenge to domestic manufacturers.
For some categories, including sweaters and woven shirts, the 10-year GATT phaseout of quotas actually will be over in about five years because the quotas will be so large they’ll be meaningless in the U.S. market.
In cotton and manmade fiber woven shirts, for example, Antoshak surmised, using the 1993 U.S. market level throughout the 10-year phaseout period, that the quota projection will be above the market level by 2001. The same goes for cotton blouses by 2002, and for man-made fiber sweaters, where quota already has surpassed projections.
“It will grow so fast that there won’t be any protection for the market here,” Antoshak said.
At the same time, dramatic shifts will occur favoring countries where available quota is to be found, with some showing remarkable growth and others little to none. For example, Pakistan and Turkey will more than double their quota of cotton knit shirts and blouses by 2004, while China will gain very little. Indonesia and Thailand are the big winners in the cotton sweater category, with China again the loser. Traditional suppliers will lose market share to second-tier countries, Antoshak said, including those in Latin America.
— Fairchild News Service