IMPORTERS APPLAUD APEC PACT, BUT MANUFACTURERS ARE ANXIOUS

Byline: Jim Ostroff

WASHINGTON — Importers gave an enthusiastic thumbs up to the agreement reached Tuesday among Asian-Pacific nations to begin eliminating trade barriers by 2010, but spokesmen for the domestic textile and apparel manufacturing industries expressed only anxieties over the prospect.
Martin Trust, president of Mast Industries, a subsidiary of The Limited and its sourcing arm, called the agreement a potential “blessing for the U.S. consumer.”
Larry Martin, the American Apparel Manufacturers Association’s incoming president, said, “There is a grave concern about duty-free imports from a region that has the capability of dominating the entire U.S. market for apparel and textiles.”
The reaction, though, was not altogether cleanly two-sided. Both sides, importers and manufacturers, were critical of the Clinton administration not consulting with industry before promoting this proposal. Also, while import officials praised the plan that could make it much easier to source in Asia, there were some doubts voiced as to whether the U.S. would actually allow this to occur.
In Jakarta, where the 18-nation Asia-Pacific Economic Cooperation forum adopted the free trade goal, leaders were jubilant at the prospect of creating the world’s largest, most lucrative free trade zone — even though they did little more than set timetables.
By the year 2010, the developed APEC-member nations, such as the U.S, Japan, Canada, Australia and New Zealand, would eliminate quotas and duties on imports from one another, as well as from the bloc of less developed nations (LDCs) including Thailand, Chile, Indonesia and Papua New Guinea. By 2020 all APEC nations would trade freely.
The announcement of this two-tiered system was short on specifics. It is unknown whether this trading bloc, whose members today account for about 40 percent of world trade, would set rules-of-origin and exclude certain products from free trade treatment, as was the case in the North American Free Trade Agreement.
Nor was there any mention about how countries would be classified as developed or LDCs, a crucial issue since China maintains it is a developing nation.
The scant details that were released were enough to unnerve U.S. industry officials such as Carlos Moore, the American Textile Manufacturers Institute’s executive vice president.
“Without getting access to the LDCs’ markets this is a one-sided deal that would be so unbalanced as to be politically and economically unfeasible and certainly something our industry would oppose,” Moore said.
The ATMI official said he especially is concerned that China is seeking application to join the World Trade Organization as a developing nation. China’s president Tuesday indicated his nation should not be considered “developed” for many more years.
“Many countries in the Far East, especially China, have engaged in every kind of unfair trade practice, subsidy and scheme to promote their exports,” Moore said. “It is out of the question to consider giving them free access to our market and allow them to protect their own. The damage to our production would be significant and cause an enormous loss of jobs.”
Both the AAMA’s Martin and the ATMI’s Moore expressed ire that the Congressionally mandated Industry Sector Advisory Committees were not consulted by the Clinton administration before making the free trade decision. Officials of retailer and importer groups, in another advisory committee, also chided the administration for excluding them.
Moore also averred Clinton should focus on expanding NAFTA to include Caribbean and Latin American nations “where we have good relationships, there are good markets for our products and they are good producers of other products, rather than trying to promote free trade with Asian countries….”
Others, though, contended the APEC announcement could produce positive results in this hemisphere. Stephen Lande, a former U.S. trade official who now operates Manchester Trade, a consulting firm, and is an adjunct professor at Georgetown University’s School of Foreign Service, said the APEC decision “probably assures the success of the Hemispheric Summit” next month in Miami “since the U.S. can’t go slower with our hemisphere than with Asia.” He noted the summit of hemispheric leaders will consider setting 2000 as the deadline to complete negotiations on eliminating duties among these nations, which then could be phased in over a decade or more.
Also, APEC’s move could prod Latin leaders to seek free trade with NAFTA nations, said Bennett Marsh, deputy executive director for trade policy with Caribbean/Latin American Action.
“This may break the logjam that has held back some leaders from endorsing the free trade concept since [the APEC plan] allows for the accommodation of nations’ special needs, such as giving LDCs more time” to eliminate import barriers, Marsh said.
Mast Industries’ Martin Trust predicted that should Asia-Pacific free trade become a reality, “it will change the way we source because we will have to give less consideration to which country has the quota.” Creation of such a free trade zone, he said, “would be a blessing for the U.S. consumer because we will be able to source products that suit their fashion needs as well as their financial needs — without regard to who owns a license for quota that allows them to ship goods to the U.S.”
Eugene Milosh, the American Association of Exporters and Importers’ president, said the Jakarta plan should spur investment agreements in the Far East.
‘The domestic apparel and textile companies need not worry,” he said. “Probably, they’ll be investing and operating in these (LDC Asian) countries, and I wish them well. If not, they won’t be around.” He also forecast that more U.S. jobs will be created than lost as a result of export-oriented industries growing to meet the demand for U.S. goods worldwide, which Milosh said would be fueled by creation of a Western Hemisphere free trade zone.
More cynical about free trade prospects was Laura Jones, the U.S. Association of Importers of Textiles and Apparel’s executive vice president. She noted the U.S. had a history of setting free trade deals and then tying them down with protectionist provisions.
“It is nice for the Clinton administration to talk about creating the Wonderful World of Free Trade a quarter century from now and emphasize the importance of free trade, but obviously no one has communicated this to the [U.S. Trade Representative] and his textile negotiator,” Jones said. “On the same day Clinton endorses creating a landmark free trade zone, Jennifer Hillman, the U.S. textile negotiator, is in Kiev negotiating to put controls on the import of woolen coats from the Ukraine, one of Europe’s poorest nations…”
— Fairchild News Service

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