FTL, SARA LEE PUSH CONGRESS TO APPROVE CBI LEGISLATION
Byline: Joanna Ramey
WASHINGTON — Two kingpins of underwear manufacturing — John Bryan of Sara Lee Corp. and Dennis Bookshester of Fruit of the Loom — have put their clout together in a pointed lobbying effort.
Their cause is to get Congress to pass legislation this year dropping tariffs and quotas on apparel made in the Caribbean and Central America.
Last week, the competitors teamed up to bring this message to Senate Majority Leader Trent Lott and House Speaker Dennis Hastert, according to sources familiar with the separate meetings.
Chief executives Bryan and Bookshester, as part of a larger coalition of apparel makers, retailers, yarn spinners and cotton growers, want to help broker a compromise between the Senate version of the bill, which calls for apparel receiving trade breaks to be made only from U.S. textiles, and the House bill, which makes allowances for Caribbean Basin fabrics.
The coalition’s lobbying has taken on a sense of urgency. House and Senate trade leaders claim they need to settle differences on the textile issue and vote on a bill by April, fearing the measure might be shelved once Congress turns its attention to China’s trade status and the November election.
In trying to further a deal, Bryan and Bookshester, neither of whom could be reached for comment, have changed their companies’ six-year-old positions on the textile issue in an effort to get a measure through Congress. Sara Lee used to advocate the House bill and Fruit of the Loom was a staunch supporter of the Senate version. Now, they’re pushing for any legislation that falls somewhere between the two measures, but would settle for the Senate version.
FTL’s and Sara Lee’s old thinking was based on each company’s manufacturing advantage: Fruit of the Loom makes knit fabrics in the U.S. and ships it to Central America to produce underwear and active wear, while Sara Lee produces its Hanes brand underwear and garments in the region where it also sources some of its knit fabric.
While the companies’ sourcing strategies haven’t changed, their need for some type of a Caribbean Basin trade bill, along with others in the apparel, textile and retail industries, has increased as global textile and apparel trade has heightened. This competition is expected to get even more fierce by 2005 when global quotas on textiles and apparel are eliminated.
Coalition members would like the broadest textile-origin rule as possible, yet the group realizes that politically the House version won’t fly, given fierce opposition in the Senate.
Ideally, the coalition doesn’t want the Senate version either, arguing that a U.S.-textiles-only rule would limit apparel production growth in the Caribbean-Central America region, where apparel assembly has flourished under already liberalized trade rules.
However, coalition members — including Bookshester and Bryan in their Capitol Hill meetings — have acknowledged the Senate bill is better than no bill at all.
In order to bridge the House-Senate gap on textiles, the coalition wants lawmakers to grant trade breaks to regional knit fabrics, if they contain U.S. yarn, and, if cotton is involved, U.S. cotton. Slight allowances would be made for foreign-made components.
“This proposal still leaves plenty of opportunities for the U.S. textile industry,” said Erik Autor, vice president and international trade counsel for the National Retail Federation.
Larry Martin, president of the American Apparel Manufacturers Association, called the compromise “logical,” and said, “It’s good for the textile industry, good for the yarn spinners and good for the apparel makers.”
However, Doug Bulcao, director of government relations at the American Textile Manufacturers Institute, said the knit-fabric proposal would kill U.S. knit fabric producers or force them offshore, including Fruit of the Loom.
“They are fighting for their survival,” Bulcao said of Fruit of the Loom, whose helm Bookshester assumed after the company filed for bankruptcy last year.
After preliminary talks last week, it seems apparent that House and Senate trade leaders are in the mood to compromise. However, Majority Leader Lott, who hails from Mississippi, continues to caution that any major departure from the Senate bill wouldn’t pass muster with his colleagues.
Lott, who also comes from a textile state where a Fruit of the Loom knitting plant employs 1,000 workers is located, said Wednesday he’s concerned about job losses that might be generated by any bill that strays too far from the Senate version. Lott’s home state is also the fifth- largest cotton producing state in the country, so he’s also facing pressure from the industry for a regional fabric component.
“I don’t want it to lead to jobs leaving America,” Lott told WWD Wednesday. “There is going to have to be some limit on the regional textile question.”
Further complicating talks among lawmakers are discussions regarding apparel trade breaks for sub-Saharan Africa, which are contained in the same legislation as the Caribbean Basin provision.
The same House-Senate divisions also occur regarding Africa. The Africa portion of the trade bill, as far as U.S. apparel makers are concerned, is of less importance. Retailers are strongly backing the House proposal on Africa, and textile makers, including cotton growers and yarn spinners, are siding with the Senate.