WASHINGTON — President Bush’s State of the Union address Wednesday night didn’t mention his trade-expanding ambitions, but proponents in the apparel importing community aren’t dismayed.
They are confident that White House lobbying efforts for Congress to enact the next big pact — a Dominican Republic-Central American Free Trade Agreement — are already in full gear and plans for more tariff-dropping pacts, including one across the Middle East and with southern African countries, are still on the agenda. The administration is also expected to push for further trade liberalization, such as cutting tariffs, at the ongoing global trade talks.
“It would have been a nice shot in the arm, but we know the administration wants D.R.-CAFTA,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association.
Burke said he and a dozen apparel executives, including Jones Apparel Group president and chief executive officer Peter Boneparth, Liz Claiborne chairman and ceo Paul Charron and Jockey International president and ceo Ed Emma, received administration assurances on D.R.-CAFTA in White House huddles last week with Treasury Secretary John Snow and U.S. Trade Representative Robert Zoellick.
While the main fights for the administration will be social security and budget cuts, the trade pact with Honduras, Guatemala, El Salvador, Nicaragua, Costa Rica and the Dominican Republic is seen by importers as key to keeping the region a competitive garment production platform for the U.S. D.R.-CAFTA is expected to be taken up by the House in late spring.
Steve Pfister, senior vice president of government relations with the National Retail Federation, which counts Federated Department Stores and May Co. among its members, said, “The rhetoric doesn’t always match reality,” and warned that the President’s upbeat outlook faces tough Congressional fights on such issues as social security and government funding, as Bush seeks to cut the nearly $500 billion federal deficit in half.
Paul Kelly, senior vice president of government affairs with Retail Industry Leaders of America, which has Wal-Mart and Home Depot among its members, was keen to hear Bush’s renewed call to make his tax cuts permanent, as an economic stimulus. But Kelly is wary about his call for aggressive federal budget belt-tightening and how it would affect crucial federal projects, such as road and bridge construction aimed at improving cargo transport at the nation’s ports.
“That’s going to mean some very tough spending choices in Congress, which could impact retailers,” Kelly said.
George Schuster, ceo of Cranston Printworks, based in Cranston, R.I., who is also a board member of the National Textile Association, found Bush’s assessment of the economy as “healthy” as too rosy.
“The U.S. economy is extremely fragile right now,” said Schuster, citing the “sinking” value of the dollar and mounting U.S. trade deficit with its foreign trade partners.
Mark Levinson, chief economist with the apparel and hospitality worker union UNITE HERE, noting the decline of almost three million manufacturing jobs since Bush took office in 2001, said, “He tries to put a positive spin on the economy, but it’s been a dismal failure from the perspective of losing jobs and job creation. He said nothing in the speech that leads me to believe that things are going to get any better. Not only is he pursuing trade deals like CAFTA…but his budget and social security proposals would be terrible for workers.”