ATLANTA — Caribbean apparel production is already feeling the squeeze of new competition from Mexico under the North American Free Trade Agreement, according to two speakers at a conference on trade here Wednesday.
The conference, attended by over 50 people, was sponsored by the American Apparel Manufacturer Association at the Hyatt Regency Hotel here and focused on such issues as giving the Caribbean Basin Initiative countries parity with Mexico’s new free-trade benefits under NAFTA. The ramifications of the Uruguay Round treaty of GATT for liberalization of world trade was another key topic.
“NAFTA threatens to seriously disrupt CBI apparel investment and co-production,” said Stephen Lande, president of Manchester Trade Ltd., a Washington international business consulting firm. “With NAFTA in place scarcely a month, a number of orders have already been shifted to Mexico from Caribbean suppliers, and Caribbean suppliers are being forced to lower prices to meet this competition.”
Lande predicted that CBI parity would happen, possibly as an addition to the implementing legislation for Uruguay Round, though not necessarily as outlined in recent bills introduced by Rep. Sam Gibbons (D., Fla.) or Sen. Bob Graham (D., Fla.).
“The problem is there are so many more important trade issues on the table right now, CBI parity has become a low priority,” he said.
Lande said that any CBI parity measure would require reciprocity, in areas of market access, action against textile transshipment and intellectual property rights.
Larry Martin, director of government relations for the AAMA, also stressed the need for CBI parity, to protect well-established U.S. interest in the Caribbean and Central America.
“We have three times as many members with facilities in the CBI as there are in Mexico and they already are feeling the heat of Mexican competition,” he said.
Martin also outlined the AAMA’s unofficial response to the recent Uruguay Round agreement.
“It opens our borders to expanded imports from every low-wage country in the world, thus reducing the benefit Mexico receives under NAFTA,” he said.
Martin called for U.S. companies with production in Mexico to consolidate their positions to retain market share.
Keynote speaker for the seminar was Rita Hayes, U.S. deputy assistant secretary of commerce for textiles and apparel, who pointed out that the recent trade pacts offer great opportunity for U.S. apparel and textile industries, but only if the U.S.’s trade partners “play by the rules.”
“U.S. textile and apparel have been seen as sunset industries,” said Hayes. “But in reality, they have matured and adapted. Imports have risen, but exports are also rising and will continue to do so, if our partners become more committed to open trade.”
Hayes stressed the administration’s commitment to stopping trade violations.
The problem of illegal transshipping, in which a country such as China uses another’s quota, has become intolerable, she said, and has resulted in the formation of a transshipping task force.
Hayes also discussed the new bilateral with China, which sets quotas on silk apparel for the first time. The effective date for the silk quotas will be discussed with Chinese representatives today and Friday in Washington.
“I’ve been working with retailers and importers, who are concerned that trade will stop March 1, when the agreement goes into effect,” she said. “I’ve assured them that visas and requirements won’t be in place until May. We’re working for an easy transition.”
Hayes said also that, as a result of recent negotiations with India and Pakistan, those countries are expected by March to present a package that would begin to open up market access there.