WASHINGTON — Retailers and importers went up against domestic manufacturers of textiles and apparel Wednesday on the tariff and quota phaseout details being crafted in the implementing legislation for the GATT Uruguay Round treaty.
In testimony before the House Trade Subcommittee, industry representatives agreed on the importance of ongoing market opening negotiations, but differed on the details of the 10-year phaseout of the MultiFiber Arrangement and penalties to be levied against countries that don’t open their markets to U.S. exports.
With work just beginning in the House on drafting the implementing legislation, industries don’t want to miss an opportunity to influence the agreement that will liberalize world trade.
“We have an agreement that, while not perfect, at least provides a road map for integrating textiles and apparel trade into world trade disciplines,” said Julia Hughes, chairman of the U.S. Association of Importers of Textiles and Apparel.
In addition to Hughes, those testifying included Robert Hall, vice president and government affairs counsel for the National Retail Federation; Larry Martin, government relations director for the American Apparel Manufacturers Association; Carlos Moore, executive vice president of the American Textile Manufacturers Institute, and Arthur Gundersheim, international trade director for the Amalgamated Clothing and Textile Workers Union.
Moore of ATMI reiterated the industry’s disappointment in the failure to attain a 15-year phaseout of the MFA. The phaseout will result in textile and apparel imports increasing by about 150 percent over the agreed-upon 10-year period, Moore said.
“There is little doubt that the MFA phaseout will cause the loss of hundreds of thousands of U.S. textile and apparel jobs,” Moore said. “We believe these job losses can be lessened to some degree if other countries open their markets.”
The U.S. should send strong signals now, Moore said, to India and other countries that restrict import of U.S.-made textiles that they will not see quotas liberalized if they don’t open their markets.
AAMA’s Martin agreed and said the “failure to achieve real market access in apparel is a major failure of the round.”
The agreed-upon penalty to limit quota growth for countries that don’t open their markets to U.S. exports is inadequate, Martin said. The limitations are not severe enough to motivate countries to open their markets to U.S. goods.
On the other hand, said Hughes, speaking for the importers, and Hall, representing retailers, the penalty was inappropriate.
Domestic manufacturers also disagreed with retailers and importers on the proposed procedures for bringing textiles under GATT rules and phasing out the MFA. Martin and Moore said they wanted the procedures to stay as they are in the treaty. Under the pact, decisions as to what products are to be liberalized will be made in three stages. Hughes said importers preferred to see integration decisions made at the beginning of the 10-year transition, and not in stages. Hughes and Hall also recommended that procedures for implementing the Uruguay Round integration be open to review and with consultation from all industrial segments affected.
“The industry is beginning the transition toward integrating textiles and apparel into the usual trade procedures and in 10 years there will no longer be special rules for textiles,” Hughes said. “We believe it is important to begin now to move the decision-making process into the sunshine…We accept that a period of adjustment is necessary, but we do not want this adjustment period to result in the unproductive wrangles we have had in the past, both internally and abroad.”
Martin also argued that because GATT will open the U.S. to “expanded imports from every low-wage country in the world,” Congress should extend North American Free Trade Agreements benefits to Caribbean Basin Initiative countries, where U.S. makers have close working relationships.
Already the AAMA is seeing that CBI investment is being postponed and customers are demanding the same price reduction on goods from the CBI as they are receiving on Mexican goods, he said.
Gundersheim of the ACTWU said the implementing legislation should include labor standards that prohibit child labor and insure safe working conditions. He also said U.S. companies should have a code of conduct for sourcing and selecting business partners abroad. Congress, he said, should mandate that business enacts principles similar to those used by Levi Strauss & Co., which selects suppliers on the basis of their environmental, ethical, health and safety standards.