Textiles Weave A Case For Relief

Dec. 21, 2004

NAFTA exports help keep figures from being worse.

As Congress, the Commerce Dept., and the U.S. International Trade Commission continue to eye imports of steel from Japan, South Korea, Russia, and several other countries for sales at less than fair value, illegal subsidies, and financial harm to domestic producers, U.S. textile makers are clamoring for Washington's attention. Like steelmakers before them, the textile producers are pointing to a surge in imports, specifically to U.S. Commerce Dept. data that show nearly 13.5 billion square meters of textiles and apparel were imported during the first half of this year, 7.9% more than during 1998's first six months. (On a value basis, the import percentage increase was less pronounced, at 5.35% to $31.13 billion.) "Our market is still serving as a life-support system for [economies] like Taiwan, South Korea, the Philippines, and Malaysia," complains Doug Ellis, chairman and CEO of Southern Mills Inc., Atlanta, and president of the Washington-based American Textile Manufacturers Institute (ATMI). "These [economies] are still trying to export their way out of their [financial] difficulties and, to our detriment, the U.S. market is the one they rely on as buyer of first and last resort." What's more, as imports are on the rise, U.S. textile and apparel exports are falling, although not nearly as dramatically. During the first half of 1999, the overall dollar value of U.S. textile and apparel exports declined $11 million (less than 1%) to $8.59 billion, Commerce data reveal. However, by ATMI's calculations, exports to the 15-nation European Union plummeted 24% while exports to Taiwan were off 28.7%, to Hong Kong off 18.3%, and to Japan off 13.8%. Textile's biggest problem is global overcapacity in yarns and fabric. And although there's been recent progress in stopping quota-dodging transshipping through Hong Kong and Macao, it's a situation made worse by foreign subsidies to local producers, misplaced international investment loans, and, in the wake of their recent financial crisis, insufficient structural adjustments in some Far East nations, indicates Carlos F.J. Moore, ATMI's executive vice president. The Committee for the Implementation of Textile Agreements, an interagency panel chaired by the Commerce Dept., has already directed the U.S. Customs Service to deny entry of goods from factories that are illegally transshipping, closed, or unable to verify the origin of their products. But other kinds of relief will not come easily. For example, U.S. textile producers have looked at the possibility of filing antidumping cases, actions that charge foreign manufacturers with sales at less than fair value. "But in our particular industry it is so easy for a country to get around a dumping duty because of the way products are defined," says Moore. The textile makers are considering so-called Section 301 filings, which can seek to counter alleged unfair foreign trade practices with such remedies as import duties and quotas. "Many of these countries hide behind their own tariff and nontariff barriers and keep our products out, and yet they take markets away from us," Moore contends. As dozens of manufacturers in other industries can attest, proving the allegations and then convincing Washington to take strong action is tough. And as China moves closer to membership in the Geneva, Switzerland-based World Trade Organization, ATMI wants to see that country remain under quota controls for 10 years after its admission. This even as quotas with other countries are being phased out. Meanwhile, not all the American textile and apparel trade news is bad. Compared with the first half of 1998, exports from the U.S. to Canada and Mexico, its partners in the nearly six-year-old NAFTA, rose 10.1% -- more than $100 million -- during the first six months of this year, figures ATMI. And U.S. textile and apparel exports to the Caribbean and Central American nations covered by the 16-year-old Caribbean Basin Initiative increased 4.5% -- to $100 million. "If it weren't for NAFTA, our exports would be in much worse shape," says Southern Mills' Ellis. "As long as currency weaknesses persist in Asia and South America and countries like India, Pakistan, and China keep their domestic markets completely closed to our exports, we need our trading partners in the Western Hemisphere to provide us with export opportunities."

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.