- The Washington Times - Monday, July 7, 2003

The U.S. clothing and fabric industries, under intense pressure from rising imports, are demanding that President Bush quickly and unilaterally throw up barriers to products from China.

“If the administration does not act beginning in mid-2004, a new, enormous wave of plant closures and worker layoffs is certain to occur in the country’s major textile areas … as orders for yarns, fabrics, home furnishing products and apparel are diverted to China,” textile industry groups wrote to Mr. Bush yesterday.

The letter, signed by 14 trade groups that represent manufacturers of about three-quarters of the textiles and fibers produced in the United States, intensifies the lobbying effort by firms worried that they will be put out of business by Chinese competitors.

“It’s a concern of the industry, therefore, it’s a concern of ours,” said a U.S. trade official, who asked not to be named. The administration is reviewing the letter, but it is “premature to say how we will respond,” the official added.

The letter’s timing and reference to next year make clear that textile and apparel firms plan to make trade an election issue.

Clothing and fabric exports to the United States are limited by quotas. But the quotas, phased out over 10 years as part of a global trade agreement, are scheduled to end next year, a move that U.S. manufacturers say will deliver as much as two-thirds of the market to firms from China.

In the meantime, American textile and apparel companies have shed jobs — 271,100 since the start of 2001, about 26 percent of the work force, according to government and industry figures.

“I think China is probably directly responsible for 900 people losing their jobs here,” said Jim Chesnutt, president of National Spinning Co., a Washington, N.C.-based firm of about 1,200 workers that spins yarn for sweaters.

“Our customers have been worn out by China,” said Mr. Chesnutt, who also is vice chairman of the American Textile Manufacturers Institute, one of the groups that sent the letter to Mr. Bush.

The trade groups encouraged actions taken by the Bush administration, including efforts to make China float its currency. U.S. manufacturers contend that an undervalued yuan gives Chinese firms an unfair advantage.

But they also want the Bush administration to effectively block some textiles and apparel from China, which last year sent $12.8 billion in fabric, fiber and clothes to the United States, and to limit concessions in future trade agreements.

The United States agreed to phase out textile and apparel quotas when the World Trade Organization was created. But it won the right to protect its clothing and fabric industry from China as a condition for the communist-run country to join the WTO.

The U.S. government can safeguard some product lines on its own, or as a response to an industry petition.

“We’re reviewing the industry’s request. It would help if the industry would file a safeguard petition,” the U.S. trade official said, indicating that a formal claim from firms or trade groups would contain data to help us evaluate and defend any action taken by the administration.

The U.S. manufacturers asked the president to initiate the safeguards, but barring that said they would petition for protection.

“U.S. textile producers have been inspired by the safeguards given steel, so they’re looking for protection,” said Dan Ikenson, a trade policy analyst at the Cato Institute, a Washington-based think tank that favors free trade.

Last year, Mr. Bush slapped tariffs up to 30 percent on some steel imports, in part to shore up political support in a handful of states.

But Mr. Ikenson said that China is not an immediate threat to the market because of the potential safeguards and special arrangements that grant countries in Africa, the Caribbean and Latin America access to the U.S. market as long as they use U.S.-made components.

He also criticized the protectionist measures as piling on costs for people who can least afford clothing.

But he conceded that the Bush administration faces difficult choices.

“I think they [textile firms] are just getting warmed up here. They want to try to capitalize on the fact that next year is an election year,” he said.

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