- The Washington Times - Monday, May 9, 2005

A U.S. textile industry group yesterday said it would support the Central American Free Trade Agreement, a swing in support from companies that had been skeptical of the pact.

The National Council of Textile Organizations (NCTO) backed the deal after the Bush administration addressed its most pressing concerns, but other companies that spin yarn, weave fabric and sew clothes remain opposed to CAFTA.

CAFTA, also known as DR-CAFTA, would lower trade barriers and secure investor rights for companies in the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the United States.

The Bush administration faces an uphill fight to win approval for the pact in Congress, which can only approve or defeat it with a yes-or-no vote.

“NCTO has taken a bold step in seizing the opportunity that this agreement provides to an industry that needs a boost,” said Rob Portman, the U.S. trade representative.

Textile mill products are the leading U.S. export to the six CAFTA countries, reaching $2.6 billion in 2004, the Commerce Department said. The American fabric is cut and sewn into garments and household products in the Latin nations, then returned to the United States for sale to American consumers.

“NCTO recognizes the strong and important ties between the domestic industry and the DR-CAFTA countries,” said Allen Gant, NCTO chairman and president of Glen Raven, a North Carolina fabric manufacturer.

The administration says CAFTA will strengthen the commercial relationship in the face of rising Chinese competition, but many in the industry are concerned that some provisions open a back door for China to enter the market.

“This flawed agreement, if passed, will bring yet more job losses to the American textile industry,” said Karl Spilhaus, president of the National Textile Association.

Textile and apparel industries lost 16,600 jobs in the first four months of the year, and now employ 666,500 nationwide.

NCTO had been undecided on CAFTA, but the administration in a letter to Sen. Elizabeth Dole, North Carolina Republican, last week pledged that it would try to close a loophole that allows some non-U.S. fabrics to be sewn into Central American exports. The administration also agreed to step up Customs enforcement so that non-U.S. fabric is not illegally shipped through Central America to the United States.

It is not clear if NCTO’s endorsement means more votes for CAFTA in Congress. Mrs. Dole yesterday had not taken a position on the pact, and House lawmakers have been especially critical of the deal because of concerns related to workers’ rights, potential new sugar imports and textiles.

Rep. Howard Coble, North Carolina Republican and co-chairman of the informal Congressional Textile Caucus, had opposed the pact.

“As of right now we haven’t changed,” said Ed McDonald, Mr. Coble’s spokesman. “But, as we’ve said, he’s willing to discuss it with folks.”

Mr. Coble yesterday was scheduled to meet with Mr. Gant.

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