U.S. textile and apparel manufacturers, once the biggest customers for U.S. cotton farmers, have now given up more than 1 million jobs to cotton and manmade fiber imports from China and other textile and apparel-producing countries.
The American Manufacturing Trade Action Coalition said the U.S. textile and apparel-manufacturing sector lost an estimated 4,700 jobs in May 2007, bringing the total loss for the industry since 1994 — the year the North American Free Trade Agreement was implemented — to more than 1 million jobs.
“The loss of 1 million jobs is an outrage,” said Auggie Tantillo, AMTAC executive director. “It drives home the point that the current U.S. trade policy has failed and must be changed now. An uncontrolled flood of imports, often heavily subsidized, is crippling the U.S. textile industry.”
Despite the loss, nearly 550,000 jobs remain along with tens of billions of dollars in productive capacity, he said. That ability to survive against the onslaught of textile imports shows the U.S. textile industry is still the most competitive in the world.
But U.S. textile mills that once bought 10 million to 11 million bales of U.S. cotton annually are now down to less than half that amount, according to USDS statistics.
“The industry still maintains a large footprint although forced by U.S. trade policy to compete with both hands tied behind our back,” he said. “Analysis shows that the U.S. textile industry would have added more than 400,000 new jobs had this growth in the U.S. market been supplied by domestic production.”
The textile and apparel jobs losses since the NAFTA implementation in 1994 range from a low of 38,900 in California to a high of 193,000 in North Carolina, he said.
Why pick on NAFTA? “While NAFTA alone has caused only a portion of the job losses in the industry since 1994, its implementation was symbolic of a sea change in U.S. trade policy,” Tantillo said. “With NAFTA, the United States either gave free access or lowered barriers to imports of manufactured products from Mexico, a country with an economy less than one-tenth the size of the U.S. economy.”
While Mexico with a population of 102 million in 1994 could undercut U.S. wage rates, its consumers had little ability to buy finished U.S. products in large quantities. Unsurprisingly, he said, the arrangement turned a small U.S. trade surplus with Mexico in 1994 to a $64 billion trade deficit in 2006.
“This model was replicated in the Uruguay Round that led to the formation of the World Trade Organization, China and Vietnam’s accession to the WTO, and free trade agreements like those with Chile, Singapore, Morocco, the CAFTA countries, Peru, Colombia, and Panama,” he said. “In addition, this model is the format for the ongoing negotiations in Doha Round and the recently completed free trade agreement with Korea.
“All of these trade deals have one common thread. They opened the U.S. market to a flood of imported manufactured goods from countries where the U.S. manufacturers, in return, received access to markets (1) where consumers have little ability to purchase finished U.S. goods in substantial quantities, and/or (2) where high tariff and non-tariff barriers remain.”
According to Tantillo, that policy is one of the main reasons why:
• The United States has run a cumulative trade deficit in excess of $5 trillion since 1994;
• The U.S. trade deficit in textiles and apparel has jumped from $28 billion in 1994 to $77 billion in 2006;
• The cumulative U.S. trade deficit in textiles and apparel since 1994 is $659 billion; and,
• The United States has lost 3.2 million manufacturing jobs since 2000.
AMTAC believes Congress has the choice to change course or stay with a failed status quo, he said. “Congress must stop passing the buck and reassert itself in the trade policy arena or U.S. manufacturing will lose millions more of the 14 million jobs that still remain.”
To fix U.S. trade policy and stop massive deficits and manufacturing job losses, AMTAC believes legislation must be passed to:
• Eliminate the disadvantage caused by foreign value-added (VAT) taxes;
• Stop unfair currency misalignment by countries like China;
• Codify the application of countervailing duty (CVD) law to non-market economies like China and Vietnam;
• More rigorously penalize foreign theft of intellectual property.
Congress should also reject the U.S.-Korea Free Trade Agreement and refuse to renew Trade Promotion Authority, Tantillo said.