After losing at least 300,000 jobs since China became a member of the World Trade Organization in 2001, industry executives and mill employees decided they have little to lose in coming together to use the political process to try to save what’s left of the U.S. textile and apparel sector.
“This industry is prepared to work hard on behalf of any candidate that makes an ironclad commitment on maintaining quotas on imports from China,” said Allen Gant, president of Glen Raven Inc. and first vice chairman of the American Textile Manufacturers Institute.
“We are also prepared to work hard against any candidate that will not defend our workers against these illegally subsidized imports. This industry is determined that we will make a difference in the 2004 election.
Gant’s comments came during a press conference in Spartanburg, S.C. in which representatives of several trade organizations used the South Carolina presidential primary to make a case for retaining quotas on Chinese textile and apparel imports.
Those quotas are scheduled to expire next January.
Gant and other speakers pointed out that since the 2000 presidential election, the U.S. textile and apparel sector has lost 323,000 jobs or 31 percent of its work force in 2000. At least 211 textile plants in the United States have also closed their doors.
While textile and apparel imports from other countries have also risen during that time, many textile leaders blame the People’s Republic of China for most of the damage to their industry. Chinese textile and apparel imports to the United States have risen 320 percent since quotas were relaxed as part of China’s accession agreement to the World Trade Organization.
“The results of the decline in production are grim,” said Auggie Tantillo, Washington coordinator for the American Manufacturing Trade Action Coalition, an umbrella organization for trade groups representing industries that have suffered economic decline because of the growth in imports.
“Imported goods have captured all growth during the 1995-2003 time frame,” he said. “Furthermore, imports also have displaced almost 25 percent of previous U.S. production of textiles and 44 percent of previous production of apparel.”
Federal Reserve figures show that U.S. textile mills ended December using only 71.5 percent of their productive capacity, down from 74.8 percent one year ago, said Tantillo. Apparel manufacturers were able to use only 64 percent of their capacity, down from 67.2 percent.
As part of their new political effort, textile industry leaders said they will try to get every textile and fiber worker registered to vote, educate them on the issues and candidates and get them to the polls on Election Day “to elect candidates who will oppose unfair trade practices and support textile manufacturing jobs in this country,” a spokesman said.
“This will be an election where jobs count,” said Jim Chesnutt, chairman of the American Textile Manufacturers Institute. “Workers in this country are sick and tired of seeing the work formerly done in U.S. plants head out the door and over to China. When they discover that the U.S. government is looking the other way while China is illegally subsidizing Chinese textile and other manufacturing exports to this country, they will look to hold some people accountable.
“Our workers want their government to stand up for them, and they will be looking to support only those candidates who will start saving U.S. manufacturing jobs, not backing policies which send them overseas.”
“It is imperative that our industry, including our hundreds and thousands of workers and our suppliers, become politically involved in order to make U.S. trade policy more responsive to our concerns,” said Steve Dobbins, president of the American Yarn Spinners Association.
“We need a trade policy that treats U.S. manufacturers fairly, not as sacrificial lambs.”
While the speakers were clearly concerned about the current level of imports, industry leaders say the losses will pale in comparison to what may happen when all import quotas are removed next January.
On Feb. 9, the U.S. International Trade Commission released a report entitled “Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign Suppliers to the U.S. Market.” The report analyzes the impact of the expiration of U.S. quotas on textile and apparel imports.
“The conclusions to be drawn from the report are clear and devastating,” said AMTAC’s Tantillo. “China will become ‘the supplier of choice’ when quotas on textile and apparel products expire on Jan. 1, 2005 unless the U.S. government comprehensively implements the quota provisions of the special textile China safeguard.”
Tantillo was referring to provisions in China’s WTO accession agreement that allow the United States to limit Chinese imports in product categories that cause excessive job losses in U.S. manufacturing. The Bush administration has agreed to implement the safeguard provisions in three product categories.
China isn’t the only country that may profit from the quota removal at the U.S. textile industry’s expense.
“The report indicates that India and Pakistan will be winners to a lesser extent, while everyone else almost certainly will be a loser, including the 1 million workers in the U.S. textile, apparel, and fiber industries.”
He said textile and apparel products account for a substantial percentage of total merchandise exports from many countries:
Those include: Lesotho, 94 percent; Bangladesh, 86 percent; Haiti, 83 percent; Honduras, 63 percent; Mauritius, 63 percent; Sri Lanka, 61 percent; El Salvador, 60 percent; Dominican Republic, 51 percent; Madagascar, 44 percent; Guatemala, 37 percent; Nicaragua, 37 percent; Turkey, 34 percent; Egypt, 23 percent.
“If these exports collapse, the economies of these countries may collapse as well,” said Tantillo.
He said there is plenty of evidence that China is already becoming the supplier of choice for much of the U.S. retail sector. Recent media reports have said that major U.S. retailers such as Wal-Mart have signed long-term agreements with Chinese firms to supply products at a fraction of the cost they can be produced in the United States.
“China already accounts for more than 19 percent of all U.S. textile and apparel imports and Chinese textile and apparel exports to the United States,” said Tantillo. “Moreover, this explosion has occurred while many of the most sensitive import categories are still under quota. When quotas expire, the damage to the U.S. market caused by this surge of imports will increase exponentially.”
He said the Trade Commission report also proves that the so-called “race to the bottom” to see which manufacturers in Asian countries can pay their workers the least is speeding up.
“In 2002, hourly wages for textile and apparel workers averaged from $0.41 to $0.88 in China, $0.38 to $0.57 in India, and $0.34 to $0.41 in Pakistan,” said Tantillo. “With hundreds of millions still unemployed, prospects of substantial near-term wages increases in these countries are dim.”
The scope of the report did not mandate an assessment of subsidies and tax rebates, legal or illegal, granted by foreign countries to their domestic textile industries, he said. Nor was the report charged with assessing cost disparities in complying with labor, workplace safety and environmental laws between U.S. and foreign firms.
“Foreign companies, especially Chinese companies, exporting to the United States have tremendous cost advantages in these areas,” he said. “These are primary causes of the import surge decimating U.S. textile and apparel manufacturing.”
What is happening to the domestic textile industry is not unique, Tantillo notes. “As evidenced by the expected $540 billion U.S. trade deficit, nearly all of the U.S. manufacturing sector has been targeted for extinction by foreign governments willing to pay any price to capture U.S. market share.”