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Washington Outlook

<b>By James A. Morrissey</b>

Washington OutlookBy James A. Morrissey ATMI Suggests New Tactics On Economic WoesThe American Textile Mfrs. Institute (ATMI) floated some new proposals to help address what it sees as the U.S. textile industrys worst economic downturn in 50 years. While continuing to hammer on the Bush Administration to do something about illegal transshipments of textiles and apparel, closed overseas markets and the impact of Asian currency devaluations, ATMI has turned to some little used tactics designed to shore up distressed companies. The institute has suggested that the government might use loan guarantees and tax credits to help companies generate cash they need to remain afloat. ATMI says the administration should ask Congress to make federal loan guarantees available to companies when they seek commercial loans that otherwise would be denied. This would be similar to what was done to help bail out Chrysler, Lockheed and the steel industry. In addition, ATMI suggests that the government might expand the income tax "carryback" for textile companies from the current three years to 10 years. Under this scheme, companies currently losing money could reach back and recover some of the taxes they paid in years when they were profitable. Since the textile industry as a whole suffered its first ever earnings loss in 2000, many companies could under the proposal have several years to draw on taxes paid in profitable years and thereby generate current funds. Both of these proposals would require legislation. Customs Office To Streamline Textile IssuesIn an effort to do a better job of enforcing textile and apparel trade regulations, the U.S. Customs Service created a new division that will deal specifically with textile and apparel issues, under pressure from Congress, textile manufacturers and importers, to do a better job of interpreting laws and enforcing regulations, customs has consolidated its administrative and enforcement operations into one office under the direction of Janet Labuda, a veteran customs official with considerable textile and apparel experience. The TextileandEnforcement Operations Div. will be responsible for monitoring and enforcing quota agreements, investigating fraud and transshipments and administering the complex rules of the NAFTA, the Caribbean Basin and Sub-Sahara Africa free trade pacts, and other trade agreements. Creation of the office has been well-received by both U.S. textile and apparel manufacturers and importers of textiles and apparel, who believe that bringing operations and enforcement people into one office makes sense. They say it should be helpful in clarifying complex and often controversial regulations and communicating policies to importers, exporters and manufacturers. Helms Will Remain Force On Textile IssuesAlthough the U.S. textile industry will lose one of its most effective supporters with the retirement of Sen. Jesse Helms (R-NC) at the conclusion of the current Congress, both his friends and enemies expect him to play a critical role in some major textile issues that Congress and the administration will deal with in the next few months. Charles A. Hayes, ATMI expects Helms "will still be fighting for our industry and our workers until the day the leave office."Erik O. Autor, the National Retail Federations chief lobbyist in Washington, who is anything but a fan of the senator, says Helms, will be a "force to be reckoned with until the next Congress." In spite of the fact that the American ApparelandFootwear Assn. (AAFA) and Helms are generally on opposite sides on international trade issues AAFA officials say they hope they can work constructively with the senator during the remainder of his term, since as a senior senator he will continue to have considerable influence. While Helms was stripped of the chairmanship of the Foreign Relations Committee when control of the Senate switched to the Democrats, he remains the ranking minority member of that committee and is generally recognized as one of the Senates most influential conservatives. With his well-known, and sometimes feared, parliamentary skills, he has a long record of being able to exert considerable influence on both legislation and actions by the administration New Toxic Air Regulation Expected SoonLook for the Environmental Protection Agency (EPA) within the next few weeks to issue a long-awaited proposed regulation covering industrial toxic air emissions. The Maximum Achievable Control Technology standard would set limits on the amount of toxic chemicals a plant may release into the air and require companies to modify their processes or raw material use to meet those limits. The standard could have a significant impact on a number of textile operations. Textile manufacturers have been concerned that the rule, under development for several years, could be expensive and place them at a competitive disadvantage with overseas manufacturers who do not have to comply with similar regulations. As a result, ATMI has been providing tons of information to EPA documenting the use of toxic chemicals by textile manufacturers and what the industry can do to minimize their impact on the environment. ATMI has emphasized the need for manufacturers to be flexible and innovative in meeting the changing demands of customers. They fear that too restrictive a rule could interfere with their ability to develop new products and be cost competitive.October 2001