Textile Lobby Sees Some Positive Signs
NCTO's annual meeting presented a changing trade picture.
By James A. Morrissey, Washington Correspondent
W hile international trade and politics as usual dominated the agenda for the National Council of Textile Organizations (NCTOs) annual meeting in Washington, there were, for a change, some silver linings on the clouds that have been hanging over the industry for years. Even though sales and employment are down, imports continue to grow and the industry experienced a record trade deficit in 2006, some textile industry executives believe the government is responding to their needs, and companies are adjusting to the changing international trade climate. There even is an indication that the rapid growth of Chinese apparel exports to the United States might have a bright side.
One of the most important developments is the governments commitment to monitor textile and apparel trade with Vietnam and take effective action if problems develop. "A year ago at this time, we were deeply concerned about what Vietnams entry into the World Trade Organization was going to mean to us, but we no longer are without a defense against illegal imports," McKissick said. As a non-market economy with major textile and apparel industries, Vietnam was poised to make a major assault on the US market. The Bush administrations commitment to monitor Vietnam imports and self-initiate dumping cases if it is determined that Vietnam imports are entering the United States at unfair prices is viewed by NCTO as a prime example of the industrys effectiveness with Congress.
When Congress was considering legislation granting permanent normal trade relations status to Vietnam, Sens. Elizabeth Dole, R-N.C., and Lindsey Graham, R-S.C., blocked the legislation until the administration could come up with a plan to protect US textile interests. The answer was the monitoring program, which the industry sees, in addition to dealing with Vietnam, as a potential replacement for the China safeguards program that expires Jan. 1, 2009. Although the Department of Commerces (DOCs) data collection is just getting underway, the Washington-based National Retail Federation says it already is having a chilling effect on Vietnamese trade.
More than a dozen bills regarding China trade are before Congress, and a number of hearings already have been held. McKissick said NCTO is strongly supporting the Fair Currency Act sponsored by Reps. Duncan Hunter, R-Calif., and Tim Ryan, D-Ohio, in the House; and Sens. Jim Bunning, R-Ky., and Debbie Stabenow, D-Mich., in the Senate. It would declare currency manipulation an illegal trade practice subject to the anti-subsidy CVD law.
The industrys continuing concern over Chinese imports is underscored by a NCTO report that says China currently has 30 percent of the US apparel market even with quotas remaining on a number of major, sensitive apparel product categories. The report states that when quotas are removed, that figure could rapidly increase.
A presentation at the NCTO meeting by George Stalk Jr. of the Boston Consulting Group shed an interesting light on the surge in Chinese trade. An analysis by that group shows the infrastructure supporting ocean freight is struggling, and "there is a looming shortage, even a crisis, in the infrastructure to move goods from Asia to the United States." This, he said, is creating serious delivery problems for importers. Stalk said necessary new capacity is not being built at major ports and that "every aspect of the supply chain is stretched to the point it is becoming overwhelmed." He said the problem is not confined to ports, but also involves railroads and highways. The result is disruption and delays of deliveries, and some importers may seek sources closer to home. After hearing Stalks report, McKissick remarked, "That is the best bad news I have heard in a long time."