Yarn Market Double-Dip

Yarn Market 

Double-DipBy James L. Lemons, Ph.D., Technical Editor The Department of Commerce (DOC)
recently reported that gross domestic product for the first quarter of 2003 increased to 1.6
percent from 1.4 percent for the last quarter of 2002. The results have some analysts predicting
the economy may not slide back into recession. This is quite a contrast from earlier predictions
that the recovery had stalled and the country was headed for a double-dip recession.With mortgage
rates at their lowest levels since the 1960s, housing sales continue to surge. According to the
DOC, consumer spending rose by 0.4 percent, as Americans streamed to the shopping malls. The
Consumer Confidence Index rose to 81.0 in April from 61.4 in March the biggest single-month
increase in more than a decade.The DOC also reported that orders to manufacturers for durable goods
rose by 2 percent in March. However, corporate earnings have been mixed for the first three months
of the year. Although sales and profits arent robust, business is much stronger than anticipated
and seems to be on a path of growth.Where Is The Marker SystemGrant Aldonas, DOC under secretary
for international trade, recently announced the current status of the textile marker system that
has been under study by Oak Ridge National Laboratory. Ultraviolet fluorescent marks, nano- or
microscopic bar codes and DNA-based markers have emerged as the top choices. These three
technologies used individually or in combination could combat attempts to gain duty-free
orquota-free status for imports. The markers would be used by yarn manufacturers to enable the
Bureau of Customs and Border Protection to readily identify the country of origin (See
Textile World News,
TW, this issue).Although quotas end in 2005, tariffs hopefully will still be in place.
Customs would use one of these technologies to specifically identify the yarn manufacturer and
point of origin, thereby collecting tariffs that might otherwise be evaded. The goal is to find the
technology that will be the least expensive for domestic manufacturers and cannot be readily
duplicated by foreign competition.One spinner said, Its great that they are still looking at this,
but when will it finally happen Another executive observed, They still dont have the funding to
complete the research. How many jobs will we lose while they get their act togetherThe 2004 federal
budget begins in October. It is estimated that it will take $1.2 million to complete this project.
If this isnt a good return on the taxpayers dollar, what is Deals Announced With VietnamThe
Bush administration recently announced a bilateral trade agreement to limit Vietnams shipments of
textiles and apparel to the United States. The accord will place quotas on 38 categories of
textile-related imports, and includes provisions that allow US Customs to inspect factories to
verify production and ensure that Vietnam is adhering to international labor standards. This
provision is especially important since accusations have arisen claiming that vast amounts of
Vietnamese-labeled goods are actually transshipments from China. In fact, the American Textile
Manufacturers Institute had pleaded to forestall the agreement until further investigations of the
transshipments could be completed. The American Yarn Spinners Association and others argued
unsuccessfully that the new quotas should be established using 2001 imports as the base, as opposed
to current levels of imports. US trade officials contend the quotas simply bring Vietnam in line
with other developing nations.Now that the deal is cut, American consumers will have access to a
flood of cheap imports. Hopefully, they will realize one thing: More than 58,000 Americans died in
Vietnam and have their names inscribed on the Vietnam War Memorial in Washington. The US Park
Service maintains a separate memorial where names are inscribed for those who did not die in
combat, but died later as a result of the conflict with Vietnam. Hopefully, The American Textile
Industry will not be added to this memorial. 

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June 2003