Industry And Labor Oppose Poor Nations Trade Bill

Textile industry and labor leaders have sharply attacked legislation introduced in Congress last
week that would extend liberalized trade benefits to some of the world’s poorest nations, saying it
would undermine existing preferential agreements with African and Central American nations and cost
thousands of US jobs. The New Partnership and Development Act, introduced by Rep. Jim McDermott,
D-Wash., and seven co-sponsors, would grant duty-free and tariff-free access to the United States
for products from as many as 50 under-developed nations.

Sponsors of the legislation and importers say it will help reduce global poverty and result
in more stability for trade from African nations. In endorsing the legislation, Kevin Burke,
president and CEO of the American Apparel and Footwear Association, criticized what he said is a
current “patchwork of agreements” with African nations that have conflicting rules of origin,
uneven product and country coverage and expiration dates. He said the new bill would result in “
long needed consistency and certainty” for suppliers of textiles and clothing and stimulate
stronger trading partnerships and opportunities in the developing world. One of the co-sponsors of
the bill, Rep. Phil English, R-Pa., said: “This initiative benefits extremely under-developed
communities by promoting trade with the United States in the context of internationally recognized
labor rights. It is a potential milestone in making trade with the developing world mutually
beneficial and a vehicle for reducing global poverty and creating growth and opportunities for
nations that have been left out of the benefits of global trading.”

US textile manufacturers and labor groups see the legislation in an entirely different light.
Cass Johnson, president of the National Council of Textile Organizations, said that while the goals
of the legislation are laudable, it gives “enormous new benefits to countries that are already
export superstars while handing Wal-Mart and other big importers a $1 billion annual tax credit.”
He added that this price tag is too high.

US textile interests are particularly concerned about additional benefits that would be
granted to Bangladesh and Cambodia, which already are the second- and eighth-largest sources by
volume for US apparel imports. They also are concerned about transshipments from China, because
China shipped $2 billion in textile and apparel components to Bangladesh and Cambodia last year.
Auggie Tantillo, executive director of the American Manufacturing Trade Coalition, said: “
Bangladesh and Cambodia may be less developed countries by per capita income, but they are global
super powers in terms of apparel exports. With exports so large in those products, tariff
eliminations are unwarranted and will serve as just another giveaway of US market share to China.”

Bruce Raynor, general president of the textile union UNITE HERE, said it is “disheartening
and frankly confusing” that the first major trade bill introduced by the Democrats would end up
costing tens of thousands of US manufacturing jobs. He said the bill is a disappointment to those
who had hoped a Democratic Congress would reverse what he says is a “ disastrous trend of exploding
trade deficits and the off shoring of critical middle class jobs.”

In addition to granting duty-free and quota-free treatment to imports from the participating
countries, the bill authorizes the US government to provide $5 billion for capacity building and
infrastructure development.

The bill takes into consideration possible problems with imports from Bangladesh and Cambodia
by setting a cap at the 2007 levels if their products compete with products made in the African
countries that are covered by the African Growth and Opportunity Act. It also requires countries
that would be eligible for the preferential treatment to maintain their laws and regulations and
core labor rights as defined by the International Labor Organization.

October 23, 2007