WASHINGTON — October 11, 2011 — The Fair Currency Coalition praised the U.S. Senate’s passage of S.
1619, the Currency Exchange Rate Oversight Reform Act of 2011, by a bipartisan 63-35 vote early
this evening.  

Hailing passage of S. 1619 as a pro-jobs victory for American business, agriculture and
labor,

the Fair Currency Coalition immediately called upon the U.S. House of Representatives
to follow the Senate’s lead and move currency legislation too.

The Fair Currency Coalition thanked Senate Majority Leader Harry Reid (D-NV) for his
leadership in bringing S. 1619 to a vote. In addition, the Fair Currency Coalition also delivered a
special thanks to Senators Sherrod Brown (D-OH), Charles Schumer (D-NY), Lindsey Graham (R-SC),
Olympia Snowe (R-ME), Debbie Stabenow (D-MI), Jeff Sessions (R-AL), Robert Casey (D-PA), and
Richard Burr (R-NC) for their bipartisan leadership that was so instrumental in winning Senate
passage of the measure.  

China’s ongoing and substantial undervaluation of the renminbi, contrary to its international
obligations, only reinforces the need for prompt House action. While China refuses to honor its
World Trade Organization (WTO) commitments, millions of American jobs lost to subsidized Chinese
competition have gone unrecovered, and the U.S. debt continues to soar. American businesses,
farmers, and workers cannot afford more delay. They need action now by the U.S. government to stop
currency undervaluation.

S. 1619 tackles the currency problem in a pro-jobs, pro-growth, and pro-investment fashion.
It clarifies the responsibility of the U.S. Department of Commerce to investigate alleged currency
subsidies, to establish facts on a case-by-case basis, and to determine the existence and magnitude
of the undervaluation using the same methods as the International Monetary Fund. This is a similar
approach to the bipartisan legislation (H.R. 2378) passed by the U.S. House of Representatives by a
vote of 348 to 79 in the 111th Congress. S. 1619 also addresses the shortcomings in Treasury’s
exchange rate oversight process, a proven failure since 1994.

S. 1619 is WTO-compliant and would provide no grounds for retaliation by any trading
partner.  The bill is a targeted remedy that sends an across-the-board message. 
Enactment of the bill would have a positive impact on the U.S. economy without incurring any new
public debt or significant budgetary expenditures. 

Posted on October 18, 2011

Source: Fair Currency Coalition

ARLINGTON, Va. — October 12, 2011 — The American Apparel & Footwear Association (AAFA) today
applauded the passage of the long-pending free trade agreements with Colombia, Panama, and South
Korea by the U.S. Congress. Also included in a series of trade-related votes was the renewal of the
Generalized System Preferences (GSP), the Andean Trade Preferences Act (ATPA), and Trade Adjustment
Assistance (TAA). All measures now go to President Barack Obama for signature.

“Today’s congressional action reaffirms our competitiveness in the global marketplace,” said
AAFA President and CEO Kevin M. Burke. “The benefits these agreements have for more than four
million U.S. apparel and footwear workers and our consumers is quite clear. By opening these three
important markets to two-way permanent trade flows, we gain access to more than 100 million new
consumers while continuing to deliver quality and affordable product right here at home.”

“I urge President Obama to sign this market-opening legislation as soon as possible so that
we can begin the process of implementing these trade agreements,” Burke said. “The U.S. apparel and
footwear industry will continue working with the Obama Administration and Congress to ensure the
implementation process is seamless.”

Since 2002, U.S. cotton exports to Colombia have more than quintupled while U.S. yarn and
fabric exports to Colombia have doubled. Today, these exports are valued at nearly $300 million.
South Korea is currently the fourth largest market for U.S.-made finished apparel, behind Canada,
the United Kingdom, and Japan. From 2000 to 2010, U.S. apparel exports to Korea have increased five
times over.

Posted on October 18, 2011

Source: AAFA

WASHINGTON — October 12, 2011 — The U.S. textile industry applauded the vote, 63-35, by the U.S.
Senate to enact meaningful job creation legislation through the passage of S. 1619, the Currency
Exchange Rate Oversight Reform Act this evening.

NCTO particularly highlighted the tireless leadership of Senators Sherrod Brown (D-OH),
Lindsey Graham (R-SC), Chuck Schumer (D-NY), Richard Burr (R-NC), Kay Hagan (D-NC), Jeff Sessions
(R-AL) and Debbie Stabenow (D-MI). “These Senators have aggressively and tirelessly pursued changes
to U.S. law that would promote manufacturing in our country and hold countries that violate our
laws to gain an unfair advantage accountable,” stated NCTO President Cass Johnson following the
Senate vote.

NCTO Chairman Bill Jasper, CEO of Unifi Inc, said “Studies have clearly shown that Chinese
currency manipulation is a key factor in the loss of millions of textile and manufacturing jobs in
the United States. By imposing penalties if China continues to unfairly manipulate its currency,
this Act will begin the process of bringing jobs back to our country, increasing our exports and
reviving our economy. We urge the House to move quickly to pass it.”

U.S. textile mills have closed one thousand plants in the U.S. over the past ten years as
Chinese imports of textiles and apparel have increased by $32 billion on 489%. 379,000 textile jobs
have been lost. An NCTO analysis released Tuesday showed that Chinese subsidies give Chinese
textile exporters a 35 to 75 percent advantage in the U.S. market.

New research conducted by four leading economists on “The China Syndrome: Local Labor Market
Effects of Import Competition in the United States” shows that cheap Chinese goods actually create
enormous costs to the overall U.S. economy through increased unemployment benefits, lost tax
revenues and other costs. The Economic Policy Institute also released findings this month: the
Growing U.S. Trade Deficit with China Cost 2.8 Million Jobs Between 2001 and 2010. The study
identified China’s persistent undervaluation of the renminbi (RMB) to the U.S. dollar as a key
cause of the record trade deficits and manufacturing job loss with that country.

Posted on October 18, 2011

Source: NCTO

WASHINGTON — October 12, 2011 — The American Manufacturing Trade Action Coalition (AMTAC) expressed
deep disappointment at the 278 to 151 vote by the U.S. House of Representatives to pass H.R. 3080,
the U.S.-Korea Free Trade Agreement Implementation Act.  

“The Korean FTA is a bad deal for U.S. manufacturing,” said AMTAC Executive Director Auggie
Tantillo.

“A likely decline in textile output almost certainly means the loss of U.S. textile jobs,”
Tantillo added as he noted that the U.S. International Trade Commission admits that U.S. textile
output is expected to decline as a result of the agreement.  

“If the United States wants to create more jobs through trade, we should be negotiating free
trade agreements with countries like Britain, Italy or Germany.  These countries not only have
large populations with the financial capability to buy U.S.-made goods in significant quantities,
but they also have a recent historical track record of not raising non-tariff barriers to buying
U.S. exports,” Tantillo said.   

“Instead, the U.S. government has been negotiating trade deals with low-cost producers in
Asia like Korea and with communist Vietnam as a part of the proposed Trans-Pacific Partnership
(TPP),” Tantillo continued.

“As the high U.S. trade deficit in manufacturing shows, deals like approving China’s
accession to the World Trade Organization, the Korean FTA, and the proposed TPP with Vietnam are
almost all about producing in Asia and selling to the Carolinas or the Midwest rather than the
other way around,” Tantillo pointed out. 

“As U.S. trade deficits with many of our Asian trade partners have skyrocketed in recent
years, it is no coincidence that that the Federal Reserve reported that the “Total Index” of U.S.
industrial production grew by just a measly 1.74 percent between January 2001 and January 2011. In
contrast, U.S. industrial output grew by 50 percent during the decade before,” Tantillo further
elaborated.    

“If Congress were truly serious about creating more American manufacturing jobs and boosting
exports to Asia, it would swiftly pass legislation to discourage Chinese currency manipulation
instead of adopting flawed trade deals,” Tantillo stressed.

“Congressional intervention to stop illegal export subsidies like undervalued currency would
open doors to lucrative markets abroad that have been effectively closed to U.S. manufacturers
thanks to cheating on trade by China and others. In addition, addressing the currency manipulation
problem would help keep China from running roughshod over American manufacturers in the U.S.
market. If American manufacturing were given a level playing field, output and exports would
rise.  That’s what would create more jobs,” Tantillo concluded.  

A letter sent to the U.S. House of Representatives and Senate outlining AMTAC’s reasons for
opposing the Korean FTA is appended below.

AMTAC URGES “NO” VOTE ON KORUS

October 7, 2011

Dear Member of Congress:

The American Manufacturing Trade Action Coalition (AMTAC) urges you to vote NO on the
U.S.-South Korea Free Trade Agreement (KORUS).  The agreement was submitted to Congress on
October 3, and a vote is expected in both the House and Senate on Wednesday, October
12.  

AMTAC strongly opposes KORUS for three main reasons:

  

• the agreement is flawed in concept; 
• the terms of the agreement are unfavorable to key industries such as textiles;  and,
• the textile and apparel provisions in the agreement are unlikely to be adequately
  enforced.

These problems are why as many as an estimated

40,000 U.S. jobs
are expected to be lost in the first seven years after implementation just as a result of
textile concerns with the agreement.

If Congress is serious about creating jobs, passing trade-law enforcement measures like the
stalled anti-currency manipulation legislation, strengthening our “buy American” laws, and
eliminating trade distortions caused by foreign border-adjusted taxes should be targeted instead.

(1) KORUS IS A CONTINUATION OF A JOB-DESTROYING U.S. TRADE POLICY 

KORUS replicates a fatal flaw contained in almost every free trade agreement (FTA) that the
United States has implemented:
our FTA partners can (and do) sell more to us than we to them. During the lifetime or our
existing FTAs, the United States has run a cumulative $2.1 trillion deficit with our free trade
partners. [1]  <#_ftn1> This flaw drives up the U.S. production shortfall manifested in
our trade and current account deficits that have destroyed so many middle-class American
jobs. 

The disparity in market opportunities is immense for several reasons.  South Korea’s
population is less than one-sixth of the United States.  Its GDP of $986.3 billion is less
than 7 percent of the U.S. GDP of $14.6 trillion in 2010.[2] <#_ftn2>  

Despite the South Korean economy’s smaller size, it is an export superpower in many important
industries such as autos, electronics, and textiles. With respect to textiles, South Korean has a
highly sophisticated, vertically integrated industry that is a world-class manufacturer of even the
most technical products. In 2010, South Korea was America’s 8th largest supplier of textiles and
apparel by volume. For just yarns and fabrics, the largest component of the U.S. industry, South
Korea is America’s 2nd largest source of imports.  

In addition, South Korea has a long history of unfair trading practices. Currently, there are
16 antidumping and countervailing duty orders in place against U.S. imports of goods from South
Korea. 

Moreover, despite its obligations under the World Trade Organization (WTO), South Korea has
been hostile to imports. It has raised non-tariff barriers for those goods where there is sizeable
Korean production, autos being the prime example. 

We would also note that while KORUS will give South Korean goods duty-free entry into the
U.S. market, U.S. exports to South Korea will still be subjected to a 10 percent Value Added Tax
(VAT). Through their VAT system, South Korea will be allowed to maintain what amounts to a
permanent 10 percent tariff on U.S. exports to their market. Moreover, South Korea has complete
freedom to raise their VAT rate above the current 10 percent at any point in the future. It was a
major error on the part of our negotiators not to address this inequity as part of KORUS, as border
taxes are another persistent example of foreign practices that place domestic companies at a
competitive disadvantage.

Finally, the agreement is geographically disadvantageous to the United States. South Korea
faces roughly the same logistical challenges as its other Asian competition when it exports to the
United States. In contrast, the United States must ship its exports of manufactured goods several
thousand miles across the Pacific Ocean to a market where our competitors in China and Japan are
right next door. 

The disparity in market opportunity is one reason why the United States ran a $10 billion
trade deficit with South Korea in 2010. Of that total, the U.S. ran a $10.6 billion deficit in
motor vehicles and motor vehicle parts and a $600 million deficit in textiles and apparel. [3]
<#_ftn3>   It is also why the U.S. textile industry and some other sectors expect
few export opportunities for their products under KORUS.

In the face of these unfavorable factors, KORUS will eliminate U.S. tariffs on 95 percent of
current trade in industrial products within three years of implementation of the agreement while
not guaranteeing reciprocal U.S. access to the South Korean market for key industrial products such
as autos and textiles.  

With South Korea’s current capabilities as a major producer and exporter of industrial
products, its close proximity to China, and its traditional hostility to imports, KORUS will hurt
U.S. manufacturers and exacerbate our trade deficit.  

No wonder the Economic Policy Institute predicts the KORUS agreement will increase the total
U.S. trade deficit with South Korea by about $16.7 billion annually and displace approximately
159,000 American jobs within the first seven years after it takes effect. 

(2) KORUS’S TEXTILE CHAPTER HURTS U.S. TEXTILE MANUFACTURERS

The United States International Trade Commission (USITC) estimates that U.S. textile and
apparel output will decline by the largest percentage of any sector as a result of KORUS and cites
expected increases in U.S. imports from South Korea as the driving factor.    

According to the U.S. International Trade Commission’s initial analysis of entering into an
agreement with South Korea, “The largest gains for Korean exports to the United States are
anticipated in textiles, apparel, and leather goods, and other manufacturing (e.g., chemicals and
allied products, electronics, and transportation).”[4] <#_ftn4>  Various studies cited
in the 2007 USITC report on KORUS uniformly predict declines in U.S. textile and apparel output
ranging from 0.4 to 1.5 percent.[5] <#_ftn5> 

AMTAC estimates that 9,300 to 12,300 U.S. textile and apparel manufacturing jobs are expected
to be lost in the first seven years after implementation as result of flaws in the textile chapter
of KORUS. Moreover, because U.S. government figures show that approximately three additional jobs
are lost to the U.S. economy for each textile job that is eliminated, the total estimated job loss
climbs to nearly 40,000. It is also important to note that these figures do not account for job
losses as a result of a likely surge in illegal Chinese transshipments via South Korea, which we
expect to be significant.

One highly sensitive market where South Korea competes head-to-head with U.S. producers in
the U.S. market is in industrial textiles, a sector with employment of more than
25,000.  

U.S. industrial textile manufacturers are particularly concerned about this agreement and its
impact on the extended domestic supply chain for coated and laminated membranes used in industrial
and military applications such as fuel cells, oil booms, rapidly deployable shelters/tents, radar
attenuating covers, safety and protective gear, and many more advanced applications, including
automotive fabrics. Many companies participating in this supply chain also support the military
needs of our warfighters. Their ability to innovate and responsively supply the military is
dependent on an overall healthy domestic market and industry.

Our principal concerns with the text include (1) accelerated tariff phase-outs that do not
give U.S. producers time to adjust, (2) non-reciprocal tariff phase-outs that favor the South
Korean textile industry in key products, and (3) exclusion of certain textile components from the
rule of origin.

The aforementioned reasons and others are why, as the auto provisions of KORUS were being
reopened, AMTAC and other industry associations made a request to the Obama administration in
August 2010 that they also reopen the textile and apparel chapter of the agreement to fix the
problems therein.  Textile concerns, however, were never raised with South Korea and these
damaging provisions remain unchanged.

Problematic Accelerated Tariff Phase-Outs

Contrary to the precedent established in the NAFTA, 86 percent of textile and apparel product
lines are duty free immediately under KORUS and an additional 10 percent will be duty free on
January 1 of Year 5 of the agreement. This is the first time a large number of sensitive products
from a country with a large, sophisticated textile industry have received immediate access to the
U.S. market. Tariff phase-outs for sensitive products have traditionally been a key part of trade
agreements in order to give companies time to adjust business models and minimize large-scale
potential job displacement. For example, South Korea exports of polyester fiberfill have entered
the United States under anti-dumping orders for the past 15 years. This dumping case passed two
sunset reviews, the last of which was successfully completed prior to the end of the KORUS
negotiations. Nevertheless, KORUS immediately removes the U.S. duty on polyester fiberfill,
defeating the purpose of the anti-dumping rule and defying logic of equitable trade negotiations.

In the U.S. technical textile market, South Korea has emerged as the number one exporter of
advanced textile reinforcements, and this sensitive tariff line is scheduled for immediate tariff
phase out.  U.S. industrial textile producers have already lost significant market share to
South Korean manufacturers, and this FTA will do significant harm to the industrial textile
industry and greatly diminish the sustainability of our fragile domestic supply base.

Socks are another sensitive product where most tariff lines go to zero immediately. South
Korea was the 6th largest exporter of socks to the United States in 2010 by volume, shipping more
than 152 million pair.

Non-Reciprocal Tariff Phase-Outs

The agreement also provides South Korea with a more generous and expedited tariff elimination
schedule than what is afforded U.S. producers and exporters for certain products. One example is
para-aramid fiber, which is used to produce tough, flame-retardant fabrics for industrial and
military applications including body armor. Under KORUS, South Korea will be allowed to export
aramids to the United States with immediate duty free treatment. U.S. producers do not get duty
free access to the Korean market as South Korea is allowed to phase out its tariff to be duty free
on January 1 of Year 5.  This puts U.S. manufacturers at a direct disadvantage.

Job-Destroying Loopholes in Rule-of-Origin

The rule of origin is a critical element of any free trade agreement because it defines which
products qualify for preferential treatment and whether countries not party to the agreement will
receive benefits. The KORUS contains a “yarn forward” rule of origin. While we support a basic yarn
forward rule, certain specific exemptions to the product origin rules under KORUS are very
problematic.  

In essence, the rule applies only to the component that determines the tariff classification
of the apparel or home furnishing good (in other words, the main or essential fabric) plus certain
visible lining fabrics. Applying origin rules in this manner means that key component yarns,
threads and fabrics are not adequately covered under the rule of origin and therefore do not have
to be of U.S. or South Korean origin. This conflicts with the majority of our recent agreements
including CAFTA-DR, Peru, Colombia and Panama which apply the yarn forward rule beyond just the
essential character fabric.  

Under KORUS, components including sewing thread, pocketing and narrow fabrics, all of which
are in plentiful supply from U.S. producers, are allowed to come from anywhere. This allows third
parties, such as China, to benefit without making any market concessions of their own. Domestic
producers of these types of component yarns and fabrics provide thousands of U.S. jobs, which will
be put into jeopardy if KORUS is implemented.  

(3) HIGH LIKELIHOOD OF MASSIVE CUSTOMS FRAUD DUE TO INADEQUATE ENFORCEMENT
PROVISONS

In addition to the flaws in the textile chapter of KORUS, there is strong evidence that
Customs’ ability to enforce this agreement will be ineffective. 

Due to South Korea’s history of transshipment paired with significant cross-border investment
with China, upgraded customs enforcement provisions are essential to prevent large-scale customs
fraud under KORUS.  China already exports nearly $4 billion annually in textiles and apparel
to South Korea, and South Korea was labeled by U.S. Customs as a major transshipment point for
Chinese exporters when quotas were in place.[6] <#_ftn6> 

Instead of strengthening enforcement, however, the customs language in KORUS was
significantly weakened compared to other high risk agreements such as the Singapore
FTA.  

Key enforcement provisions that were dropped under KORUS include the ability for U.S. Customs
to (1) seize goods from repeat offenders, (2) reduce South Korea’s access if it does not enforce
the rules of the agreement, and (3) deny fraudulent companies import privileges for several
years. 

The substandard customs provisions in the KORUS leave the U.S. textile industry and its
workers vulnerable to large-scale illegal imports from China through South Korea.  As a
result, the industry fully expects Chinese textile exporters to be a primary beneficiary of KORUS.

In addition to its direct threat to the U.S. market, the specter of increased illegal
transshipments likely to be generated by KORUS represents a significant attack on the hemispheric
textile production structure encouraged by U.S. policy for the past three decades.  

The KORUS threatens to damage the Western Hemisphere because South Korea’s textile and
apparel exports are expected to surge and displace orders currently being sourced in the
region.  When finished product orders are lost by manufacturers in the Western Hemisphere,
U.S. mills also lose the orders for the yarns and fabrics that go into garments and made-up
articles.  

The potential loss of business is enormous. As a result of trade preference programs and the
NAFTA/ CAFTA/Peru FTAs, nearly two million textile and apparel workers in those regions produce
garments, home furnishings, and the textile components incorporated into those products.  The
U.S. textile and apparel industry is a critical link in the supply chain. We export more than $12
billion a year to our preferential partners in the Western Hemisphere, predominantly in components
such as yarns, threads, and fabrics.  This trade accounts for more than 60 percent of total
U.S. textile and apparel exports.

CONCLUSION

AMTAC urges Members of Congress to vote NO on KORUS
due to the expedited tariff reductions, lack of reciprocity in certain key product areas
and overall negative impact on U.S. companies and jobs.  Congress should prioritize fixing
U.S. trade policy, stopping manufacturing job loss, and closing the trade deficit before
considering any new trade deals including KORUS.

Thank you for your consideration in this matter.  If you have any questions, please do
not hesitate to contact us. 

Sincerely,

Auggie Tantillo

Executive Director

American Manufacturing Trade Action Coalition

[1] <#_ftnref1> Trade deficit figures calculated from U.S. International Trade
Commission statistics for Domestic Exports FAS minus Imports for Consumption Value.

[2] <#_ftnref2>  CIA World Factbook.  Official Exchange Rate GDP.

[3] <#_ftnref3>  U.S. International Trade Commission, DATAWEB.  Total Exports
minus General Imports for All Commodities, DOC Automotive HTS10 List, and Textiles and Apparel HTS
Chapters 50-63.

[4] <#_ftnref4>  http://www.usitc.gov/publications/docs/pubs/332/pub3452.pdf

[5] <#_ftnref5>  http://www.usitc.gov/publications/pub3949.pdf

[6] <#_ftnref6>  CBP (July 10, 2008).  “CBP Charges More Than 1,000
Containers of Illegal Textile Shipments to China’s Quota Levels.”  Press release.
http://www.cbp.gov/xp/cgov/newsroom/news_releases/archives/2008_news_releases/july_2008/07102008_3.xml

Posted on October 18, 2011

Source: AMTAC

WASHINGTON — October 13, 2011 — The U.S. specialty fabrics industry, one of the thriving textile
sectors in the U.S., took a direct hit yesterday when the House and Senate majority voted in favor
of the Korea-U.S. free trade agreement (KORUS).

Under the win/lose terms of KORUS, South Korean goods will immediately enjoy duty-free entry
into the U.S. market; but U.S. exports to South Korea will still be subjected to a 10 percent Value
Added Tax (VAT). Through its VAT system, South Korea will be allowed to maintain what amounts to a
permanent 10 percent tariff on U.S. exports to their market.

Moreover, South Korea has complete freedom to raise its VAT rate above the current 10 percent
at any point in the future. According to Ruth Stephens, Executive Director of the United States
Industrial Fabrics Institute (USIFI), “It was a major error on the part of U.S. negotiators not to
address this inequity as part of KORUS, as border taxes are a persistent example of foreign
practices that place domestic companies at a competitive disadvantage.”

USIFI is a division of the Industrial Fabrics Association International, a trade group with
over 1,800 member companies which has represented the U.S. specialty fabrics industry for nearly
100 years. The world market for specialty fabrics is estimated at $126 billion in 2011–$29 billion
of that in the U.S. In fact, this is one segment of the domestic textile manufacturing base which
now thrives thanks to continuous technical innovation.

USIFI commended the 151 House of Representative Members and 15 Senators who understood the
serious disadvantage to U.S. manufacturing and voted “no” on the U.S.-Korea Free Trade Agreement
(KORUS) last night, Oct. 12, 2011. Both bodies of Congress ratified the agreement; the House vote
was 278 to 151 and the Senate vote was 83 to 15.

Unfortunately, says Stephens, no one is looking at the free trade agreement results data. The
claim that enormous numbers of U.S. jobs will be created by the passage of this agreement is
unfounded, based on government results data collected since past trade agreements such as NAFTA and
CAFTA were implemented. Free trade partners can (and do) sell more to the U.S. than vice versa.
During the lifetime of the country’s existing free trade agreements the U.S. has run a cumulative
$2.1 trillion deficit with our free trade partners.

According to Stephens, “The specialty fabrics industry is particularly concerned because
Korea has a very sophisticated, vertically integrated industrial textile industry, recently
receiving massive government financial support to build extra manufacturing capacity.”

The impacts of KORUS on the extended domestic supply chain for coated and laminated membranes
used in industrial and military applications such as fuel cells, oil booms, rapidly deployable
shelters/tents, radar attenuating covers, safety and protective gear, and many more advanced
applications, including automotive fabrics are expected to be extensive.

Stephens warns that many companies participating in this supply chain also support the
military needs of our warfighters. Their ability to innovate and responsively supply the military
is dependent on an overall healthy domestic market and industry.

“A likely decline in U.S. textile output because of increased Korean market penetration
almost certainly means the loss of U.S. textile jobs,” she says. “Textile job skill sets are not
easily transferred to segments such as agriculture which might see a slight gain because of the
agreement.”

Stephens also notes that the U.S. International Trade Commission admits that U.S. textile
production is expected to decline as a result of the KORUS agreement. USIFI and other industry
associations predict that more than 10,000 U.S. textile and apparel manufacturing jobs will be lost
in the first seven years after implementation as result of flaws in the textile chapter of KORUS.

Because U.S. government figures show that approximately three additional jobs are lost to the
U.S. economy for each textile job that is eliminated, the total estimated job loss climbs to nearly
40,000. It is also important to note that these figures do not account for job losses as a result
of a likely surge in illegal Chinese transshipments via South Korea, which are expected to be
significant.

Specialty fabrics is a segment of the domestic textile manufacturing base that has not only
survived decades of bad trade policies and relentless import pressures but which, though continuous
technical innovation, has grown and competed in the world marketplace–until now.

Says Stephens, “Until we address the issue of border taxes (VATs), we will never have true
free trade….every other major country in the world uses border adjusted taxes, usually in concert
with duty rates (as the duty revenue goes down, the VAT goes up to compensate). As one of our
members says, ‘We’re playing checkers, and everyone else is playing chess.”

Posted on October 18, 2011

Source: USIFI

BOSTON — October 13, 2011 — Last evening the U.S. House voted (Roll Call Vote 782), 300 to 129, and
the U.S. Senate voted (Call Vote 162), 77 to 22 to implement the United States-Panama Free Trade
Agreement (H.R.3079).

The rule of origin for fabric is yarn forward. The rule of origin for apparel is yarn forward
for the single fabric component that determines the tariff classification of the garment. Certain
visible linings, narrow elastic fabrics, pocketing and sewing thread must also originate under
rules modeled after those of the U.S.-Dominican Republic-Central America Free Trade Agreement
(“DR-CAFTA”). Please note that a drafting error in DR-CAFTA which exempted many sewing threads from
the rule was replicated in the Panama FTA. In the case of DR-CAFTA the the U.S. and DR-CAFTA
partners have agreed to modify the sewing thread rule to cover all types of sewing thread; this
change has not yet been implemented. It is our understanding that any change to the rule in the
Panama FTA would also require negotiations between the U.S. and Panama to modify the Agreement.

Like DR-CAFTA, the Panama FTA has a single transformation rule for brassieres, woven boxers,
and woven sleep/nightwear.

Posted on October 18, 2011

Source: NTA

WASHINGTON — October 13, 2011 — The National Council of Textile Organizations (NCTO) thanked the 52
members of Congress, who accounted for one third of the overall opposition to the bill, for putting
textile workers first and voting “NO” on the Korea FTA. Two-thirds of the House Textile Caucus – 44
members – voted against the bill and were joined by eight other members with textile interests.

“The resounding “NO” vote from representatives with textile workers in their districts is
greatly appreciated by the textile industry and their workers. We want to particularly thank
Congressmen Larry Kissell (D-NC) and Howard Coble (R-NC), the chairs of the House Textile Caucus
for leading this effort,” said Cass Johnson, President, NCTO. “In addition NCTO would like to
recognize the leadership of Congressmen Walter Jones (R-NC) and Mike Michaud (D-ME) in opposing
this poorly negotiated agreement.”

U.S. textile workers delivered nearly 27,000 petitions to their Members of Congress urging
them to vote “No” on the U.S.-Korea FTA.

The textile industry opposed the Korea FTA because critical enforcement measures were removed
from the agreement, creating an easy gateway for low priced Chinese goods to be illegally
transshipped through Korea. U.S. Customs experts have warned the Administration and Congress that
billions of dollars of illegal Chinese goods would flow through Korea if the enforcement provisions
in the agreement were not fixed. In addition, the Korea FTA phased out duties on many sensitive
textile products that are important products for U.S. producers and our trading partners in NAFTA,
CAFTA, and Andean regions. The phase out schedule provided Korean exporters with greater access to
U.S. markets while U.S. textile companies must wait years for equal access into the Korean market.
This included products that the textile industry supplies to the U.S. military.

“The industry is particularly heartened because both the Administration and the Republican
leadership supported the bill and yet so many members chose to side with saving textile jobs and
textile production in their districts and around the country. Their dedication to the industry
sends a strong message that the textile enforcement and market access rules in the Trans Pacific
Partnership (TPP) must strengthened and cannot be a copy cat of the flawed Korean text,” Johnson
added.

Johnson noted the U.S. textile industry has been growing jobs and exports, with four new
plants opened in the last year and half, exports up 17 percent and nearly 4,000 new jobs added. “We
want to ensure that free trade agreements actually support increasing exports and increasing
textile jobs in this country. We will strongly support agreements that provide an equal playing
field for the beneficiary country, but will strongly oppose those that don’t.”

Regarding the problem of textile customs fraud, Johnson also noted that textile supporters in
the House and Senate have reintroduced the Textile Enforcement and Security Act (TESA). He said,
“The Korea textile debate has highlighted that weak customs rules and declining resources and focus
in textile enforcement by Customs and Border Protection is unacceptable. The TESA bill contains
many elements which will help to stop the growing problem of textile fraud, which costs thousands
of U.S. jobs and deprives the U.S. Treasury of precious revenue. The industry looks forward to
working with Congress to make sure this bill is passed during the current session.”

Johnson concluded, “The industry is also gratified that members from textile districts
strongly supported the Colombia FTA. The Colombia FTA contained none of the errors that were
included in the Korea FTA and its passage will help to restore a thriving export business in
textile products from the United States.”

Posted on October 18, 2011

Source: NCTO

GASTONIA, N.C. — October 15, 2011 — Gastonia, NC based RadiciSpandex Corporation has announced a
reduction in operations at its two facilities.

The company manufactures spandex yarn at its facility in Tuscaloosa, AL and provides
finishing and distribution at its distribution center in Gastonia, NC. The company has given 60
days WARN notice to its employees in Alabama and has advised employees in Gastonia of the
likelihood of reductions in personnel over the next several months. The exact length of the
reduction in operations is unknown at this time so the company is notifying its employees and
providing the WARN notice The actual timing of the operation reduction at both facilities will
depend on business conditions and other business planning now underway.

“The spandex market has been difficult the past several months with an oversupply of spandex
in the global market driving prices down at the same time raw material prices have increased over
25%” said CEO Marty Moran. “These conditions look to continue for the foreseeable future and
RadiciSpandex has made the decision to reduce operations to control the losses the company is
suffering. The company intends to work with its employees, customers, and suppliers for an orderly
reduction of operations while the company pursues alternative modes of business operations. The
company is following market conditions to determine if US production can be restarted.”



Posted on October 18, 2011

Source: RadiciSpandex Corp.

MINNEAPOLIS — October 13, 2011 — Zepol Corporation, the leading trade intelligence company, reports
that U.S. import shipment volume for September, measured in TEUs, decreased 6.73% from August and
showed a similar decrease of 4.52% from September of 2010. The total number of shipments also
decreased almost 9% from August while also showing a decrease of 2.31% from September of 2010. Year
to date, total TEUs are up 1.44% this year over last year.

Key Statistics from this Month’s Update:

1. Incoming shipments from both Asia and Europe show decreases of 8.75% and 15.74%,
respectively, for September. Despite an 18% increase of shipments two months previously in August,
Taiwan recorded a decrease of almost 20% in September. Japan also showed a decrease in shipments of
over 12% in September after a similar increase in August. When comparing incoming shipments from
Europe, 11 of the top 15 countries recorded decreases in September, with the largest decrease
occurring in Greece.

2. Several of the U.S. ports showed decreases in incoming TEUs for September, including the
Pacific and Mid Atlantic ports with nearly 9% and 12% decreases, respectively. Los Angeles and San
Francisco each displayed decreases of 9% and 11.37% last month. Together, the states of New York
and New Jersey accounted for 13.38% of the Mid Atlantic ports decrease.

3. Apl Co. maintains their number two carrier position, behind Maersk Line, despite a 7.60%
decrease in TEUs for September. They are not alone, however, as nine out of the top 10 carriers
experienced similar decreases, the highest with Nippon Yusen Kaisha. Of the top 10, Hanjin Shipping
Company had the sole increase in TEUs of just 0.64% for the month of
September.    

Methodology:

Zepol’s data is derived from Bills of Lading entered into the Automated Manifest System. This
information represents the number of House manifests entered by importers of waterborne
containerized goods. This is the earliest indicator for trade data available for the previous
month’s import activity. The data excludes shipments from empty containers, excludes shipments
labeled as freight remaining on board, and may contain other data anomalies.



Posted on October 14, 2011

Source: Zepol Corp.