U.S. textile and apparel manufacturers will play a key role in helping Haiti’s recovery from the
January earthquake that shattered that nation’s economy under legislation that has been introduced
in both the House and Senate providing for extended and expanded trade preference programs covering
textile and apparel trade. Because the legislation was introduced by the chairmen and ranking
members of the House Ways and Means and Senate Finance Committees, it likely will receive quick
consideration and enactment.

The legislation, called the Haiti Economic Lift Program (HELP), extends the expiration date
for two existing trade preference programs and expands their coverage for duty-free entry of
apparel. U.S. importers of apparel have strongly endorsed the legislation, and textile makers will
not oppose it, although they have some lingering concerns over the legislation’s impact on U.S.
jobs.

Ways and Means Committee Chairman Sander Levin, D-Mich., said: “This legislation provides
important incentives to expand trade and investment in Haiti, and it does so in a manner respectful
of the complementarities of the industries of our two countries. It reflects careful consideration
and collaboration with stakeholders here in the United States as well as Haitian industry
representatives and provides a way forward that works to the benefit of workers and businesses in
both countries.”

Sen. Chuck Grassley, R-Iowa, the ranking member of the Senate Finance Committee, also
underscored the  need to protect the interests of both nations, saying “the legislation will
spur investment and create jobs in Haiti, and at the same time the legislation addresses the
concerns that have been expressed by the U.S. textile industry with respect to both domestic and
regional production of textiles and apparel.”

As the legislation was being developed, U.S. textile lobbyists worked with committee
staffers to find a way that would benefit Haiti but not have a negative impact on U.S. textile
jobs. As the legislation was being developed, former Presidents George W. Bush and Bill Clinton
called for the widest possible liberalization of trade, which made it difficult to oppose some of
the proposals that were being made. However, the textile representatives were successful in
minimizing the impact on particularly sensitive product categories such as trousers, knit T-shirts,
pullovers and sweatshirts. This issue involved the so-called Tariff Preference Levels (TPLs) that
permit use of yarn and fabric regardless of the country of origin. TPLs were broadened for certain
Haitian knit and woven apparel items  from 70 million square meter equivalents to 200 million.
The TPLs on  trousers, T-shirts, pullovers and sweatshirts will remain at the current levels.

The legislation also extends the expiration dates for the Caribbean Basin Trade Partnership
Act and the Haitian Hemispheric Opportunity through Partnership Encouragement Act through Sept. 30,
2020.  It also expands the duty-free treatment to products that are wholly assembled or
knit-to-shape in Haiti regardless of the origin of the inputs.

Under the legislation, U.S. Customs and Border Protection is directed to verify that goods
under TPLs are not being unlawfully transshipped into the United States, and it authorizes the
President to reduce the TPLs to account for unlawful apparel shipments.

Calling for quick enactment of the HELP Act, Kevin Burke, CEO, American Apparel &
Footwear Association, said: “As the single largest sector of Haiti’s  economy, the apparel
industry will play a leading role in Haiti’s overall recovery. By renewing soon-to-expire trade
preference provisions and expanding existing programs, this bill works to ensure that all facets of
the U.S. apparel and textile industry have the opportunity to participate in Haiti’s short term
recovery and long term growth.”

May 4, 2010

“Despite some improvements in the recent past foreign matter, stickiness and seed-coat fragments in
raw cotton continue to be serious challenges to the cotton spinning industry worldwide.” This
sentence is kind of a general summary of the International Textile Manufacturers Federation’s
(ITMF’s) Cotton Contamination Survey for the year 2009.

Every Second Year

The Cotton Contamination Survey is produced by ITMF every other year. Last year’s edition is
the 11th issue in the series since a new methodology was applied in 1989. And the paper is very
much representative: 110 spinning mills located in 23 countries evaluated 63 different cotton
growths.

Following is ITMF’s summary of the survey:

Contamination — Unchanged In Comparison To 2007

The level of cottons modestly or seriously contaminated as perceived by the spinning mills
from around the world did not increase compared to the last survey in 2007 remaining constant at
22%. A closer look at the extent of the contamination shows that 6% (2007: 7%) of all cotton
evaluated were seriously contaminated by some sort of foreign matter whereas 16% (2007: 15%) were
only moderately contaminated. As the summary data are arithmetic averages of the different
contaminants, the extent of contamination is fully illustrated only by the results for the
individual contaminants. They range from 4% for “tar” (2007: 5%) to 42% of all cottons processed
being contaminated by “organic matter”, i.e. leaves, feathers, paper, leather, etc. (2007: 40%).
Other serious contaminants are “strings made of jute hessian” (32%), “strings made of woven
plastic” (29%), “fabrics made of cotton” as well as “fabrics made of plastic film” and “strings
made of cotton” (26% each). The most contaminated cotton descriptions considered for the survey
originated in India, Pakistan, Egypt, Uzbekistan and Mali. In contrast, very clean raw cottons were
produced in the USA, (Texas High Plains, Memphis, Pima, South Eastern, California), Israel,
Australia, Brazil and the Ivory Coast.

Stickiness — Record Low

The presence of sticky cotton as perceived by the spinning mills fell in 2009 to 16%, the
lowest level ever recorded (compared to 21% in 2007). Nevertheless, the level of stickiness is
still considerable high and remains a major challenge to the spinning industry. Descriptions that
were affected most by stickiness were those from Burkina Faso, Benin, Brazil, Chad, and Uzbekistan
(medium staples). Also US cotton growths like US-Pima, Israel-Pima, Mali or Tajikistan (medium
staples) were reported to be sticky. On the other end of the range, cottons from Egypt, Greece, USA
(California, South Eastern), Australia, Ivory Coast, Nigeria, and Pakistan (AmSeed AFZAL, Others)
or India (Shankar-4/6, MCU-5) were not or hardly affected by stickiness.

Seed-coat Fragments — Lowest Level Recorded Since Introdution In 1991

With regard to seed-coat fragments the Cotton Contamination Survey 2009 shows that their
appearance in cotton growths remained an issue for spinners around the world with 31% claiming that
they have encountered them in the cotton growths consumed. This is the lowest level since including
measuring the level of seed-coat fragments in the survey in 1991. The origins affected most by
seed-coat fragments are those from Nigeria, India (H-4, J-34), USA (South Eastern), Uzbekistan
(medium staples), Tajikistan (medium staples), Burkina Faso and Syria. Cotton descriptions for
which the existence of seed-coat fragments was negligible (prevalence of less than 20%) included
those from Australia, Benin, India (Others), Pakistan (Others), and the US (California, Texas High
Plains).

May 4, 2010