BASF Reorganizes Into Six Segments

As part of its strategy to focus its businesses more closely on its customers,
Germany-based BASF AG will restructure its businesses into six segments: Chemicals, Performance
Products, Plastics, Agricultural Solutions, Functional Solutions, and Oil & Gas.

The Performance Products segment will consist of the new Care Chemicals division — a
combination of the former Fine Chemicals division with the Performance Chemicals division’s
detergents and cleaners business — and the Acrylics & Dispersions, and Performance Chemicals
divisions.

The Plastics segment will consist of Styrenics, Performance Polymers and
Polyurethanes. The Chemicals segment will comprise Inorganics, Petrochemicals and
Intermediates.

The new Functional Solutions segment will consist of Catalysts, Construction
Chemicals and Coatings, while the Agricultural Solutions segment will contain Crop Protection. The
Oil & Gas segment will comprise Oil and Gas.

The restructuring, effective January 1, 2008, will enable BASF to bring products and
solutions to market faster, creating increased potential for value-added growth, according to Dr.
Jürgen Hambrecht, chairman of BASF’s Board of Executive Directors. He added that investors will be
able to better assess BASF because smaller businesses will be combined within the new
segments.


December 11, 2007

Celanese To Raise Emulsion Prices

Effective Jan. 1 2008, or as contracts allow, Celanese Corp., Dallas, will increase
the price in Europe of all polyvinyl acetate homopolymer, vinyl acetate co-polymer, acrylic,
styrene-acrylic and vinyl-acrylic emulsions by 100 euros per metric ton.

December 11, 2007

Omniflex Adds Odor-Control To Transport® Apparel Films

Omniflex LLC has added Natural Elements™ odor-control technology to its line of
Transport® waterproof-breathable films. Developed by joint venture partner Etcetera LLC, the new
technology now enables fabric laminators, and designers and manufacturers of apparel and footwear
to produce waterproof-breathable, bacteria-, mildew- and mold-killing textile composites using a
single film lamination rather than the two-layer film lamination used in competitive
methods.

The new films — made from polyurethane, co-polyester and ether-amide polymers — are
suitable for apparel and footwear applications that require high levels of stretch and recovery,
and moisture-vapor transmission; good drape; and durability to washing.

Natural Elements additives, which include silver, copper, blends of the two, and
proprietary non-metallic additives, may be incorporated into films, adhesive systems, fabric
surface treatments and yarns. The technology can be customized to fit a specific application’s
odor-control needs in order to provide slow to fast activation, short to long durability or a
combination of both in one film layer.

December 11, 2007

Quality Fabric Of The Month: Everything’s Coming Up Pink

Dothan, Ala.-based Twitchell Corp. has donated 55,000 square yards of neon pink Earthtex® thermoplastic olefin (TPO) fabric in support of a project initiated by actor Brad Pitt to help rebuild the Lower Ninth Ward in New Orleans after the devastation brought by Hurricane Katrina in
2005. The bulk of the fabric has been made into 150 tent-like houses that are scattered across the ward as part of the Pink Project, a giant art installation to promote the project’s goal of raising enough money to build 150 eco-friendly homes in the ward. Pitt initiated the Make It Right Project (MIR) after meeting Lower Ninth Ward residents and learning of the challenges they have encountered in trying to rebuild their homes. He and project partner, film producer and philanthropist Steve Bing, have each pledged $5 million in matching funds to the rebuilding project. Core team members include Director Tom Darden III;

architecture firms William McDonough + Partners, Charlottesville, Va. and San Francisco, and Graft, an international firm with offices in Los Angeles, Berlin and Beijing; Raleigh, N.C.-based Cherokee
Investment Partners’ nonprofit Cherokee Gives Back Foundation; and Jolie-Pitt Foundation advisors Trevor Neilson and Nina Killeen. Home construction and the materials used will comply with Cradle-to-Cradle
SM (C2CSM) protocols developed by McDonough and chemist Michael Braungart, founders of McDonough Braungart Design Chemistry LLC (MBDC) — a Charlottesville-based consultancy that promotes the use of eco-effective, sustainable design, processes and materials in building and manufacturing of products.

newpinkhouses


As part of the Make It Right Project’s Pink Project, 150 neon pink Earthtex® houses have
been scattered around New Orleans’ Lower Ninth Ward to represent 150 new eco-friendly homes that
will be built with funds raised through the project. These homes are expected to be the first in a
project that could eventually grow to encompass as many as 5,000 new homes — the total destroyed in
the Lower Ninth Ward during Hurricane Katrina — and ultimately could become a blueprint for other
communities to use for similar purposes.

MIR organized a nationally broadcast event earlier this month in New Orleans as a kickoff to a fundraising effort to attract additional donors to the project.

Twitchell’s involvement in the project resulted from a recommendation by MBDC, which has certified Earthtex at the Silver level according to its C2C protocol. The volatile-organic-compound (VOC)-free fabric for interior applications such as shades and wall coverings is made with a pigmented TPO yarn that may be coated with the same material as the core, making end-products fully recyclable into new, virgin-quality product at the end of their useful lives.

According to Jeff Register, vice president, sales and marketing, Twitchell, the Earthtex polymer can be pigmented to match any color palette specified, but for the Pink Project it needed to have a high degree of gloss, and the company was asked to make a version of
the fabric that had more “pop” than the company’s standard Earthtex fabrics, which typically have been some variation of mesh. To do this, the company coated the surface of the fabric with Earthtex polymer to make it solid.

“The fabric has been attached over frameworks on what might be the base, second story or roofline of a house,” Register said, as he described the installation. “The Lower Ninth Ward has been totally cleared of debris from the storm, and they installed the houses askew,
much like the houses were left after Katrina. It’s a scattered mess, but it’s a very bright visual.”

Each pink house represents a home that will be built as funds are raised, Register said. The cost of each house is pegged at $150,000, and it is hoped that by the time the Pink Project installation is taken down on Jan. 7, 2008, all 150 homes will have been funded. The
homes will feature environmentally sustainable components such as rooftop solar panels, rainwater harvesting, high-efficiency heating/cooling systems, energy-efficient lighting and appliances, and
low-VOC paint, among others.

After the Pink Project installation is dismantled, the Earthtex fabric will be reused to make tote bags to be sold to raise additional funds for MIR. The bags, along with other items, will be available online at
www.makeitrightnola.org/mir_SUB.php?section=merch&page=main.

Twitchell also engaged some of its key customers to join it in its
participation in MIR. “We’ve had outdoor furniture manufacturers that have given us furniture at a greatly reduced price, and we have put the same pink fabric on some directors chairs for the project,” Register said. The chairs also will be sold off after event is over.

Twitchell’s participation in the MIR project is in line with its own strategy
with regard to environmental sustainability. “It is a strategic direction for Twitchell to provide alternative, green products for traditional applications as well as developing new applications,” Register said. “We will continue to expand the Earthtex family; that product very well could become all-weather wicker for casual furniture or sling fabrics for furniture. We currently have a high degree of presence in internal and external shading products and we’re beginning to get requests
for green alternatives for those products. We’re working on a solar canopy for Wal-Mart for its lawn and garden center, with the first store rollout in Bentonville [Arkansas, the company’s headquarters location] in January.”

Register also mentioned the company is working with companies such as Knoll Textiles, Interface Fabrics and Designtex to introduce new Earthtex wall coverings, panel fabrics and window coverings; and it also is designing an Earthtex version of a transitional-type floor covering for hospitality, health care and transitional living markets.


For more information about Earthtex® fabrics, contact Jeff Register (334) 836-1902,
jeffr@twitchellcorp.com,
 www.twitchellcorp.com/earthtex
For more information about the Make It Right Project, visit
www.makeitrightnola.org


December 11, 2007

VeriVide Appoints Heal DigiEye Distributor


digieyeVeriVide
Ltd. — a developer and manufacturer of highly specialized viewing assessment equipment — has
appointed England-based James H. Heal & Co. Ltd. — a producer and supplier of fabric and
colorfastness testing instruments — as the Preferred Global Distributor of its DigiEye non-contact
digital imaging system.

DigiEye depicts color and appearance of 2-D and 3-D objects in a controlled lighting
environment via its ability to select and extract color data from any pixel in the high-resolution
image, enabling measurement of extremely small or irregularly shaped samples. It is used in a
number of industries including fabrics, apparel and flooring.


December 11, 2007

IFAI Takes A Chance On Vegas



ifaiH

osting a trade show in Las Vegas is not an easy proposition. If you are looking for a
town full of distractions, a time change for Easterners and a circus-like atmosphere, Vegas is the
city for you. But you have to hand it to the Roseville, Minn.-based Industrial Fabrics Association
International (IFAI) — the show and seminars at IFAI Expo 2007 were strong enough to shine through
the glare of Vegas and the din of clanging one-armed bandits.

According to IFAI, the show attracted 7,637 registered participants from 61
countries and featured 450 exhibitors. In addition, there were 114 industry speakers and
facilitators, nine market-specific symposiums and 10 hands-on workshops and seminars. “The
attendance at IFAI Expo builds each year and is living proof of the health of our industry,” said
Todd Lindemann, IFAI’s vice president of conference management. “We continue to see strong growth
in the digital graphics market [in terms of] machinery and also in fabric technology.”

Keynote speaker Philip Lempert, sponsored by Glen Raven, N.C.-based Glen Raven
Custom Fabrics Group LLC, presented an overview of marketing opportunities and shifts caused by the
aging of our society, as well as changes in technology influencing consumer behavior. With a
reasonable attendance on hand for the 8 a.m. start — fairly early in Vegas terms — IFAI members and
Expo attendees showed that for this show, they meant business.


Achievement Awards,

New Conference Announced



IFAI received 387 entries in 28 categories for the 60th International Achievement
Awards, which recognize design, technological innovation and excellence in the specialty fabrics
industry. Entries from 14 countries were submitted for this year’s competition. Please see sidebar
below for a full list of award winners.

IFAI President Steve Warner made a special announcement to introduce the IFAI
Advanced Textiles 2008 Conference, which will be held in Berlin in June 2008. “Our industry is now
a global marketplace for every country no matter what the size,” Warner said. “Activities such as
this conference help lay the foundation for our members’ success and build the strength and voice
of our association on behalf of our members around the world.”

warner

IFAI President Steve Warner announced the new IFAI Advanced Textiles 2008 Conference, to be
held in Berlin, during a special press conference at IFAI 200
7.


IFAI Expo 2008


IFAI Expo 2008 will be held Oct. 21-23, 2008, at the Charlotte Convention Center. If
past achievements are any indication of future success, IFAI’s track record in Charlotte is very
positive. The 2002 Expo held in that city was a stepping-stone towards attracting larger numbers of
visitors and exhibitors, particularly from the traditional textiles segment of the
industry.

“Exhibitors already are very excited about IFAI Expo 2008 in Charlotte, N.C. — the
heart of textile country,” Lindemann said. “Many exhibitors have increased their booth size for
next year.” Additionally, Lindemann said, exhibitors at the Las Vegas show have already booked 69
percent of the space for IFAI Expo 2008.



IFAI 2007 International Achievement Award Winners


Tensile Structures, under 10,000 square
feet

Award of Excellence

LEAD Inc., Husnes, Kvinnherad, Norway

Project Name:
Tempo

Outstanding Achievement Award

Comercial Industrial Delta S.A, Lima, Peru

Project Name:
Alameda del Rio

Outstanding Achievement Award

Beijing N & L Fabric Technology Co., Beijing, China 

Project Name:
Square in the Center of Development Zone of
Ningbo

Tensile Structures, 10,000–30,000 square feet

Award of Excellence

Oasis Tension Structures (Aust.) Pty. Ltd., Braeside, Victoria, Australia

Project Name:
The Grand Pavilion

Outstanding Achievement Award

Architen Landrell Associates Ltd., Monmouthshire, United Kingdom

Project Name:
O2 Riverwalk

Outstanding Achievement Award

Comercial Industrial Delta S.A, Lima, Peru

Project Name:
Plaza Lima Sur Shopping Center

Tensile Structures, more than 30,000 square feet

Award of Excellence

UFS Australasia Pty Ltd., Kingscliff, New South Wales, Australia

Project Name:
Sydney Wildlife World

Outstanding Achievement Award

Birdair Inc., Amherst, N.Y.

Project Name:
Kuwait Stadium to Jaber Al-Ahmad
International Stadium

Outstanding Achievement Award

Beijing N & L Fabric Technology Co., Beijing, China 

Project Name:
Stadium of Foshan

Air Structures

Award of Excellence

Tectoniks Ltd., Shrewsbury, Shropshire, United Kingdom

Project Name:
“Spirit of Dubai” Airship Terminal

Outstanding Achievement Award

Lindstrand Technologies Ltd., Shropshire, United Kingdom

Project Name:
Arc Sphere

Outstanding Achievement Award

Tectoniks Ltd., Shrewsbury, Shropshire, United Kingdom

Project Name:
Playstation 3 Touring Roadshow

Awnings, Commercial

Award of Excellence

Sunmaster of Naples Inc., Naples, Fla.

Project Name:
Edgewater Cantilevered Dining Awning

Outstanding Achievement Award

Architectural Sails, Ashmore City, Queensland, Australia

Project Name:
Wynn Casino, Macau, China

Outstanding Achievement Award

Miami Awning Co., Miami

Project Name:
Doral Sales Center Entrance Awning

Awnings, Residential

Award of Excellence

Hi Plains Canvas Products Inc., Amarillo, Texas

Project Name:
Londa Carrasco

Outstanding Achievement Award

Caribbean Awning Production Co., Castries, Saint Lucia

Project Name:
Du Boulay Residence, Cap Estate, St. Lucia

Outstanding Achievement Award

Sunmaster of Naples Inc., Naples, Fla.

Project Name:
Deangelico Curved Accent Awnings

Awnings, Retractable

Award of Excellence

Chesterfield Awning Co. Inc., South Holland, Ill.

Project Name:
Macy’s

Outstanding Achievement Award

Craft-Bilt Manufacturing Co., Souderton, Pa.

Project Name:
Haven Lake Installation

Outstanding Achievement Award

Rainier Industries Ltd. Tukwila, Wash.

Project Name:
Interbay Golf Course

Canopies, Commercial

Award of Excellence

Rainier Industries Ltd., Tukwila, Wash.

Project Name:
Gaia Hotel

Outstanding Achievement Award

Sunmaster of Naples Inc., Naples, Fla.

Project Name:
Aria Entry “Porte Cochere”

Outstanding Achievement Award

G & J Awning and Canvas Inc., Sauk Rapids, Minn.

Project Name:
St. Patrick’s Church

Canopies, Residential

Award of Excellence

Rainier Industries Ltd., Tukwila, Wash.

Project Name:
The Sling

Outstanding Achievement Award

Jones Awnings & Canvas Inc., Pompano Beach, Fla.

Project Name:
Private Residence

Outstanding Achievement Award

Awning Factory & Marine Canvas, Oakland Park, Fla.

Project Name:
King Residence

Free-Standing Canopies

Award of Excellence

Sunmaster of Naples Inc., Naples, Fla.

Project Name:
A Trellis Runs Thru It

Outstanding Achievement Award

Sollertia Inc., Montreal

Project Name:
Ripple Effect

Outstanding Achievement Award

Sollertia Inc., Montreal

Project Name:
Val-Morin Terrace Canopy

Shades

Award of Excellence

G&J Awning and Canvas Inc., Sauk Rapids, Minn.

Project Name:
Cross Lake Cabin

Outstanding Achievement Award

Sunmaster Of Naples Inc., Naples, Fla.

Project Name:
Rooftop Dining Screens (Wensinger)

Outstanding Achievement Award

Lake Gaston Awning, Bracey, Va.

Project Name:
Arnold Library

Interior Banners

Award of Excellence

Architen Landrell Associates Ltd., Monmouthshire, United Kingdom

Project Name:
Duxford Airspace

Outstanding Achievement Award

Judy Dioszegi, Designer, Libertyville, Ill.

Project Name:
Journey

Outstanding Achievement Award

Banner Creations Inc., Minneapolis

Project Name:
Avant Storefront

Exterior Banners, more than 500 yards

Award of Excellence

Rainier Industries Ltd., Tukwila, Wash.

Project Name:
Cheney Stadium

Marine Powerboats

Award of Excellence

Cape Canvas & Rigging Service, West Yarmouth, Mass.

Project Name:
31-foot Jupiter Center Console

Outstanding Achievement Award

Mike’s Marine Custom Canvas, Virginia Beach, Va.

Project Name:
30-foot Glacier Bay Center Console

Outstanding Achievement Award

Rainier Industries Ltd., Tukwila, Wash.

Project Name:
Tiara Yacht Enclosure

Marine Upholstery

Award of Excellence

DRH Canvas & Marine Ltd., Halifax, Nova Scotia, Canada

Project Name:
Chris Craft Interior Upholstery

Outstanding Achievement Award

Yacht Charmer Interiors LLC, Apollo Beach, Fla.

Project Name:
20-foot Deck Boat

Outstanding Achievement Award

European Custom Upholstery, Lighthouse Point, Fla.

Project Name:
Cockpit and Interior Cushions

Marine Sailboats

Award of Excellence

Iverson’s Design, Olympia, Wash.

Project Name:
Extra-large Dodger

Outstanding Achievement Award

Iverson’s Design, Olympia, Wash.

Project Name:
Elan 386 Retractable Dodger

Outstanding Achievement Award

Iverson’s Design, Olympia, Wash.

Project Name:
Yellow Enclosure on Beneteau 353

Party Tent Rental

Award of Excellence

Chicago Party Rental, Countryside, Ill.

Project Name:
2006 Lexus Dealer Conference

Outstanding Achievement Award

Advanced Tent Rental Ltd., Concord, Ontario, Canada

Project Name:
Bresler-Donahue Wedding

Outstanding Achievement Award

Eventstar Productions, Medley, Fla.

Project Name:
Kansas City Wedding

Commercial Tent Rental

Award of Excellence

Röder Zelt und Veranstaltungsservice GmbH, Büdingen, Germany

Project Name:
Car Presentation Smart For Two, November 2006,
Stuttgart, Germany

Outstanding Achievement Award

Special Event Tent & Party Rental, Bangor, Pa.

Project Name:
Di Sabatino Construction Project

Outstanding Achievement Award

Röder Zelt und Veranstaltungsservice GmbH, Büdingen, Germany

Project Name:
Equestrian World Championships

Tent Manufacturing

Award of Excellence

Pacific Domes, Ashland, Ore.

Project Name:
Premier, Metropolis Mall

Award of Excellence

Carpas y Lonas el Carrousel S.A. de C.V., Mexico City

Project Name:
Tent for Animatronix Tour

Outstanding Achievement Award

Carpas y Lonas el Carrousel S.A. de C.V., Mexico City

Project Name:
Bardum Circus

Outstanding Achievement Award

Carpas y Lonas el Carrousel S.A. de C.V., Mexico City

Project Name:
Tent Tensostructure for Playa Mia Beach Club

Architectural Structures

Award of Excellence

Jens J. Meyer, Visual Artist, Essen, NRW, Germany

Project Name:
Hovering Archives

Outstanding Achievement Award

FTL Design Engineering Studio, New York

Project Name:
City Place Performance Bandshell

Outstanding Achievement Award

USA Shade & Fabric Structures Inc., Costa Mesa, Calif.

Project Name:
Westgate Mall

Outstanding Achievement Award

Taiyo Membrane Corp., Brisbane, Queensland, Australia

Project Name:
Radisson Resort, Fiji Denarau Island

Trade Show, Display & Stage

Award of Excellence

Moss Inc., Belfast, Maine

Project Name:
Nokia “NGage” Tradeshow Booth

Outstanding Achievement Award

Moss Inc., Belfast, Maine

Project Name:
Crashing the Culture, PepsiCo Consumer Day
2007

Outstanding Achievement Award

Transformit, Gorham, Maine

Project Name:
Starkey Hearing at AAA 2006

Outstanding Achievement Award

University of Texas College of Architecture, San Antonio, Texas

Project Name:
Advanced Fabrics Exhibition Structure,
IFAI Expo 2005

Commercial Interiors

Award of Excellence

Taiyo Kogyo Corp., Tokyo

Project Name:
Flower Dance

Outstanding Achievement Award

Eventscape Inc., Toronto

Project Name:
Stockton Event Center

Outstanding Achievement Award

Hightex GmbH, Rimsting, Germany

Project Name:
Monumento Homenaje a Las Victimas de Los
Atentados Del 11M

Interactive and Cold-Air Inflatables

Award of Excellence

Kanbo Pras Corp., Osaka, Japan

Project Name:
Baseball glove

Outstanding Achievement Award

Canvasland Holdings Ltd., Levin, New Zealand

Project Name:
Hold

Outstanding Achievement Award

Giant International, Victoria, Australia

Project Name:
Inflatable Wall at Federation Square

Geosynthetic Projects

Award of Excellence

TenCate Geosynthetics, Pendergrass, Ga.

Project Name:
Yeager Airport Runway 5 Safety Area Improvements,
Charleston, W.Va.

Outstanding Achievement Award

ML Ingeniería, Morelos, Mexico

Project Name:
Chilpancingo Retaining Walls

Outstanding Achievement Award

Flint Industries Inc., Metter, Ga.

Project Name:
Sludge Pond Cap

Industrial Applications

Award of Excellence

Taiyo Kogyo Corp., Tokyo

Project Name:
Cool Cargo FZ

Outstanding Achievement Award

Hi Plains Canvas Products Inc., Amarillo, Texas

Project Name:
City Tractor

Outstanding Achievement Award

AR Tech, Div. of A&R Tarpaulin, Fontana, Calif.

Project Name:
Remote Roll-Over

Safety and Protective

Award of Excellence

AR Tech, Division of A&R Tarpaulin, Fontana, Calif.

Project Name:
DRA Protection Pads

Outstanding Achievement Award

Thermal Control Products, Inc., Concord, N.C.

Project Name:
Flame-retardant Furnace Pad

Outstanding Achievement Award

AR Tech, Div. of A&R Tarpaulin, Fontana, Calif.

Project Name:
Amp Systems

Miscellaneous

Award of Excellence

Capitol Awning Co. Inc., Jamaica, N.Y.

Project Name:
Waldorf Towers

Outstanding Achievement Award

Carpas Y Lonas El Carrousel S.A. de C.V., Mexico City

Project Name:
Trajineras

Outstanding Achievement Award

Expert Upholstery, Gloucester City, N.J.

Project Name:
1953 Porsche

Multiple Fabric Structures

Award of Excellence

Tropical Js Inc., Honolulu

Project Name:
Miramar Canopy, Awnings and Umbrellas

Outstanding Achievement Award

Tropical Js Inc., Honolulu

Project Name:
Fairfield Hawaii, Waikiki

Outstanding Achievement Award

Trimmer Smith Awning & Upholstery, Mobile, Ala.

Project Name:
Beau Rivage Casino Resort

Source: http://www.ifai.com


November/December 2007

Domestic Declines Slow Down


T
here’s growing evidence that the shrinkage in industry demand may finally be beginning to
slow down a bit. Especially encouraging are new government statistics covering the latest available
six-month period. These figures show domestic mill production declined only a little more than 3
percent over this time period – not great by a long shot, but it’s a lot better than the
considerably bigger 5.3-percent fall-off recorded over the previous six months. Backing this up is
the similar decelerating rate of demand slippage being reported in dollar shipments of textile mill
products. The probable factors behind this somewhat less dismal performance would have to include:
an improving domestic mill production mix with its increasing concentration on niche products,
which tend to be less sensitive to overseas competition; cost controls that have been able to
minimize the demand-dampening effect on new price increases; consumer willingness to keep spending
– despite the big subprime mortgage meltdown, apparel store sales at last report were still running
some 3 to 5 percent above year-ago levels; and last, but not least, a rather significant slowdown
in import gains.

On the latter score, year-to-date incoming shipments of textile mill products on a
square-meter-equivalents basis were running pretty much at year-ago levels. And even if you add
apparel imports to the overall mix, the year-to-date increase vis-à-vis the same period of 2006
comes to only around 2 percent. This latter number represents a vast improvement over import gains
reported as recently as 2005 – when the incoming total of textile and apparel shipments posted a
disturbing 10-percent advance. More on these import trends and particularly the role being played
by China below.


Some Other Upbeat Signs

Industry executives also are being buoyed by the continuing absence of labor and raw-material
cost pressures. As noted in a recent column, unit labor costs have remained pretty flat over the
past 12 months, with this trend expected to spill over into the new year. Nor are any big new
runups seen in key raw materials like cotton and man-made fibers. The lack of hikes in the latter
area are especially encouraging given the continuing runup in energy tabs – man-mades’ major
feedstock – over the past year. Still another positive development: Mills are keeping their
capacity to produce at relatively high levels – cutting back far less than recent demand shrinkage
might have suggested. More to the point: Mill production potential has slipped only 2.7 percent
over the past 12 months – significantly less than would have been indicated by the much larger
9-percent drop in demand over the same period. One key factor behind this trend – the continuing
need and willingness on the part of mills to invest in new capital projects. Preliminary estimates
for 2007, for example, point to yet another $1 billion year for the purchase of new, more efficient
plants and equipment. If nothing else, this suggests that mills are as determined as ever to remain
competitive, world-class producers in today’s big global marketplace.

DECBFgraph


Another China Assessment

Meantime, the ever-changing role of China in the US import equation will bear close monitoring.
As of now, all indications would seem to point to some slowdown in incoming shipments from that
nation. Several factors are likely to contribute to such a development. For one, Beijing’s
production costs are beginning to rise as workers start demanding higher salaries. Indeed, one
recent study shows Chinese manufacturing pay now advancing at a 10- to 15-percent annual pace.
Secondly, there’s growing pressure here in the United States to stem the import tide. More action
is wanted to both accelerate the upward revaluation of the Chinese yuan and remove that nation’s
subsidies, which are said to give the Chinese a pricing advantage in 73 different textile areas.
Also feeding US demands for more action is the fact that the remaining US quotas on Chinese goods
will expire by the end of 2008. The problem is probably best expressed by Cass Johnson, president
of the National Council of Textile Organizations. As he puts it: “If China merely follows past
history, it will take 65 percent of US and European apparel markets once the remaining safeguards
are removed.” Pressure engendered by all these worries will almost certainly have a braking effect
on future imports. TW’s bet for the upcoming year: About an 8- to 10-percent increase in textile
and apparel incoming shipments from China – well under the estimated big 17-percent gain seen for
the year now ending.

December 11, 2007

Peru FTA Gets Final Approval

The US/Peru free trade agreement (FTA) has received final congressional approval with a December 3
Senate vote of 77 to 18, following House approval in November by a vote of 285 to 132. The pact,
which gives Peru permanent duty-free access to the US market, enjoyed the support of US textile
manufacturers and importers of textiles and apparel. It won the support of the US textile industry,
because it has a rule of origin requiring that apparel enjoying the duty-free treatment will have
to contain yarn and fabric made in the participating countries. The agreement is seen as an
opportunity for new markets for US fabric in apparel that could displace apparel imports from Asia
and the Far East.

As the measure cleared the Senate, Kevin Burke, president and CEO of the American Apparel &
Footwear Association, praised its passage as an important step toward encouraging trade with the
other Andean nations like Panama and Colombia. He said an “unprecedented coalition” of
representatives from the entire US textile and apparel supply chain — from cotton to consumers —
supported the agreement.

The National Retail Federation (NRF) said the agreement will promote economic growth in both the
United States and Peru, and will increase job opportunities for US workers whose jobs depend on the
$7.4 billion in current trade between the two nations. NRF also said it will promote “ democratic
stability” and aid in the war on narcotics.

US Trade Representative Susan C. Schwab took advantage of the strong bipartisan support for the
agreement to make a pitch for Congress to approve FTAs with Colombia, Panama and South Korea. Those
agreements, however, face considerable opposition and are unlikely to be acted upon this year.

December 4, 2007

China Agrees To Drop Some Subsidies Affecting US Trade

China’s agreement with the US government to eliminate some of its subsidies affecting trade with
the United States could have some impact on textile and apparel trade, but it is not being viewed
as any major breakthrough. In February of this year, the US government filed a case with the World
Trade Organization (WTO) charging that a number of China’s “pervasive subsidies” are illegal under
WTO rules. As a result of the agreement, the United States will drop its case, providing the
Chinese demonstrate they are living up to their commitment.

The agreement received a decidedly mixed reaction in Washington. US Trade Representative
Susan C. Schwab said that the agreement is “concrete and welcome,” although many challenges still
remain. “I am very pleased that we have been able to sign an agreement with China that should lead
to full elimination of prohibited subsidies, and this agreement also demonstrates that two great
trading nations can work together to settle disputes in their mutual benefit,” she said.

Schwab noted the agreement is designed to settle a WTO case the United States and Mexico
initiated in February of this year. The United States had alleged that China was maintaining
several subsidy programs prohibited under WTO rules and that these programs were providing
significant benefits across a broad spectrum of industries in China. Although details of the
agreement have not been released, it is possible it could affect some of the subsidies used by
Chinese textile and apparel manufacturers.

Schwab said that if for any reason China fails to live up to terms of the agreement, the
United States has the right to restart the proceedings with the WTO.

While the agreement was welcomed by US textile manufacturers, the general feeling is that it
does not go far enough in solving subsidy problems, and it is viewed with some skepticism.
Importers, on the other hand, feel it could result in price increases for US consumers.

The United States Business and Industry Council, which represents some 1,500 small
manufacturers, blasted the agreement, charging that it is “utterly useless.” Council President
Kevin L. Kearns said the agreement fails to address the single-biggest problem — China’s
undervalued currency — and it fails to address the secrecy of the Chinese government’s policies. “
The Chinese are masters of the subsidy shell game, taking away with one hand and giving with the
other,” Kearns said, adding that “Chinese bureaucrats can pull these switcheroos much faster than
the US officials or businessmen can identify them.”

Cass Johnson, president of the National Council of Textile Organizations (NCTO), had a much
more temperate reaction, saying that while the agreement could be a step in the right direction,
much more needs to be done. “It’s like peeling an onion,” he said, “and this is just one layer.”
Johnson said a much more damaging subsidy is the undervaluation of China’s currency. In recent
testimony before the US International Trade Commission, NCTO cited 73 subsidies the Chinese
government uses to help its manufacturing industries.

Sen. Charles E. Schumer, D-N.Y., who is sponsoring legislation designed to address the
Chinese currency problem, said the action is a “small step on the long road toward playing more
fairly in global trade.”

December 4, 2007

WTO Proposes Guideline For Using Anti-Dumping And Countervailing Duty Laws

World Trade Organization (WTO) Director General Pascal Lamy has circulated to member nations a
draft text of rules he would like to see govern the use of anti-dumping and countervailing
proceedings, setting the stage for a major debate over the trade remedies. Lamy said the proposed
texts are “ambitious and balanced” and will enable negotiators to work on a set of rules in the
coming weeks. US textile manufacturers, importers and the US government immediately started
analyzing the texts to determine what impact they might have.

Officials of the US Department of Commerce and US Trade Representative’s office issued a
statement saying that while they appreciate the fact that WTO negotiators are addressing the
issues, they are “very disappointed with important aspects of the draft text.” They said that as
negotiations move forward, they will be “fully committed to preserving the strength and
effectiveness of US trade remedy laws.”

Questions surrounding the use of anti-dumping and countervailing duty laws already have
become hot issues in Congress and with US textile manufacturers and importers. Textile
manufacturers want to clarify and strengthen their ability to use the trade remedies, particularly
against state-run economies such as China and Vietnam. In particular, they would like to see
currency manipulation defined as an unfair trade practice that would be subject to countervailing
duties. Retailers and other importers are opposed to what they see as abuses of anti-dumping and
countervailing duty mechanisms.

Eric Autor, vice-president and international trade counsel for the National Retail
Federation, said: “Anti-dumping and countervailing duty measures clearly have their place in a
rules-based trading system. But we need to address unfair and abusive use of these measures that
have an adverse impact on US companies by undermining hard-won gains in access to foreign markets,
hurting their international competitiveness and ultimately harming American jobs, particularly in
manufacturing and agriculture.”

Because this is such a contentious issue, a consensus will be extremely difficult to reach.



December 4, 2007

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