In testimony before the House Ways and Means and Senate Finance Committees February 14 and 15, US
Trade Representative Susan C. Schwab outlined the Bush administration’s trade agenda emphasizing
the need for more free trade agreements, a successful Doha Round of liberalization negotiations and
a push for greater exports. There was little emphasis on what US textile manufacturers consider
their most pressing problem — imports.

Painting a generally rosy overall economic picture, Schwab even saw the sunny side of a
record $763.6 billion trade deficit reported earlier in the week — an increase in exports.

Schwab told members of the trade-legislation-writing committees that a strong US economy is
due in part to the Bush administration’s trade policies. She said the economy grew at a rate of 3.4
percent — faster than Japan and the European Union — and that 2 million jobs were created over the
last 12 months. In 2006, the US textile industry lost 25,000 jobs, and apparel employment was down
by 12,700. She noted that real compensation in the United States has risen by 8 percent since 2001,
and consumer spending is up more than 17 percent in the last five years.

Schwab said productivity increases, technological changes and global competition “can lead to
increased opportunities for many workers.” With respect to those who lose their jobs as a result of
import competition, she said the president has asked for reauthorization and improvements to Trade
Adjustment Assistance, a program that provides job retraining and other assistance to workers
displaced by import competition.

Schwab said the continuation of trade-driven economic improvements is dependent upon
extending trade promotion authority (TPA) to the president. She said the president needs TPA in
order to negotiate regional and bilateral agreements to open markets for US exporters “to level the
playing field and to keep pace with US competitors.”

Members of the committee are skeptical of TPA and have indicated that even if it is approved,
it should include requirements for US trading partners to upgrade their working conditions and
environmental protection. Schwab said she is willing to work with Congress on those issues.

Rep. Sander M. Levin, D-Mich., chairman of the House Trade Subcommittee, questioned Schwab’s
emphasis on exports to the exclusion of addressing import problems. He said: “What about imports?
What about people losing factory jobs?” Schwab responded by saying, “Imports do matter,” and she
pointed out that adjustment assistance will be available to “the fewer than 3 percent of the
workers who may have been laid off due to import competition or overseas relocation.”

February 20, 2007

Under the program, textiles researchers and industry leaders will collaborate using the
roadmapping process to determine how technology can help the industry grow. They also will develop
technology and product concepts and execute a strategy to bring them to fruition. The roadmapping
software will help them manage information gathered through various inputs and generate reports
that provide an overview of the current situation, and formulate a plan for moving ahead.

February 13, 2007

“Our escalating US trade deficits and concomitant loss of 3 million US manufacturing jobs
are a direct outgrowth of US trade policy,” said Auggie Tantillo, executive director of the
Washington-based American Manufacturing Trade Action Coalition. “The government’s refusal to use
access to the US market as trade negotiation leverage gives other countries like China a green
light to subsidize and protect their industries to the detriment of US producers.” He warned the
offshoring of key US manufacturing will only accelerate unless Congress forces changes in trade
policy.

February 13, 2007

“The partnership combines TenCate Geosynthetics’ wealth of experience and technical support
in pavement restoration with Owens Corning’s unique technology and expertise in the manufacturing
of glass/polymer-based pavement reinforcement fabrics,” said Paul Wei, nonwovens technologies
market manager, Owens Corning.

February 13, 2007

Government officials last week moved on two fronts to attack the United States/China trade deficit.
The US Trade Representative filed a complaint with the World Trade Organization (WTO) charging
illegal subsidies, and members of Congress introduced punitive tariff legislation to offset what
they say is China’s illegal currency manipulation. The US trade deficit with China currently is
about $220 billion with $27 billion in textiles and apparel.

In the WTO complaint, US Trade Representative Susan C. Schwab charged China is employing
several subsidy programs to give its industries an unfair advantage in international trade. Among
the issues cited are export subsidies and tax policies that the US government contends work against
fair competition with US and other foreign firms. “We are committed to challenging China’s
WTO-inconsistent practices that harm American workers and manufacturers,” Schwab said. “China’s use
of market-distorting subsidies creates an uneven playing field, and we are seeking to level the
playing field to allow US manufacturers to compete fairly with Chinese firms.”

The complaint triggers a 60-day period in which the two countries can attempt to negotiate
their differences. If that fails, and it likely will, a WTO panel will be convened to determine
what actions, if any, need to be taken. If the United States prevails, it would be allowed to
employ sanctions against China.

In a related development, US Reps. Duncan Hunter, R-Calif., and Tim Ryan, D-Ohio,
re-introduced their legislation that defines currency manipulation as an illegal trade subsidy, and
permits US workers and manufacturers to seek relief against imports from China and other countries
that regulate the value of their currencies. US textile manufacturers contend China’s currency
policies amount to as much as a 40-percent subsidy for its exports to the United States. In
introducing the legislation, Hunter said: “China is cheating on trade. Through the artificial
regulation of its currency, China is strengthening its manufacturing base and increasing America’s
trade deficit at the expense of our manufacturers. This is unacceptable and needs to be corrected
if American workers want to stay competitive.”

While recognizing there is a problem, Treasury Secretary Henry M. Paulson Jr. is opposed to
legislation and has said he hopes to negotiate better terms with China. At a recent hearing before
the Senate Banking Committee, however, senators expressed impatience and urged the administration
to take a much more aggressive stance.

February 6, 2007

On the eve of introduction of the legislation, US Trade Representative Susan C. Schwab
issued a lengthy statement extolling the virtues of free trade. “In countries and regions
throughout the world, the United States’ global economic leadership continues to create more and
better jobs for Americans, achieve market gains for US exporters, generate economic growth and
development opportunities for our free trade partners and enhance choice and purchasing power for
US consumers, farmers and business.”

February 6, 2007

Jones said the process is “entirely backwards,” and that the first step should be to
identify whether there are any US apparel makers that compete with apparel imports from Vietnam.
She charged the government “shot first” and only now is asking questions, and she warned that US
retailers and consumers will pay the price.

February 6, 2007

The company received a $200,000 grant from the One North Carolina fund, as well as a
nine-year Job Development Investment Grant that could provide as much as $1.37 million in state
personal withholding tax equivalent benefits if the company creates all the jobs proposed and keeps
them for nine years.

February 6, 2007

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January 30, 2007

A bipartisan group of senators has introduced legislation banning imports made in sweatshop
factories and permitting injured competitors to sue them. The bill not only imposes fines of up to
$10,000 per violation, but also gives US retailers the right to sue their competitors in the US
courts if their competitors sell merchandise produced in sweatshop factories.

The bill defines a sweatshop as a factory that does not comply with the labor laws of its own
country.

The measure immediately received an enthusiastic endorsement from the Washington-based
American Manufacturing Trade Action Coalition (AMTAC), which represents a wide range of
manufacturers including textiles and apparel. AMTAC’s Executive Director Auggie Tantillo said, “The
failure of other countries, such as China, to adequately enforce minimum labor laws effectively
grants their producers a substantial subsidy over those companies and countries that treat their
workers fairly.” He said an anti-sweatshop law would be a practical solution to the problem.

Initial sponsors of the bill are Sens. Byron Dorgan, D-N.D.; Lindsey Graham, R-S.C.; Russ
Feingold, D-WI; and Bernie Sanders, I-VT.

In introducing the legislation, Dorgan said: “There is no reason for the United States of
America to allow the sale of products made in slave labor-like conditions. This bill would put an
end to it. It also would stand up for American producers and American workers and tell them they
don’t have to compete against those who cut corners at the cost of human health, dignity and even
human lives.”

Dorgan charged that free trade agreements negotiated between the United States and other
nations have fueled a growth in sweatshop production, and goods made in those countries enjoy
duty-free access to the US market at the expense of legitimate manufacturers.

The Democratic leaders of the new Congress have said they will seek to have labor and
environmental standards incorporated into future free trade agreements.

January 30, 2007