WASHINGTON — May 2, 2024 — National Council of Textile Organizations (NCTO) President and CEO Kim Glas told the U.S. Trade Representative’s Office (USTR) today the U.S. must be more deliberate in developing trade and investment policies that support the growth and resilience of the vital domestic textile industry and counter China’s dominance through illegal trade practices.
Glas testified at a USTR hearing held at the U.S. International Trade Commission today as part of the agency’s supply chain review on promoting supply chain resilience. During the hearing, the industry outlined concrete steps the administration and Congress could immediately take to help build a strong, resilient supply chain.
“We sincerely thank U.S. Trade Representative Ambassador Katherine Tai and the USTR team for leading this endeavor. We are particularly grateful to Ambassador Tai for her recent visit to North Carolina and participation in a roundtable with our industry to amplify USTR’s supply chain efforts and ensure broad participation from stakeholders in this critical analysis to bolster domestic resiliency,” Glas said.
“While the domestic textile industry is an integral part of the military and public health industrial base, unchecked foreign predatory trade practices, a lack of effective customs enforcement, and misguided trade policy proposals are creating unstable and unsustainable market dynamics,” Glas said in her testimony. “The confluence of these factors is threatening the future of domestic textile manufacturing as well as the textile cand apparel coproduction chain between U.S. and our Western Hemisphere free trade agreement (FTA) partners responsible for $40 billion in annual two-way trade.”
No fewer than 14 U.S. textile factories have been permanently shuttered in recent months, and an estimated 100,000 jobs have been lost in the U.S. and broader hemisphere, she said.
Notably China and other Asian countries compete by “sourcing subsidized textile inputs from China, including those made from slave labor in Xinjiang where 20 percent of global cotton is produced and where synthetics like rayon have been tied to forced labor production” and “a wholesale lack of meaningful labor and environmental standards,” she stated.
“One of the most important actions Congress and the Biden administration can take to counter these illegal trade practices is to close the de minimis loophole. This loophole in U.S. trade law allows 4 million packages a day to enter the U.S. duty free and largely uninspected. Customs and Border Protection reports that textile and apparel goods comprise an estimated half of these entries and China is the largest beneficiary. These entries are not subject to Section 301 duties and have been linked to Uyghur Forced Labor Prevention Act (UFLPA) violations as well as dangerous and counterfeit goods and illicit drugs like fentanyl and precursors. The administration must use its existing authorities to close this dangerous loophole and Congress must act immediately to pass legislation to completely close it,” Glas noted.
“A textile and apparel enforcement plan released by the Department of Homeland Security and Secretary Alejandro Mayorkas in early April is an important first step to combatting fraud and circumvention of free trade agreement rules and trade laws — it must be continuous and aggressive with penalties to help deter fraud and illegal trade activities,” Glas said.
To reverse the current downward trajectory in U.S. textile manufacturing and stop the damage to the industry, Glas recommended the following:
- Immediately Close the De Minimis tariff loophole
- Dramatically ramp up and publicize customs enforcement and trade penalty activities
- Preserve and protect the yarn forward rules of origin
- Reject proposals to expand Generalized System of Preferences (GSP) product coverage to textiles or apparel
- Immediately pass the Miscellaneous Tariff bill
- Increase Section 301 penalties on textiles and apparel imports
- Fully implement the Make PPE in America Act and expand procurement opportunities
- Enhance tax incentives to bolster domestic and regional production
“China is being highly strategic and purposeful in their quest for and success in gaining a stranglehold on the global supply of critical products like textiles. The U.S. must be more deliberate moving forward and not leave this challenge by an increasingly hostile geopolitical rival unanswered. Absent a course-correction to properly prioritize and bolster domestic manufacturing, the consequences in the next crisis will be severe and manifold,” Glas said.
See a link to the full testimony here.
Posted: May 2, 2024
Source: National Council of Textile Organizations (NCTO)
