Ex-Government Trade Official Sees Changes Under New Administration And Congress

David Spooner served as the Bush administration’s chief textile negotiator and assistant
secretary of commerce for import administration. In those positions, he was the administration’s
point man for textile negotiations in Central America, Latin America, Asia and the Middle East. As
he left government service and joined the global law firm of Squire, Sanders & Dempsey LLP,
Spooner shared his views on the outlook for textile trade with
Textile World’s Washington Correspondent Jim Morrissey.

David Spooner expects a pause in what was the Bush administration’s aggressive move toward
free trade as the Obama administration and the new Congress wrestle with ways to deal with the
worldwide economic recession. He sees the likelihood of a move toward greater protectionism, as has
happened in the past, but believes that is the wrong way to go.

“When companies run into tough times and start losing markets and jobs, the instinct is to
turn toward protectionism, and we saw that when that happened in the 1930s, it only exacerbated the
problem, and that is not the way to go,” Spooner said in a far-ranging interview assessing the
textile trade accomplishments of the Bush administration and the future outlook.

Spooner cites as major accomplishments the Bush administration’s success in making the
Western Hemisphere nations more competitive with Asia as a result of a number of free trade
agreements (FTAs). He also says the safeguard quotas agreed to between the United States and China
helped prevent disruption of apparel trade between the two countries and helped minimize
uncertainties in the marketplace.

Asked what, if any, disappointments he has with textile trade, Spooner said he wishes more
could have been done with more countries to strengthen trade in the Western Hemisphere, citing the
failure to create a free trade area of the Americas as one example. He also wishes there could have
been an agreement with Ecuador and that the Colombia FTA would have been approved by Congress. He
says it is important to link textile production in the United States with apparel manufacturing in
the hemisphere.

Spooner certainly does not see any moves toward trade liberalization “right now,” as both
Congress and the new administration are reassessing US trade policies.

With the textile import safeguards expiring, he said, “Everyone is holding their breath to
see if there is an import surge similar to what happened when most textile quotas were removed in
2005.” If a surge does occur, he believes there will be a demand for anti-dumping and
countervailing duty cases, or China could agree to some form of a monitoring system and
self-regulation. He noted that China has a monitoring program in effect with European nations, but
it is not very transparent, and as a result, it is unclear as to how it actually will work.

Spooner says the North America Free Trade Agreement, which was cited during the presidential
campaign as a problem that should be renegotiated, is not the cause of the US trade deficit, and
neither are other FTAs through which the United States in many cases enjoys trade surpluses. 
He says that 95 percent of the US trade deficit is with countries with which the United States does
not have trade agreements. He believes the United States is correct in addressing illegal export
subsidies in other countries, and that attacking them and negotiating the removal of trade barriers
would help US manufacturing.

With all of these factors to be considered, and many questions about how the Obama
administration and Congress will address them, Spooner believes there is a lot of uncertainty
surrounding textile trade in the future.

January 13, 2009