Textiles quota: US industry worried

The US textile industry is deeply worried by competitors from India and China as the end of the quota system on December 30 approaches, a media report has said.

According to a report in The Washington Times, foreign competition has been creeping up on US companies that spin yarn, weave fabric and sew clothing.

China is expected to capture about 50 per cent of the US clothing market, up from 16 per cent, once quotas end, the World Trade Organization estimates.

India and a handful of other countries are also expected to prosper. Their gains are expected to come at the expense of companies in the United States, Europe and smaller, less efficient countries such as Mexico, Turkey and Indonesia.

The American industry has adjusted by consolidating, scaling back US operations and refocusing overseas. Many believe, however, that the worst is yet to come.

Steve Dobbins, Company president of Carolina Mills in Maiden, North Carolina said he was not sure whether his company would survive.

"We are busting our cans trying to find ways to compete. We don't know whether or not we will succeed, but we are trying," he said.

In the past four years, Dobbins has closed ten plants, laid off 1,400 workers and refocused his textile company on products that won't go toe-to-toe with competition from lower-cost factories in China and India among others.

The mills that made fabric and thread and shops that cut and sew clothing have shed more than half of their workers in the past decade--to 685,600 in November from almost 1.6 million at the end of 1994. That number, the Bureau of Labour Statistics projects, will drop to 449,800 by 2012.

Some are petitioning the government for a new round of protection.

Almost the entire textile industry and more than 100 lawmakers have written to President Bush asking for protection. But retailers adamantly opposed any extension of quotas.

The US Commerce Department-led Committee for the Implementation of Textile Agreements has also effectively embargoed many December shipments--especially from China, India and Pakistan--delaying their arrival until at least February. The December shipments would typically have been for sale early in 2005.

However, retailers are not taking kindly to the action with the US Association of Importers of Textiles and Apparel (USA-ITA), writing to its members that "the action goes far beyond anything CITA has ever done before and clearly constitutes a punitive measure, as well as an attempt to prolong the quota regime."

The trade fight, said The Washington Times, has led to tremendous uncertainty. It appears likely, it said, that US textile makers will have some limited protection for a short time. But that may not help the industry for very long -- if at all, it added.