The U.S. Textile Industry Problems and Opportunities

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					UPDATE: Quota Phase-out
   & Textile Safeguard




    NCC Asheville Meeting
          July 20, 2004
            Presentation
1. China and the Quota Phase-out -
2. How to Counter
3. Strategy
   • World Pressure
   • Hill Pressure
   • Administration Outreach
4. Final Attempt
   • Voter Education Campaign - Grassroots
      Pressure
5. Coming Up….
  Study: China’s Share of Apparel
   Removed From Quota in 2002
100%
                                            30 months
                         UPDATED 75-80%     time - 72%
                           72%
                   53%

            31%

       9%


 0%
   2001     2002   Jun 03   Jun 04   2004
  China with Quotas in Place
15%



              10%
      9%
                     8%       8%
                                    7%     7%
                                                  6%




0%
      China   Thai   Mexico   CBI   Taiw   Bang   Phil
     China 30 Months Later
75% 72%

                                      China
                                      drops
                                   prices 53%


             4%     2%       3%     2%     2%     2%
0%
     China   Thai   Mexico   CBI    Taiw   Bang   Phil
           Predictions              Chinese share
Cotton Sourcing Summit
Survey – Miami                      87% said: 50 – 90%
                                    43% said: 75 - 90%

Past experience – other             Australia and Japan:
markets - apparel                        70 – 77%
Quota removed categories (as of
June 04)                                   72% +

WTO Study (no recent data)          56% (China + India =
                                           71%)
Analysis: Similar products
                                        70% – 85%

McKinsey Study & DHL Study           50% (safeguards)
ITC Study                           “Supplier of Choice”
World Bank Study (no recent data)          50%
US Textile Cotton Consumption
                (mil bales)

 7      6.2



                                     Remnants –
                                     Non-wovens,
                                      carpeting
                              <2



 0
       Jun 04                 2006
       How to Counter China
   Government to use the “threat of
    market disruption” track of WTO
    safeguard clause to keep China under
    control until 2008

   Aggressive use of trade remedies to go
    after Chinese and other countries
    unfair trade practices post 2005
China WTO Textile Safeguard

   Takes until Aug 1 to get a decision –
    lasts only until Dec 31.

   Process starts over again in January 05



        5 month safeguard each year
             “Threat” Case
   File prior to China going off quota –
    decision in January.

   Under “threat,” China will held to 2004
    quota levels plus 7.5%;

   Will force China to the table to
    negotiate a comprehensive agreement
    covering the next three years.
Government on using “Threat”
   Big Confrontation with China /
    importers and retailers strongly oppose

   Refused to consider in previous
    safeguard actions

   Not released criteria to even file a case
         Industry Strategy

1. Worldwide Coalition     Gov.
                         Restrains
2. Hill Pressure          China
                          Using
3. Grassroots Campaign   “Threat”
        World Wide Pressure
   Global Alliance for Fair Textile Trade
    (GAFTT)

    • Begun March 2004
    • Now 102 trade groups from 51 countries
    • Events in Istanbul, Johannesburg,
      Kampala, Brussels and Geneva

           www.fairtextiletrade.org
      Growing Global Effort
   9 countries have announced at WTO
    that something must be done about
    China – Mexico, Turkey, Bangladesh,
    Indonesia, Sri Lanka, Mauritius, Nepal,
    Dominican Republic, Madagascar

   30 million jobs are predicted to be lost

   Concerns about economic dislocation,
    instability, increased poverty, terrorism
      WTO to meet Oct. 1st
   Council on Trade in Goods

   More countries expected to speak up

   Make sure that they support use of “threat”


   Increase pressure on White House to
    act on developing countries behalf
              Hill Pressure
   Two letters on China and safeguards –
    over 100 signatures on each

   Unity DAY- July 20th – over 100 textile
    executives visited more than 40 offices
    to talk about China

   High level meetings with DOLE and
    BURR to plan strategy re: White House
      Administration Outreach
   4 attempts (NCC, NCTO) to meet with
    Aldonas/Commerce over China &
    CAFTA since January

   First meeting took place last week to
    begin to discuss criteria for “threat”

   Meeting w/Zoellick – warning over
    confrontation
     Outreach to White House
   Gant has used personal channels
   Burr has called twice
   Dole has met with Zoellick and called
    White House. Also wrote to Powell.
   Zoellick has called twice
   Aldonas has now called

          NO RESPONSE TO DATE
            Final Attempt
   Voter Education Campaign
   Targeted on Trade and Loss of Jobs
    Overseas – N. Carolina heavy + S.
    Carolina
   Ramp Up Over Time: Billboards then
    Radio
   Can be stopped at any time
Stop Sending Jobs
     Overseas
 Change Trade Policy Now
Change Trade Policy Now

     Register…Vote!
          Grassroots Portion
   “Textile coordinators” in every plant
   Voter registration drives
   4 major rallies
   Website: www.myjobcounts.org
   Editorial boards/leafleting/letters to
    editor/billboards/bumper stickers
               Coming Up
   Ask for major trade groups to help fund
    support grassroots campaign
   Campaign ramp up to begin soon after
    Labor Day
   Industry likely to file dozens of
    petitions late September/early October
   GAFTT to have major summit in
    Geneva prior to Oct. 1st meeting.