Talk about kicking ‘em while they're down. The U.S. textile industry — in the midst of its worst downturn since the Great Depression - got another swipe recently from the Bush administration in the form of a trade deal with Vietnam. The agreement gives Vietnam the most generous access to the U.S. textile market ever granted in an initial bilateral textile agreement.
Not surprisingly, most American textile executives and some Southeastern congressmen are crying foul. They call it the latest example of the current administration using high textile quotas as a bargaining chip with foreign countries, undercutting earlier promises to protect the struggling U.S. textile industry.
As an industry update, the government reported last month that U.S. textiles lost another 2,900 jobs in March as sales dropped sharply. In April, the government reported that the textile industry went deeply into the red in the fourth quarter of 2002, losing nearly $200 million. The industry has closed more than 150 textile mills in the past two years and lost more than 90,000 jobs.
“Why the United States gave away a large portion of its textiles to Vietnam is beyond me,” says Jerry Rowland, president and CEO of North Carolina-based National Textiles. “They just sold out to the importers and the retailers. It's just a shock they would do such a thing.”
American negotiators say the deal caps this year's Vietnamese textile shipments at about $1.65 billion — far below what it would have been without the deal. Buy many lawmakers from textile states say the deal was far too generous.
“This just appears to be another nail driven into the textile coffin,” says Rep. Howard Coble, R-N.C. “I think textiles has become the convenient trading chip. ‘Don't worry, textiles can absorb that’ seems to be the thought pattern. But, my gosh, how much more can textiles absorb?”
It's not just this trade deal, say these lawmakers; the government has a history of using textile trading rules as leverage in negotiating with foreign countries that are owed a favor.
Pakistan saw its textile quotas boosted by 11 percent to 13 percent in exchange for help in the Afghanistan war. Similar discussions were held with Turkey, but the deal fell apart when Turkey refused to lend its military bases.
Lower textile tariffs and higher export quotas usually are near the top of the wish list for underdeveloped countries because their labor costs are cheaper than those in the United States.
But the American Textile Manufacturers Institute says foreign companies cut corners in labor rights. Or, as in Vietnam's case, the textile industry is controlled and subsidized by the government.
Even Bush's strongest allies, including Sen. Zell Miller, D-Ga., have lashed out against the Vietnam agreement. “This latest deal with Vietnam is going to hurt us,” says Miller. “The president has promised to protect this country's textile industry, and we need him to keep that promise.”
The promise came as a concession in Bush's push for broader trade authority, which the House approved 215-214 with the help of several Republicans from textile states who changed their votes.
Rep. Cass Ballenger, R-N.C., says he can't believe the government is bartering with American textile jobs while other industries, such as automobiles, are voluntarily moving their plants overseas.
“We're losing jobs because someone's stealing them,” says Ballenger. “They're just giving them away, which really blows my mind. It's less of a reaction from the textile people because we've been losing so long, so nobody really defends us anymore.”
This systematic “giving away” of the U.S. textile industry hasn't yet had a huge impact on cotton production at the farm level, but it could be only a matter of time.
Cotton use in U.S. textile mills is down by more than 30 percent since 1997, due mostly to plants closing in the United States and opening in other countries. Mill use has dropped from more than 11 million bales in 1997 to about 7 million bales, while exports are expected to grow to a record 11.5 million bales this year.
As the cotton mill industry has continued to trend downward, producers have been fortunate that the difference has been made up with exports. But there's a limit to how much U.S. cotton can be exported. For the good of U.S. growers, let's hope that limit isn't tested.