Retailers weighing in on WTO textile disputes
Oct 6, 2004 12:00 PM, Forrest Laws
A major U.S. retailer has threatened to stop buying textile and apparel products from Bangladesh if its government does not withdraw its request that the World Trade Organization delay the phase-out of textile and apparel quotas on Jan. 1. The retailer, J.C. Penney, confirmed the threat in an article in Women's Wear Daily.
“We are so far down the road here, we can't go back without causing a major disruption to U.S. importers,” a spokesman said. “So we are talking tough to people who want to bring up the issue at all.”
That's nice talk coming from folks who have caused major disruptions in the U.S. cotton and textile industries. Numerous manufacturing plants in the Carolinas and Georgia have closed their doors, costing thousands of jobs.
The road he spoke of is the 10-year phase-out of the Multi-Fiber Arrangement. Nearly 70 countries — including Bangladesh — have asked the WTO to delay the quota expirations until it can review the impact of the phase-out.
Anyone visiting a J.C. Penney store lately knows Penney executives have plenty of troubles of their own. Many consumers who once shopped at J.C. Penney now do their buying at Wal-Mart where they can save a couple of dollars on a shirt or blouse.
Bangladeshi officials are taking notice of the threat. The American Manufacturing Trade Action Coalition says the former estimate 1.8 million to 2.5 million people work in textile and apparel manufacturing and another 8 million to 15 million in jobs tied to the sector.
The J.C. Penney flap is just one in a growing series of trade disputes involving what's left of the U.S. textile manufacturing industry, importers, retailers and the U.S. Department of Commerce.
In September, a group of U.S. retailers attacked a safeguard petition filing that sought to limit the growth of sock imports from China. Among other claims, the retailers said the petition should not have included cotton socks because they are already under an import restriction.
The Domestic Manufacturers Committee of the Hosiery Association filed the petition after China's socks shipments to the United States jumped from 1 million in 2001 to 22 million dozen pairs in 2003.
The petitioners said U.S. sock production dropped from 207 million dozen pairs to 166 million pairs after quotas on socks were removed under China's WTO accession agreement in 2001.
Retailers claim the petition, which has been accepted by the Commerce Department's Committee for the Implementation of Trade Agreements, unfairly lumps three types of socks into one quota category. Officials with AMTAC and textile makers disagree.
“Socks are socks,” said AMTAC's Jim Schollaert, noting that customers looking for hiking socks can choose from cotton, man-made fiber or wool socks.
You would think these disputes and the loss of manufacturing plants and jobs would be issue No. 1 or at least No. 2 in the Nov. 2 elections. But they're not. Instead of a debate on real issues, both parties seem determined to debate 40-year-old war records.
e-mail: flaws@primediabusiness.com
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