WORLD IMPORTS Textile industry braces for quota system's end
Many expect China will soon dominate garment-making industry.
CHRISTIAN SCIENCE MONITOR
American importers are calling it the "big bang" of clothing -- the scheduled end of a worldwide system of nation-based quotas on imports of textiles and apparel.
Implications of this change in the global trade system are huge -- so big, in fact, that some nations standing to lose from the deal appealed this week to the World Trade Organization in Geneva to launch an emergency process to stop or delay the removal of quotas.
The change, slated to take effect Jan. 1, is already spreading something close to panic in dozens of poor countries, especially in the Caribbean, Central America, northern Africa and Southeast Asia.
Millions of workers could be laid off, the bulk of them women who sit before sewing machines hour after hour, stitching together the jeans, blouses and shirts, underwear and other garments bought by Americans and Europeans.
In China, perhaps in India as well, millions could win new jobs as their garment business picks up.
The removal of quotas amounts to a massive transfer of jobs and wealth in the developing world over the next few years.
In Bangladesh, concern is especially strong. Some 300,000 to 800,000 garment workers could end up losing their jobs, estimates Fazlul Hoque, president of the Bangladesh Knitwear Manufacturers and Exporters Association.
"We have to face a big problem," he says. Chinese garment makers, he charges, are playing "unethical games."
So, without the protection of the existing quota system, Bangladeshi companies, including his own, are likely to lose many contracts for the production of clothing.
In the United States, domestic textile manufacturers face a similar challenge with the end of quotas and the likelihood of a new flood of inexpensive imports.
Some 600,000 jobs could be lost, reckons Karl Spilhaus, president of the National Textile Association. That's out of the current total of 702,000, a number much reduced in recent decades by foreign competition. Since January 2001, the nation has lost 344,300 textile and apparel workers. Just a year ago, Pillowtex went bankrupt, laying off 4,800 workers in North Carolina.
The "big bang" even has implications for the November elections. Most remaining textile companies are located in North and South Carolina, Tennessee, Georgia and Virginia, states that President Bush would like to win.
"There is clearly a political element," says Spilhaus, who hopes to see the end of quotas at least delayed. "We are not shy about using that. It is clearly an issue the Republicans need to address."
Textile companies have been distributing to their employees the positions on trade issues taken by the presidential candidates and their local congressmen -- and urging them to register and vote.
Spilhaus accuses China of "unfair and illegal practices" in its textile operations, of blocking some textile imports itself, such as upholstery materials, and of stealing designs and copying them.
On the other side, importers of foreign textiles relish the end of quotas. At stake is $83 billion of imported textiles and clothing, about $77 billion coming in under a 1974 international agreement called the "Multi-Fiber Arrangement."
Under this deal, the United States imposes numerical limits on the amount of textile goods Americans can import from each of as many as 58 nations. It covers some 2,400 specific products.
The end of that system "will be a big windfall for American consumers," predicts Laura Jones, executive director of the US Association of Importers of Textiles and Apparel, a trade group for 200 companies, including such retailers as J.C. Penney, Liz Claiborne, the Gap and the Limited.
Clothing prices could fall 11 percent to 20 percent, she predicts.
If past is precedent, Chinese garment makers could win much of the business that other nations once took away from U.S. apparel companies. Already, some 90 percent of apparel sold in the United States is sewn outside the country.
The potential change: Instead of seeing "Made in Honduras," "Made in Mexico," "Made in Taiwan," and "Made in Malaysia" on their clothing labels, American consumers may find "Made in China" almost exclusively on everything from jackets to running shoes.