December 13, 2002
The Honorable Howard Coble, Co-Chairman
The Honorable John Spratt, Co-Chairman
Congressional Textile Caucus
U.S. House of Representatives
Washington, DC 20515
Dear Chairmen Coble and Spratt:
In granting Trade Promotion Authority to the President, Congress insisted upon a coordinated, cooperative approach to trade negotiations. The undersigned organizations want to make you aware of our concerns with the U.S. proposal on industrial tariffs to be tabled in Geneva. If adopted, the U.S. proposal will unquestionably exacerbate already deteriorating conditions within the U.S. textile industry.
U.S. trade negotiators are proposing a “tariff free” world and have developed an aggressive proposal designed to reduce high tariffs faster than low tariffs and then phase out all tariffs by the year 2015. Unfortunately, this proposal would not end disparate tariff treatment, does not identify specifics on ending non-tariff trade barriers practiced by our competitors, would quickly end all tariff protection for many products currently produced by U.S. textile manufacturers, and does not address the trade-distorting impact of manipulated currencies, in particular the Chinese renminbi.
In developing a “same formula for all sectors” approach, our trade negotiators have ignored the dire situation confronting the U.S. textile industry. Since the end of 1997, employment in U.S. textile and apparel plants has fallen by 483,000 jobs. During this same period, the value of shipments from these industries fell $20 billion, a decline of 13 percent based on seasonally adjusted annualized shipments. This past year, 116 textile mills closed and almost 67,000 textile jobs were lost.
Textile quotas will be phased out completely in 2005, and competition in the U.S. textile market will intensify. The U.S. proposal would exacerbate this situation by immediately beginning to reduce or eliminate all remaining protection afforded the U.S. textile industry and its employees.
The proposal would also strip Mexico, Central America and the Caribbean, the Andean Region and Sub-Saharan Africa of the competitive advantages offered by current preferential trade programs. These regions make up the biggest current and potential export markets for the U.S. textile industry and employ millions of workers in the textile and apparel sector, almost all of them dependent on exports to the U.S. market.
However, their future as garment producers depends on their getting duty-free access to the U.S. market to offset the unfair advantages of Asian exporters, including exchange-rate manipulation, subsidies, intellectual property piracy and widespread customs fraud. This proposal would cause economic hardship and turmoil in dozens of countries close to the United States that benefit from tariff preferences.
Instead of offering to reduce U.S. tariffs immediately, U.S. officials should first insist that our competitors first reduce their tariff rates to levels equivalent to ours, require elimination of non-tariff barriers, which are being increasingly erected to block imports, and achieve reciprocal market access for U.S. textile products in foreign markets.
The U.S. should only contemplate additional reductions in tariffs applied to textiles once our competitors agree to reciprocal levels of market access.
The tariff proposal to be tabled by the U.S. would attain equivalency of tariffs by the year 2015. Unfortunately, 2015 will be about a decade too late to save many U.S. textile manufacturers as well as millions of workers abroad who depend on preferential textile trade programs.
American Cotton Shippers Association
American Textile Manufacturers Institute
American Fiber Manufacturers Association
American Yarn Spinners Association
American Sheep Industry Association
American Textile Machinery Association
Manufacture Alabama Textile Council
Georgia Textile Manufacturers Association
The Association of Georgia’s Textile, Carpet and Consumer Products Manufacturers
North Carolina Manufacturers Association
South Carolina Manufacturers Alliance
National Cotton Council