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By Devin Steele
CHARLOTTE, NC — The Bush Administration will make or break the U.S. textile industry with its actions on trade over the next 3-1/2 years, according to Cass Johnson, president of the National Council of Textile Organizations (NCTO).
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“They are fully capable of breaking this industry and not shedding a tear,” said Cass Johnson, NCTO president.
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So it’s imperative that textile interests work as an ally, not an adversary, with the White House to push its agenda, keynoter Johnson told members of the Textured Yarn Association of America (TYAA) during their Winter Conference at Lowe’s Motor Speedway on March 15.
“They are fully capable of breaking this industry and not shedding a tear,” he said. “This is a very tough administration. It has a Republican Congress behind it. It is willing to work with the textile industry. But it is insisting that we work with them, too, that we not be a constant thorn in their sides.”
Johnson added that his organization likewise wants to work with the administration.
“NCTO has said, ‘we want to be constructive with you, and we realize we cannot get everything we want but we need to get some important things,’ ” he said. “So we have established a very constructive but frank dialogue. I have seen this administration turn its back at times on this industry, with devastating results. We cannot let that happen again. It’s an essential opportunity for us to establish some ties and get some results out of this administration.”
Johnson was among five conference speakers, whose presentations covered the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), the nonwovens market, the China polyester market and textured yarns in automotive fabrics.
The NCTO head spent a good amount of time on the elephant in the room, or in this case, the dragon — China, of course.
Calling it “China, Inc.,” he noted that China’s textile and apparel sector employs directly or indirectly 90 million people. Its apparel sector makes 20 billion garments a year and, citing China’s government, is capable of clothing every person in the world with five garments, he added.
“It is an astounding development and it has not happened by chance,” Johnson said. “It is a planned development. Nearly 15 years ago, China began a series of three five-year plans, at the end of which its aim was to become the dominant textile and apparel supplier in the world.
“It was a government-motivated plan. It directed immense resources from the government into the industry. Suffice it to say they are now near the end of their plan and, for all intents and purposes, it is working very well. Their production expanded 27 percent last year — and they were already the largest textile and apparel producer in the world.”
Much of its plan to dominant the world in manufacturing is through nefarious means, such as pegging its currency about 40 percent below the dollar, he added. So the need for action is clear, he stressed.
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Steve Charron (L) of PAF Sales and Jennifer Pearce of Universal Fiber Systems examine a garment made from nonwovens fabrics, passed around by speaker John Hagewood of the Nonwovens Cooperative Research Center. |
The goal of NCTO and allied groups is to try to keep China restrained in the post-quota world through 2008, when the World Trade Organization’s textile safeguard mechanism expires. Longer term, the group wants to initiative permanent safeguard development in the WTO’s Doha Round.
He also updated attendees on currently filed safeguards, saying the textile industry has urged the administration to self-initiative safeguards based on import data already released.
The NCTO has three strategies for success, Johnson said: 1) to develop worldwide coalitions; 2) to motivate Congress to get involved; and 3) to reach out to the administration. He urged TYAA members to get involved in the NCTO by joining, becoming engaged with legislators and initiating or participating in grassroots efforts.
Other speakers
Jane Johnson, manager of governmental relations for Unifi, Inc., offered a brief update on certain trade deals and an in-depth look at DR-CAFTA, which is expected to come up for a vote in Congress this year. She concurred with Johnson that the tone in Washington is changing, vis a vis its relationship with the domestic textile and apparel industry.
“They really want to work with the textile and apparel industry,” she said. “They want our support. They feel like they have been negotiating these agreements with yarn-forward and fabric-forward provisions. And they have taken a very tough, new stance of wanting our support if they’re going to continue with the yarn-forward provisions in future free trade agreements.
“They have a free trade agenda and they’re going to have it for the next three years and I don’t see anything standing in the way of that other than the U.S. trade deficit.”
As such, DR-CAFTA is the administration’s top trade priority, Johnson said, adding that it is the linchpin for future trade deals. She also explained exceptions — cumulation, trade preference levels (TPLs) and single transformation — that have made much of the U.S. textile and apparel industry hesitant to get on board with the deal.
She pointed out that the pact already has been ratified by the governments of three participating countries, so the likelihood of a renegotiation is unlikely.
Meanwhile, John Hagewood of NC State University’s Nonwovens Cooperative Research Center (NCRC) presented a close look at the nonwovens sector, noting that it is a $50 billion market, including $11 billion in roll goods. About 60 percent of nonwovens are disposable, which helps make the U.S. their largest market, as Americans are more likely to throw away products, he said.
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John Hagewood of NRCR |
The U.S. leads the world in technology and investment in nonwovens, he said. More than 550 nonwovens manufacturers are based in the U.S., employing more than 160,000 people and with annual sales of more than $40 billion, he added. North Carolina leads the nation with 32 nonwovens producers.
Nonwovens are resistant to import pressures because shipping costs exceed production costs, in most instances, he added.
In his report on China’s polyester market, Alasdair Carmichael of PCI Fibres & Raw Materials reported that China experienced a difficult 2004, with prospects for 2005 no better. The rate of capacity expansion has exceeded the need for production, he said, noting that the utilization rate is less than 70 percent.
Carmichael showed data indicating that U.S. producer shipments of synthetic fiber was only 10 percent lower last year than its peak year of 2000.
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Chris Heard of Milliken & Co. |
“That tells me that there is still a business out there,” he said. “There is going to be a synthetic fiber business — particularly for nonwovens, carpet, industrial fabric and automotive products.”
Chris Heard, director of Development for Milliken Automotive Fabrics, Milliken & Co., reviewed applications of textured yarns in automotive upholstery fabrics. He offered a ranking of major auto manufacturers and a forecast for 2008.
For textured yarn makers and others, innovation is the only sustainable business strategy, he said. As such, producers should stay engaged with the world at its evolution and develop innovations with a number of key attributes, such as cleanable surfaces, safety, a soft touch, stretch and eco-friendliness.
