The U.S. Textile Industry: Problems and Opportunities Greensboro Triad Textile

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UPDATE Quota Phase-out Textile Safeguard
NCC Asheville Meeting July 20, 2004
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Presentation

• 1. China and the Quota Phase-out -
• 2. How to Counter
• 3. Strategy
• World Pressure
• Hill Pressure
• Administration Outreach
• 4. Final Attempt
• Voter Education Campaign - Grassroots Pressure
• 5. Coming Up.

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Study Chinas Share of Apparel Removed From
Quota in 2002
30 months time - 72
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China with Quotas in Place
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China 30 Months Later
China drops prices 53
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Predictions Chinese share
Cotton Sourcing Summit Survey Miami 87 said 50 90 43 said 75 - 90
Past experience other markets - apparel Australia and Japan 70 77
Quota removed categories (as of June 04) 72
WTO Study (no recent data) 56 (China India 71)
Analysis Similar products 70 85
McKinsey Study DHL Study 50 (safeguards)
ITC Study Supplier of Choice
World Bank Study (no recent data) 50
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US Textile Cotton Consumption(mil bales)
Remnants Non-wovens, carpeting
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How to Counter China

• Government to use the threat of market
  disruption track of WTO safeguard clause to keep
  China under control until 2008
• Aggressive use of trade remedies to go after
  Chinese and other countries unfair trade
  practices post 2005

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China WTO Textile Safeguard

• Takes until Aug 1 to get a decision lasts only
  until Dec 31.
• Process starts over again in January 05
• 5 month safeguard each year

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Threat Case

• File prior to China going off quota decision in
  January.
• Under threat, China will held to 2004 quota
  levels plus 7.5
• Will force China to the table to negotiate a
  comprehensive agreement covering the next three
  years.

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Government on using Threat

• Big Confrontation with China / importers and
  retailers strongly oppose
• Refused to consider in previous safeguard actions
• Not released criteria to even file a case

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Industry Strategy

• 1. Worldwide Coalition
• 2. Hill Pressure
• 3. Grassroots Campaign

Gov. Restrains China Using Threat
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World Wide Pressure

• Global Alliance for Fair Textile Trade (GAFTT)
• Begun March 2004
• Now 102 trade groups from 51 countries
• Events in Istanbul, Johannesburg, Kampala,
  Brussels and Geneva
• www.fairtextiletrade.org

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Growing Global Effort

• 9 countries have announced at WTO that something
  must be done about China Mexico, Turkey,
  Bangladesh, Indonesia, Sri Lanka, Mauritius,
  Nepal, Dominican Republic, Madagascar
• 30 million jobs are predicted to be lost
• Concerns about economic dislocation, instability,
  increased poverty, terrorism

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WTO to meet Oct. 1st

• Council on Trade in Goods
• More countries expected to speak up
• Make sure that they support use of threat
• Increase pressure on White House to act on
  developing countries behalf

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Hill Pressure

• Two letters on China and safeguards over 100
  signatures on each
• Unity DAY- July 20th over 100 textile
  executives visited more than 40 offices to talk
  about China
• High level meetings with DOLE and BURR to plan
  strategy re White House

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Administration Outreach

• 4 attempts (NCC, NCTO) to meet with
  Aldonas/Commerce over China CAFTA since January
  
• First meeting took place last week to begin to
  discuss criteria for threat
• Meeting w/Zoellick warning over confrontation

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Outreach to White House

• Gant has used personal channels
• Burr has called twice
• Dole has met with Zoellick and called White
  House. Also wrote to Powell.
• Zoellick has called twice
• Aldonas has now called
• NO RESPONSE TO DATE

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Final Attempt

• Voter Education Campaign
• Targeted on Trade and Loss of Jobs Overseas N.
  Carolina heavy S. Carolina
• Ramp Up Over Time Billboards then Radio
• Can be stopped at any time

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Stop Sending Jobs Overseas Change Trade Policy
Now RegisterVote! www.myjobcounts.org
Change Trade Policy Now
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Grassroots Portion

• Textile coordinators in every plant
• Voter registration drives
• 4 major rallies
• Website www.myjobcounts.org
• Editorial boards/leafleting/letters to
  editor/billboards/bumper stickers

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Coming Up

• Ask for major trade groups to help fund support
  grassroots campaign
• Campaign ramp up to begin soon after Labor Day
• Industry likely to file dozens of petitions late
  September/early October
• GAFTT to have major summit in Geneva prior to
  Oct. 1st meeting.