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China:Hope from countries closer home may provide major textile gains |
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2004-11-23
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‘Misplaced fears’ is what can be termed for Chinese manufacturers swamping US with textiles and apparels when the Multi Fibre Agreement comes to an end next year. Not all is lost for the US textile industry what with Bush administration the Bush administration calling for limits on Chinese imports. “No way,” say some industry experts who state that the fate of these industries depends very much on trade legislation pending in Congress, which could create a new foundation for American manufacturers to compete.
Agreed that Chinese products would swamp the U.S. apparel and textile markets, but on the other hand shouldn’t the industry look for long term gains from relationship being built with our neighbors and to through our trade relations with them.
Point to be considered as per their contention is that majority of American apparel imports come from countries closer to home rather than China and other low-wage Asian nations. Commenting that the United States imported a little less than $8 billion of apparel from China last year, more than $16 billion was imported from Mexico, Central America and Caribbean countries. Doesn’t this require explanation from all those who are crying wolf.
Strategic location means reaching the self’s in American stores even faster than their Chinese counterparts for the American neighbors. Imagine Wal-Mart which dominates retailing scene having to replenish stocks from Chinese suppliers having a specific delivery schedule on a weekly basis.
FTAs or Free trade agreements among American subcontinent neighbors can overcome the situation very easily according to experts. With tariffs continuing to pad up substantial costs to the value of goods imported from different parts of the world, such as China, apparel products from Mexico and the Caribbean arrive in the United States tariff-free, as will most imports from Central America if Congress ratifies the proposed Central American Free Trade Agreement. This provides vital cost differentials for small retailers taking the advantage from countries covered by regional trade agreements that eliminate tariffs - as NAFTA does for Mexico and Canada.
All agreements like NAFTA and CAFTA can be exploited to fullest enabling local textile manufacturers set up linkages through use of latest technology, allowing them to achieve some of the highest productivity in the world. In addition, many producers have developed significant brand recognition, creating distinctive products such as Polartec. With the coming elimination of quotas, survival will depend on possessing those characteristics and using them to respond to volatile market demand. Similarly, the apparel industries in Mexico, Central America and the Caribbean will only maintain their position - even with tariff advantages - by continually improving responsiveness to U.S. retailers and consumers.
In the end Congress has been called upon to reduce the barriers to hemispheric trade flows arising not only from tariffs but also from administrative and logistics barriers that will otherwise undermine CAFTA''s intended effects. Otherwise, Congress will miss the opportunity to enhance one of the remaining advantages for U.S. manufacturing industries and their work forces, they say. |
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