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China textile threat eased

By Susan M. Andrews -- Furniture Today, January 22, 2006

Washington — Although the threat from China remains the top concern for U.S. textile mills, government-negotiated trade agreements have helped stabilize the domestic industry, according to the National Council of Textile Organizations.

In the NCTO's year-end review, Chairman Jim Chesnutt said that, despite the flood of imports from China that followed the quota phase-out on Jan. 1, 2005, the damage was mitigated by trade pacts like the three-year China textile agreement that will restrict imports in the industry's most sensitive categories.

"I am pleased to report that while the flood from China did indeed materialize — with imports up some 1,500% in sensitive categories — quick action by the U.S. government, in terms of safeguards, moderated the damage and even led to small production increases in the latter half of the year," Chesnutt said.

Following numerous plant closings and sharp job losses early in the year, U.S. textile production and employment began to stabilize soon after safeguards were imposed on China in May 2005.

Based on Department of Commerce numbers, five of the past six months have shown small production gains in the textile sector. U.S. textile shipments last year totaled $75.1 billion, only 2% off from 2004 figures. Moreover, textile profits rebounded, reaching $2.1 billion during the first three quarters of 2005, an increase of 65.1% over the same period a year earlier.

The industry still lost 11,300 jobs, but the decline was smaller than the 25,000 jobs that vanished in 2004. Textile employment at year's end was 399,900.

Chesnutt also said that, according to World Trade Organization figures, the U.S. textile industry has become the third-largest textile exporter in the world, overtaking Korea and Japan.

"We now ship product to more than 50 countries. And we continue to modernize and innovate. Figures show that annual industry investment in new plants and equipment totaled nearly $1.5 billion, an increase of 6%," he said.

Textile and apparel exports increased for the second year in a row, up 2.7% to $16.5 billion. "And despite Chinese currency manipulation and other subsidies, U.S. textile exports to China (including Hong Kong) increased by 10% in 2005, totaling $634 million," said Chesnutt.

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