Early next year, the global textile and apparel quotas will come to an end, the United States worry about clothing and textiles from China would flood the U.S. retail market, such concerns led the U.S. textile industry leaders and a chorus composed of members of Congress, and now even the Bush administration The officials also called on imports from China to take restrictive measures.

Although the end of quotas will change the structure of global competition, but U.S. response is not correct. U.S. textile and apparel industry is not despondent. Trade legislation, Congress will decide their fate, trade for U.S. manufacturers to create a new basis of competition.

The end of global quotas, the future of conventional clothing and textile industry The reason is simple: the exports from low-cost countries, especially China, will be full of the United States, in fact completely removed from the U.S. apparel and textile business. But through decades of research, we see the situation is entirely different. Over the years, with neighboring businesses and their trade relations, there are two factors that are rarely acknowledged link with the U.S. apparel and textile industry’s fate.

First, the U.S. imported a large number of apparel-producing countries are geographically close from the United States, not China, not other low-wage Asian countries. Last year, U.S. imports of Chinese clothing slightly less than 8 billion U.S. dollars, and from Mexico, Central and South America and the Caribbean countries import more than 16 billion U.S. dollars of clothing. When China and other countries suffered varying quota when the quota has not said out of all the difference.

As the delivery time is short, the U.S. imports come from neighboring countries. The current rule, Wal-Mart retail model requires apparel suppliers to update product by week. This pattern began in the 20th century, popular 90’s, therefore, from the U.S. market close on certain apparel products have the advantage of supply, clothing needs and delivery is made in a short time. This can give some explanation as to why the rest of the world where labor is cheap, the U.S. garment industry still exists. Cost is still a driving force, but the advantage would be near the source more and more important in the post-quota era, as retailers raise the threshold to require suppliers to respond faster and more flexible.

Secondly, although less than two months left in the quota will be over, but the numerous countries of apparel and textile tariffs will be a long time. Customs from different countries continue to increase the cost of imported goods, such as China. Mostly from Mexico and the Caribbean countries with zero tariffs on clothing products into the United States, if Congress approved the Central American Free Trade Agreement (CAFTA), mostly imports from Central American countries can enjoy zero tariffs. As retailers weak also sensitive to changes in cost, therefore, will be those approved CAFTA countries signed regional trade agreements to provide duty-free advantages, such as Mexico and Canada.

Affect the fate of the domestic manufacturers two factors have far-reaching because, Mexico and the Caribbean (as well as potential producers in Central America) production of textile fabrics used in clothing from the United States. 2003, U.S. textile exports to Mexico is equivalent to the value of U.S. imports from Mexico more than 30%. Conversely, in 2003 the U.S. textile products exports to China less than the value of clothing imports from China of 0.8%. Imports from Mexico and the Caribbean countries benefit the U.S. textile clothing production and employment.
Through technology investment, and domestic clothiers who provide local manufacturers of textile fabrics to survive, technology investments so that they get some of the world’s highest productivity. In addition, many manufacturers have been developing well-known brands, to create special products, such as Polartec. With the end of quotas, the survival of these enterprises will depend on their strengths, use their strengths to deal with ever-changing market demand. Similarly, even if the possession of tariff advantages, Mexico, Central America and Caribbean countries have adopted the clothing industry to improve the U.S. retailers and consumer feedback to maintain their market share.

Earlier this year, the Central American Free Trade Agreement signed (CAFTA), is awaiting Congress to debate, they imply the existence of neighboring countries and the United States near the source edge. During the debate, when the Central American Free Trade Agreement, Congress should also be an appropriate labor and environmental safety factors into a debate. But must ensure that agreements and related trade policy to reduce the hemispheric trade flows obstacles not only from tariffs but also from administrative and logistics issues, otherwise the purpose of CAFTA will be destroyed. If you do not do so, Congress will miss the U.S. manufacturing sector and workers to enhance the competitive advantage of existing opportunities.

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