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End of Quotas Could Change World Textile Industry


On January 1, the complex web of quotas that has for 40 years regulated the world textile and apparel trade comes to an end. While consumers may welcome lower prices, the U.S. textile industry feels its future is threatened.

It's not only American producers who feel threatened. Industry experts say that as highly efficient China and India exert their power in the market, the first to suffer may be producers in Southeast Asia, Africa and Latin America.

But in the American textile producing states of North and South Carolina there is deep pessimism. Dozens of plants have closed in recent years and far more dislocation is anticipated. Jim Schollaert is a spokesman for the American textile industry. He says as many as two-thirds of the remaining U.S. textile jobs could be lost.

"Depending on how successful our efforts are in invoking some protection against predatory trade practices, we could lose as many as 500,000 jobs in short order, in the course of 2005," said Jim Schollaert.

U.S. textile producers are pushing the Bush administration to invoke a safeguard provision that would limit the growth of U.S. textile imports from China to 7.5 percent this year. Chinese textile sales in the United States rose more than 30 percent in 2004.

Mr. Schollaert is dismissive of recent Chinese promises to exercise restraint in textile exports.

"Even the Chinese admit that they [these new administrative measures] will not have much effect," he said. "We're talking about minuscule little export taxes which will be imposed totally under the control of the Chinese and, of course, any revenues they collect will go to the Chinese government."

Others are not as pessimistic about the future of the U.S. textile and apparel industry. They say that domestic producers benefit not only from a location adjacent to their market but also from modern plants that can quickly change output to suit market demands.

Experts do tend to agree that dramatic change in the global industry is unlikely to be apparent for another three to six months. Producers and importers, they say, are unlikely to make decisions that could create sudden dislocation.