California Apparel News

The U.S. House has approved the Conference Agreement, a pro-textile measure that requires U.S. fabrics used under the Caribbean Basin Initiative (CBI) and Andean Preferential Trade programs to be dyed, finished and printed in the United States—adding closure to a loophole in the Trade and Development Act of 2000 and the Andean Trade Preference Act (ATPA), according to the American Textile Manufacturers Institute (ATMI) in Washington, D.C.

The measure is attached to a $28.9 billion supplemental defense-spending bill, which passed 397–32.

“We are extremely pleased that the final supplemental appropriations bill passed by the House today contains the language we have been seeking to require U.S. fabrics used in the Caribbean and Andean Trade Programs be dyed, finished and printed in the U.S.,” said ATMI chairman Van May.

House and Senate negotiators also recently approved the Trade Act of 2002, an act that includes Trade Promotion Authority (TPA), which grants the president power to negotiate trade agreements, the expansion of CBI and the African Growth and Opportunity Act (a law passed two years ago that extends duty-free benefits for apparel made with African fabric and yarn) and the renewal and expansion of the Andean Trade Preference Act.

Also included in the Trade Act of 2002 are benefits under the Trade Adjustment Assistance Act for workers who are displaced as a result of a company relocating its manufacturing facilities to a country that has a trade agreement with the United States.

The U.S. industry shed over 70,000 textile jobs last year. Passage of the Trade Act offers a limited amount of protection for marginal companies that have struggled with business in recent months, according to Scott Edwards, president of the Los Angeles-based Association of Textiles, Dyers and Printers.

For many manufacturers, producing in the CBI region offers many cost-effective solutions for businesses. Under CBI, fabrics are produced in the United States, then sent to CBI countries for sewing, and then sent back to the United States duty-free. However, many in the apparel industry felt that the guidelines for the trade agreements were too vague, particularly regarding dyeing, printing and finishing textiles.

Trade commissioner German A. Cerezo of the West Coast Guatemala Trade Office, which promotes trade and investment between Guatemala and the United States, said the recent ruling would likely have a multiple impact on production in CBI countries.

“It’s a shame that they had to come back and amend the law after it was already passed,” explained Cerezo. “For a while it allowed U.S. companies to dye their fabrics in CBI countries at low cost and still receive CBI benefits.”

Many CBI countries were counting on adding dyeing and finishing sourcing to their full-package programs, said Cerezo. “CBI will still offer full programs but we will have to use U.S. fabrics under new terms.”

The United States imported $9.5 billion in apparel from CBI countries last year, according to the U.S. Department of Commerce, Office of Textiles and Apparel.

In recent months, several U.S. manufacturers showed strong interest in establishing dyeing and finishing operations in the region; now they will most likely reconsider plans to open facilities in the area, said Cerezo.

That’s good news for U.S. textile companies that have been at odds with low production costs offered in CBI regions.

Until recently, many businesses were fearful of losing work as a result of greige goods being shipped to CBI countries to be dyed and finished.

Now, many U.S. textile business owners are rejoicing and reveling in their defeat.

Bernie Hodges, president of Wade Manufacturing Co., a dyeing, finishing and printing company based in Wadesboro, N.C., said his company is very pleased with the recent passage of the Conference Agreement.

Several textile mills in the Southeast relied on the U.S. textile lobby and its congressional supporters to come to their aid.

“Our congressman, Robin Hayes, has spent a lot of time on this, and we were delighted with the result he got,” Hodges said, adding, “In our industry we’re never out of the woods...there’s always new surprises or something that was left out of legislation.”

Knit fabric production decreased nationwide from 1.8 billion pounds in 1999 to 1.5 billion pounds in 2000, according to the U.S. Department of Commerce & Bureau of Labor Statistics.

Fred Salzman, sales manager at Kronfli Spundale Mills, a vertical knitting, dyeing and finishing operation in Vernon, Calif., said, “American mills finally have the advantage of dyeing and finishing. But there are still very few benefits for our industry as a whole.”

Now that the Senate has cleared the Conference Agreement, the bill is heading to the White House for the president’s signature, said ATMI.