Heritage Report Countered by U.S. Cotton

May 12, 2000

A new report from the Heritage Foundation claims the United States has done "little of substance" to liberalize its textiles and apparel trade. The National Cotton Council strongly counters that position, pointing to the likelihood that quotas will be eliminated on textile imports by 2005.

Reducing trade barriers further would enable U.S. consumers to purchase textile and apparel products at lower prices and promote economic growth in very poor countries that produce them, according to Aaron Schavey, policy analyst at the Center for International Trade and Economics at The Heritage Foundation.

"Regrettably, however, the United States has done little of substance to liberalize its textiles and apparel trade," he continues. "Consequently, some analysis predict that in 2005, when liberalization of this sector should be complete, over 90% of apparel products still will be eligible for a quota."

The United States either can further stall liberalization of textile and apparel trade by maintaining or increasing trade barriers, or it can adopt a "strong leadership role, demonstrating its commitment to trade liberalization by accelerating the reduction of quotas and the integration of its textile and apparel sector into the World Trade Organization and closely monitoring implementation of the (WTO’s Agreement on Textiles and Clothing)," according to Schavey.

"We read a lot about how protected the U.S. textile industry is," said Bill Gillon, general counsel, National Cotton Council. Yet, in 1999, the United States imported "well over 55% of all apparel purchased in the United States," some but not all made with U.S. cotton and wool.

"We’ve had a growing trade relationship with Mexico and the Caribbean, and within that relationship you see an increase in apparel made of U.S. components. But to somehow look at a sector that is 55% sourced by imports and claim it’s overly protected, I don’t see how you reach that conclusion," says Gillon.

Schavey cites hand-knitted wool sweaters from China as an example of needlessly increased costs to U.S. consumers. "The United States limits how many of these sweaters can be imported each year," he writes. "This limit raises the cost of each sweater by about $12, increasing the wholesale price by 38%." For cheaper products made of fabrics such as cotton, "the effects of the quota are more severe."

Gillon responds that the U.S.-China agreement calls for a five-year phase-out of quotas on Chinese textile products coming to the United States. "There’s no lack of commitment in the United States to honor its WTO obligations, and it’s incredibly surprising that anyone would look at the record and come to (Schavey’s) conclusion."

The United States did structure its phase-out of quotas under WTO so that the quotas on the most sensitive apparel articles phase out last, said Gillon.

Access a copy of Schavey’s article here.