The Economy

Textiles & Apparel: After Quotas, What?

Feb. 24, 2005

Companies wonder if they have a future in the U.S.

The 1974 international Multifiber Agreement is history. And with its expiration on Jan. 1, following a 10-year phase-out, quotas on textile and apparel imports are gone. What's next for the industry? No one can be absolutely certain. "If I knew exactly . . . I'd be a trillionaire," quips Frederick H. Abernathy, a professor at Harvard University and a principal investigator at the Harvard Center for Textile and Apparel Research in Cambridge, Mass.

One estimate is that Chinese garments and textiles could account for 45% to 70% of the world market, up from about 20% now.

However, for 2,465 WestPoint Stevens Inc. workers in the U.S., the future is now. They're losing their jobs as the West Point, Ga.-based home fashions company, which Jan. 20 filed a reorganization plan under bankruptcy protection, restructures its operations. Five plants are slated to be closed in late-March or early-April. "These closings and workforce reduction are directly related to the removal of textile quotas from low-wage countries," the company says.

Maybe -- and maybe not.

"We're going to see old industries like textiles closing plants anyway," says Elliot J. Feldman, a partner in the international trade practice at law firm Baker & Hostetler LLP. "If there had been no change in the international regime, we would see that fate in the same way that we saw shoe factories close in Maine 30 years ago.

"We [the U.S.] are still a modernizing economy. And in a modernizing economy, we will still be moving toward service industries. We'll still be moving toward higher technology. And in those things in which high technology isn't enough, we will be moving out of those activities."

Maybe -- and maybe not.

"There's always going to be a need for customized fabric manufacturing in this country," contends Anand Sharma, CEO of TBM Consulting Group in Durham, N.C. For example, supplying high-quality, monogrammed towels to Ritz-Carlton's luxury hotels "cannot be done from China or India," he says. "Rather than focusing on cost, cost, cost and trying to be competitive" with overseas competitors at the low end of the market, U.S. textile producers "need to look at responsiveness, customization, [and] customer intimacy -- understanding [customers] and trying to solve their problem, real or perceived," he says.

In the meantime, Feldman expects such groups as the National Council of Textile Organizations (NCTO) to be challenging the level of Chinese textile and apparel exports to the U.S. under the temporary "safeguard" provisions of the pact that allowed China to join the World Trade Organization in 2001. "These lobby groups are going to be pressing hard for protection. And they are going to get it -- to a large degree," predicts Feldman.

The NCTO expected to have a decision on the threat posed to the U.S. industry by Chinese exports of trousers, knit shirts, woven shirts and underwear by now. But a preliminary injunction issued by the U.S. Court of International Trade on Dec. 30, 2004, at least temporarily snagged those cases.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.