It’s been a rough patch for the textile industry.
The number of textile jobs in Rhode Island has plummeted from 7,600 in 1997 to 5,200 in October. At least five textile mills have been shuttered in Rhode Island and southeastern Massachusetts since 2000, mirroring the situation nationally, where 150 textile mills have closed, taking with them 67,000 jobs, according to the American Textile Manufacturers Association (ATMA).
The main culprit: U.S. trade policy, according to George Shuster, the outspoken president of 178-year-old Cranston Print Works.
To beat back what he says could be extinction for the U.S. textile industry, Shuster last spring co-founded the American Textile Trade Action Coalition (ATTAC), along with one of the country’s wealthiest men, Roger Milliken of South Carolina textile giant Milliken & Co., and UNITE, the textile industry’s powerful union.
ATTAC (not ironically pronounced “attack”) serves as the more-combative answer to old-line lobbying groups like the ATMA.
“Their approach is one of appeasement and compromise,” Shuster said of most other manufacturing-trade groups. “They will take some stupid trade proposal that’s 100 percent bad for U.S. manufacturers, tweak it a little bit, and then call it a gigantic triumph. But we’re not going to compromise.”
The group is out to dispel the “myth” that America is a protectionist nation that needs to loosen its trade barriers. In reality, U.S. tariffs are among the lowest in the world, ATTAC says, allowing imports to run roughshod on domestic textile makers.
It is a longstanding complaint among U.S. textile and apparel makers, but ATTAC stands out for its hard-line approach.
It opposes just about every free-trade proposal, including NAFTA, normalization of trade relations with China and the proposed Free Trade Area of the Americas, which would tear down tariffs for nearly the entire Western Hemisphere by 2005. Still, the clout of its organizers has helped garner plenty of attention among Washington lawmakers, especially those from large textile states, according to industry trade publications such as Women’s Wear Daily.
But an executive at another local textile manufacturer has a polar opposite view of U.S. trade policy.
“If there is criticism to be leveled at U.S. trade policy, it is that it hasn’t been aggressive enough,” said Larry Liebenow, president and CEO of Quaker Fabric Corp. in Fall River and chairman of the U.S. Chamber of Commerce’s board of directors.
For too long, Liebenow says, textile manufacturers have relied on American tariffs and quotas to protect them from cheap imports. But as free-trade programs such as NAFTA have taken hold, many textile mills have failed to respond by adding value to their products.
“You cannot simply be a commodity and expect to be successful in the U.S. market, given its cost structure,” Liebenow said.
Liebenow contends that lowering trade barriers presents textile makers with new market opportunities – even if it’s more expensive to produce in the United States. He points to Italy, with a cost structure equal to or greater than the United States, as the second largest exporter of textiles and apparel in the world.
He added that 500 Quaker Fabric workers in Fall River owe their jobs entirely to the company’s exports, which account for 15 to 20 percent of its overall revenues.
Leonard Lardaro, an economist at the University of Rhode Island, agrees that textile manufacturers must differentiate themselves and improve products in order to survive. That, though, inherently leads to job losses.
Lardaro said, “The textile industry has had to transform itself through technology and improved productivity in order to compete.” The result, he said, is fewer – though better-paying – jobs.
Shuster scoffs at the notion that the U.S. textile industry and other manufacturers have essentially fallen asleep at the wheel while foreign countries have invaded their turf. He says that 18 out of the United States’ 22 major manufacturing sectors now face trade deficits.
“I find it hard to believe that all these U.S. manufacturers have become stupid and lazy all at the same time,” he said.
Shuster said Cranston Print Works, which claims to be the country’s oldest textile printing company, underscores how U.S. trade policy has hog-tied textile manufacturers. Back in 1991, the company had 1,800 employees and was flourishing as a supplier of fabric to U.S. clothing makers.
There was just one problem: Its customers in the United States couldn’t compete, squeezed by cheap apparel imports from low-wage countries like Mexico and Hong Kong. Eighty percent of its customer base disappeared during the 1990s, Shuster said. Although it has diversified into paper chemicals and transportation, the company’s work force has contracted to 500.
ATTAC and the U.S. textile industry appear to face an uphill battle. Quotas on textiles and apparel imports are expected to disappear in 2005 – the same year Chinese goods are expected to flood the market as a result of loosened trade regulations.
But Shuster sees a glimmer of hope in President Bush’s recent proposal to have all nations tear down trade tariffs by 2015 (see Page 13). Shuster said the plan has the potential to finally level the playing field between U.S. manufacturers and those of other countries. He cautions, though, that it also must eliminate “non-tariff barriers” – excessive red tape and other stumbling blocks that countries throw up to protect domestic interests.
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