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NCTO lauds move to curb illegal textile subsidies
Oct '08
The National Council of Textile Organizations (NCTO) applauded a recent move by the United States Trade Representative's Office to challenge a number of subsidies that China provides to its textile industry as WTO illegal.

The action, which came in a letter from Ambassador Schwab to Chinese Minister Chen last week, begins a process which would result in WTO dispute cases being filed in Geneva if China does not eliminate the illegal subsidies.

NCTO also thanked Senators Elizabeth Dole and Congressman Robin Hayes for pressing the Administration to move quickly on the cases. NCTO President Cass Johnson said, “Senator Dole and Congressman Hayes were instrumental in moving these cases to the front of the line and the textile industry owes them sincere thanks and appreciation.

They are true friends of the textile industry and have time and time again worked on the industry's behalf to make sure the textile industry gets a fair shake in Washington.”

The Administration's effort to challenge these subsidies resulted from a request NCTO made on September 11, 2007 when it detailed 73 subsidies that China provided to its textile industry and asked USTR to review the subsidies for WTO consistency.

NCTO's own analysis showed that as many as two dozen of the Chinese subsidies appeared to be export contingent – export contingent subsidies are de facto illegal under WTO rules.

Johnson noted, “While we do not know which particular subsidies USTR is planning action against, many of the subsidies in the NCTO filing were of significant size, totaling in some cases hundreds of millions of dollars. Eliminating these subsidies could have a material impact on China's ability to export goods overseas at artificially low prices.”

Johnson added, “The U.S. government's action to challenge these subsidies makes it all the more important that the Bush Administration extend the textile monitoring program to China once the remaining safeguards are removed on January 1st.

The monitoring program is an essential because it will give the U.S. government the tools necessary to act quickly if China surges into the U.S. market in 2009. The last time safeguards were briefly removed, Chinese textile and apparel exports surged 600 percent and tens of thousands of U.S. textile jobs were lost. “

Key Facts about U.S Textile Industry:

• One of the largest manufacturing employers in the United States, the overall textile sector employed over 700,000 workers in 2007. Textile mills alone employed 319,000 workers.

• The 3rd largest exporter of textile products in the world – more than $16.5 billion in 2006.

• Nearly two-thirds of U.S. textile exports during 2007 went to developing countries. The U.S. textile industry exported to more than 50 countries, with 20 countries buying more than $100 million a year.

• Supplies more than 8,000 different textile products a year to the U.S. military.

• U.S. textile shipments totaled $68.5 billion in 2007.

• Invested more than $9 billion in new plants and equipment from 2001 to 2006.

• Has increased productivity by 50 percent over the last 10 years and ranks second among all industrial sectors in productivity increases.

• In 2007, textile workers on average earned 136% more than clothing store workers ($524 a week vs. $222) and received health care and pension benefits.

National Council of Textile Organizations

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