Domestically focused to ensure a prosperous future for the US textile sector and globally driven to utilize the vast resources of its allies to establish a balanced and fair trading environment, The National Council of Textile Organizations (NCTO) is a unique association representing the entire spectrum of the textile sector. From fibers to finished products, from machinery manufacturers to power suppliers, NCTO is a broad based lobbying organization that represents the interest of the domestic textile industry in Washington DC and thus is the voice of the US textile industry. Mr Cass Johnson is the President of the National Council of Textile Organizations (NCTO) who, prior to joining NCTO, worked with the American Textile Manufacturers Institute (ATMI) for almost 13 years. Mr Johnson started at ATMI as an Assistant Director of international trade and left ATMI as interim President. During his tenure at ATMI, he worked primarily on bilateral and multilateral trade issues concerning the textile industry. These included the NAFTA agreement, the Uruguay Round agreements, the CBTPA legislation, the AGOA legislation and the proposed CAFTA agreement. He has also served as the principal industry Advisor during more than 45 bilateral textile negotiations, including those with China, Vietnam, Pakistan and India. At ATMI, he also produced major studies on textile market access, the impact of the quota phase-out, the textile crisis and currency manipulation. He has also represented the textile industry in hearings before Congress, the International Trade Commission and the United States Trade Representatives Office. He is a member of the ITAC-13 – the government trade advisory council that represents the textile sector. Mr Johnson has a BA in English from UCLA and an MBA from the same school. Commenting on various issues raised by Face2Face team, Mr Johnson describes the current state of US textile industry; the challenges that remain; and the contributions of NCTO in serving the cause of the US and the global textile industries.
Could you please describe the current state of US textile industry?
While the US textile industry is the third largest exporter of textile products in the world, certain sectors of the industry are facing difficult times. For example, US textile mills that produce yarns and fabrics for apparel saw significant shipment and employment declines last year. Other sectors, the industrial fabrics, nonwovens and specialty fabrics are doing better.
What according to you are the major factors for this?
The removal of quotas has allowed countries that heavily subsidize their textile and apparel exports to gain an unfair advantage in the global marketplace. Producers in these countries have taken market share away from the US industry's major export markets - the NAFTA and CAFTA trade preference areas - as well as other suppliers. As a result, US textile mills have lost business and have had to lay off workers.
While quotas were in place, the ability of bad actors to utilize unfair and illegal subsidies to dominate the market was held in check. With quotas either going or gone, these bad actors are now poised to take the lion's share of the world's textile and apparel trade. At NCTO, we are looking closely at how we can use US trade law and WTO rules to go after these subsidies themselves.
I am pleased to report that in recent months, the US government has taken a more aggressive stand on countries that subsidize their manufacturing sectors. Specifically, the government has agreed to self initiate dumping cases against Vietnam, if Vietnam dumps apparel in the US market. And, on a much broader and perhaps more significant level, the government recently overturned 20 years of precedent by agreeing to impose punitive tariffs because of Chinese government subsidies, including banking, tax and export subsidies, in a recent case on glossy paper. Both these actions are indicative, I think, of a rising tide of public concern in the United States about countries that don't play by the rules and use unfair trade practices to destroy American businesses and take American jobs.
Plants closures are making a poor reading of the industry in the United States. Where do you feel the US textile manufacturing sector is heading for?
As noted above, the prognosis for the sector is complicated. In the long run, the industry is doing what it needs to do in order to survive. The industry continues to invest heavily in new plants and equipment- in fact it invests 50 percent more than the other US manufacturers in new technology. And the industry continues to develop new products with more and more mills concentrating their efforts on higher value added goods.
Unfortunately, US textile mills all too often find themselves competing against foreign governments, rather than just foreign mills. That is a hard battle to win. China, for example, recently announced its eleventh Five Year Plan for its textile sector and the list of subsidies and hand outs its industry receives from the central government is a sight to behold.
A noted US economist and Nobel prize winner, Robert Samuelson, recently wrote 'It is not "protectionist"(I am a long-standing free-trader) to complain about policies that are predatory; China's are just that' and then went on to note that China's policies threaten to upend the entire post World War II trading system. So China is the wild card, not only for the textile industry in the US but for textile and apparel producers around the globe.
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.