THE NATIONAL COUNCIL OF TEXTILE ORGANIZATIONS REPRESENTING THE ENTIRE SPECTRUM OF THE U.S. DOMESTIC TEXTILE INDUSTRY
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1 THE NATIONAL COUNCIL OF TEXTILE ORGANIZATIONS REPRESENTING THE ENTIRE SPECTRUM OF THE U.S. DOMESTIC TEXTILE INDUSTRY Mike Hubbard American Sheep Industry Association January 24, 2014
2 THE NATIONAL COUNCIL OF TEXTILE ORGANIZATIONS Mobilizing Support for the U.S. Textile Industry in the 21 st Century The National Council of Textile Organizations (NCTO) is a unique association representing the entire spectrum of the textile industry. From fibers to finished products, machinery manufacturers to power suppliers, NCTO is the voice of the U.S. textile industry. There are four separate councils that comprise the NCTO leadership structure, and each council represents a segment of the textile industry and elects its own officers who make up NCTO's Board of Directors. Fiber Council membership represents domestic textile denier fiber producers Yarn Council membership represents domestic yarn manufacturers Fabric & Home Furnishings membership represents domestic manufacturers of fabric, including woven, knitted, non-woven, tufted, braided or other, and home furnishings Industry Support includes textile distributors; converters, dyers, printers and finishers of textiles; and suppliers of products and services to such fiber and textile entities
3 U.S. TEXTILE INDUSTRY SNAPSHOT From textile fibers to apparel, industry employed 499,000 workers in 2012 Textile companies alone employed 235,000 workers The U.S. government estimates that one textile job in this country supports three other jobs U.S. textile shipments totaled more than $53 billion in 2012 The U.S. textile industry is the third largest exporter of textile products in the world. Exports of all textile products exceeded $17 billion in Total textile and apparel exports were a record $22.6 billion in 2012 The U.S. textile industry invested $17.7 billion in new plants and equipment from 2001 to And recently producers have opened new fiber, yarn and recycling facilities to convert textile waste to new textile uses and resins
4 Million Dollars U.S. EXPORTS OF WOOL/ANIMAL HAIR FIBER AND TEXTILES Woven Fabric Yarn Processed Fiber Fiber YTD 2013 YTD
5 Million Dollarss U.S. WOOL APPAREL IMPORTS (IN DOLLARS) 4,500 4,000 3,500 3,000 2,500 2,000 1,500 ROW TPP 11 China 1, YTD Nov 2012 YTD Nov 2013
6 Billion Square Meter Equivalents TEXTILE AND APPAREL IMPORTS FROM TPP YTD 7/12 YTD 7/13 No FTA Currently Current FTA Partners
7 Current TPP Negotiating Partners now include 12 countries: Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam Agreement will be opened for additional countries to dock after it is negotiated This is the most critical time of the TPP negotiations because the most difficult and sensitive items, including textiles, are being negotiated NOW. Target conclusion date: End of 2013 Early 2014 TPP NEGOTIATIONS: SO FAR
8 CURRENTLY UNDER DISCUSSION Vietnam demand for a cut-and-sew rule steadfastly resisted by U.S. government issue still unresolved after 20 rounds A yarn forward rule with unnecessary exceptions would be a big problem Vietnam wants a Single Transformation ROO to source yarns and fabric from China How much and how fast to cut import duties Vietnam wants large tariff reductions and tariff phase outs immediately Customs enforcement rules State-owned enterprises and government intervention in markets The Short Supply list
9 SECONDARY IMPACTS OF A BAD AGREEMENT Job & Production losses leave industry politically crippled in Washington, leading to cascade of events: Long time efforts by importers to cut tariffs are successful: Bangladesh, Cambodia and other LDC countries get duty free access for apparel Preference Reform bill that gives developing countries duty free access for single transformation Berry Amendment is eliminated as industry capacity declines and political strength erodes Textile and apparel tariffs are reduced from same level as other industrial products (<2 percent) succeed. O'ROURKE GROUP PARTNERS LLC
10 VIETNAM TEXTILE INDUSTRY Despite some privatization, industry goals are still directed by the government Employs 2.5 million workers, 10% of Vietnam s industrial workforce World s Eight Largest Garment Exporter $16 billion 2 nd Largest Textile and Apparel Exporter to the U.S. - $7.6 billion (2012) DON T ASSUME THIS IS ALL APPAREL over $400 million was manmade fiber textiles and non-apparel finished products
11 TAAT Coalition 31 countries TPP CAMPAIGN Letter from House to USTR supporting key negotiating positions for textiles and apparel SIGNED BY 168 MEMBERS OF CONGRESS! Over 100,000 petition signatures! Over 24,000 online messages to congress and the administration! 2,912 Facebook likes! Briefings with Administration officials and foreign negotiators Merger of NCTO, NTA, and AMTAC a direct result of industry coming together to achieve TPP goals GET INVOLVED! Visit Like
12 NEXT STEPS Negotiations will continue at a rapid pace; target date to conclude talks is now early 2014 Unknowns: Will Congress pass Trade Promotion Authority Legal scrub will details emerge that will require further negotiation to resolve When will Congress vote, and will it pass as negotiated How many countries must approve TPP before it takes effect
13 ON THE HORIZON: TTIP Proposed free trade agreement with the European Union: Transatlantic Trade and Investment Partnership First round of talks held last July; third round to be held in March
14 TTIP ISSUES Rules of origin yarn forward versus double transformation Speed of duty elimination for sensitive products Regulatory differences Will trade benefits expand beyond the EU 28?
15 Million Dollars IMPORTS FROM THE EU 28 1,200 1, Non-apparel Apparel YTD Nov 2012 YTD Nov 2013
16 Million Dollars 12 EXPORTS OF WOOL FIBER AND TEXTILES TO THE EU Woven Fabric Yarn Processed Fiber Fiber YTD Nov 2012 YTD Nov 2013
17 2014 A BUSY YEAR IN TRADE TPP and TTIP are the biggest trade issues in 2014 Size and scope of both agreements will impact every market TPP countries might take significant production of wool apparel and end products from China but who will supply the fiber, yarn, and fabric? TTIP will offer duty free access for U.S. fiber, yarn, and fiber. A yarn forward rule will expand market opportunities, but a double transformation rule will limit opportunities Stay informed and engaged details matter in trade agreements, and industry involvement is the only way to obtain a good agreement
18 Mike Hubbard 469 Hospital Drive, Suite C Gastonia, NC mhubbard@ncto.org
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