Speaking with style: Kim Glas, US Department of Commerce
Kim Glas, deputy assistant secretary for textiles and apparel at the US Department of Commerce
The US is "well on its way" to expanding textile and apparel exports by 15% a year by 2014, particularly to Western trading partners in the Americas, according to Kim Glas, deputy assistant secretary for textiles and apparel at the US Department of Commerce. She tells just-style that shipments could rise to nearly $30bn in the next three years.
Kim Glas says exports grew 18% to $19.7bn in 2010, surpassing the National Export Initiative which aims to have all US industries grow exports by 15% a year over three years.
If the US meets its target for textile and apparel, exports could rise to nearly $30bn in three years.
Glas says exports to the Western hemisphere, chiefly Latin America and Canada, are a priority market for US manufacturers.
"Based on the growth we saw from 2009 to 2010 I'd say we are well on our way towards achieving that [National Export Initiative] goal," she says.
According to Glas, the US government is working to support textile and apparel makers in their efforts to boost exports under the National Export Initiative, whose goal is to enable manufacturers to grow and gain market share in international markets.
"US yarn and fabric manufacturers have many opportunities for growth right here in the Western hemisphere," Glas adds. "This is why the passage of our pending free trade agreements is so important."
Glass says Western hemisphere trading has a strong foundation and "is well positioned" to grow and create new jobs, boosted by US textile corporate investment, particularly with the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) countries.
Already, US sourcing contracts to Central America are rising strongly as many American manufacturers move away from rising costs and problematic supply in China and Asia.
Central American apparel executives say a handful of US manufacturers and retailers are placing new textile and apparel orders in the region, throwing producers into a scramble to ramp up production capacity in time for demanding delivery schedules.
Glass echoes other observers' views that sourcing is indeed witnessing a big shift from Asia to the Americas.
Smoothing the way
"Many companies are sourcing more apparel from the Western hemisphere for a variety of reasons: proximity and speed-to-market, communications, free trade agreements and trade preference programs, quality, and reliability," Glas explains.
"Sourcing has also become more cost competitive in the region as we've seen increased raw material prices and rising labour costs in Asia, as well as higher productivity in the Americas."
To smooth the way in this new trade corridor, the Department of Commerce has sponsored forum events to help large companies engage in discussions about how to improve sourcing in the region.
During the recent Sourcing in the Americas Summit and Pavilion in Las Vegas, it helped set up booths including over 90 companies from the US, Mexico, Central America, the Caribbean, Peru, and Colombia - the main US trading partners.
CAFTA-DR sourcing directory
Glass says the Office of the US Trade Representative (USTR) and the Inter-American Development Bank (IADB) have also set up a new online sourcing database and directory for the CAFTA-DR region. The service provides a comprehensive directory of companies offering products in the textile and apparel supply chain.
"It's a terrific project," Glas enthuses. "We hope to see the directory expand to cover other countries in the region or other industries."
Glas said the US hopes to soon strike free trade deals with Colombia, which has seen heavy delays, and Panama, as it continues to beef up its trade volumes with those countries.
These deals will follow a recent accord with Peru and of course the DR-CAFTA agreement, which has seen several problems and has been slow to deliver many of its benefits, though industry perception has become more positive regarding its value.
Glas says the US will continue to promote Western hemisphere (Latin America and Canada) sourcing as it enhances communication with the industry, its trading partners, apparel brands and retailers. But there are some challenges down the road, she concedes.
One obvious one is counterfeiting, which is a serious issue in Mexico and across Latin America, providing governments and law enforcement officials with new challenges every day.
In Mexico, for instance, counterfeit apparel accounts for more than 50% of the country's sales. And while textile officials are confident the rate will fall in coming years, they acknowledge there is still much to be done to police "phantom" firms that smuggle billions worth of fakes into the country from China and other Asian countries every day.
Glas said sealing the pending free trade deals with Colombia, Panama and South Korea will help tackle the problem.
"Each of these and our other free trade agreements include specific co-operation language for enforcing measures affecting trade in textiles and apparel to help prevent trans-shipment and circumvention of the rules of origin," she says.
"Increased customs cooperation with our key trading partners would provide US Customs and Border Protection with a greater ability to stop the import of counterfeit goods and identify potentially fraudulent preference claims," Glas adds.
But the deputy assistant secretary for textiles and apparel says another key challenge will be to promote Latin America as a viable place to do business for textile and apparel firms.
The creation of the DR-CAFTA directory was one way to do this, and the US government will continue to help expand these directories into other countries and industries to further encourage US-Latin American trade, Glas emphasises.
Asked how trade will develop between the US, Mexico and Central America, Glass said Mexico will likely remain an important partner for the US but acknowledged Central America has become a bigger supplier to the country.
Mexico saw exports to the US increase 7.4% in 2010 to $4.4bn so the nation is still an important trading partner of textile and apparel goods and remains the biggest single-country exporter.
Regarding the region's tarnished labour profile - particularly in Guatemala where the US has stepped up action to end slave and illegal labour conditions - Glas says "the government continues to work with regional governments to ensure the labour and environmental provisions of the trade agreements are properly enforced."
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