Quotas would force supplier countries to compete for a share of the US market

Quotas would force supplier countries to compete for a share of the US market

For those old enough to remember, three letters invoked fear and loathing across the global textile industry: M-F-A. And Robert Antoshak, managing director at Olah Inc, is concerned those letters are more than simply an abbreviation for the long defunct Multi-Fibre Arrangement – but may be a harbinger of the future.

Call me an alarmist, but I worry import quotas could return. I'm not kidding. With all of this tough talk emanated from the American president-elect Donald Trump about restricting trade, I wonder if he'll use textiles as the poster boy for rolling back globalisation.

Trump ran on a campaign to roll back globalisation and return manufacturing jobs to America. I don't think a resurrected MFA would accomplish that, but it sure would look good in newspaper headlines and would play well with his supporters.

Think about it. Textiles are perhaps the most pervasive industrial products in the world. They're everywhere, from our clothes to our homes and even in our cars. Indeed, the industry's very ubiquity leaves it highly vulnerable to disruption. Supply chains wrap around the globe, and every man, woman, and child interacts with textiles every single day. Gosh, if one wanted to make a statement about globalisation, what better way than to bring back quotas. I shudder when I consider the implications.

Many people say that there's no way the MFA would ever come back, but there were many more convinced Donald Trump would never become president. It's hard to discount what he's capable of stirring.

Textiles have always held a unique place in the trade world. And these days are no exception. In fact, textiles could provide Trump with the high-level kind of exposure he seems to crave. Why piddle around with 45% tariffs, when he could go the full monty, and unilaterally institute quotas around the world – and by default force supplier countries to compete for a share of the US market?

Of course, such an action could signify the beginning of the end of the World Trade Organization (WTO), but that would fit nicely into his desire to roll back trade.

For sure, Trump could always raise import tariffs and use that revenue to help pay for an infrastructure plan. He could also claim that Mexico in effect paid for his infamous wall, although many US companies and American consumers would, in effect, pay the duties, which would be irrelevant when the real mission is to gain headlines.

Moreover, instead of merely entering into a series of one-off trade spats, Trump may find it would be easier – and higher profile – in the long run to just bring back the MFA (or something like it) from the dead and claim mission accomplished on trade.

And there are some economic realities upon which he will need to contend with upon entering the White House. Most prominent will be a stronger US dollar. He said he'd roll back trade and bring back jobs, but that will become far more challenging if a stronger dollar makes imports cheaper for consumers.

What to do? Slap on quotas, of course.

Trump's nominee for Commerce Secretary, Wilbur Ross, is the former owner of spinner and weaver International Textile Group (ITG) – which owns Cone Denim and Burlington Industries. He knows a thing or two about textiles. And Trump will reportedly grant Ross greater powers in trade negotiations than had previously been the case.

So, Americans would go back to sitting behind sewing machines in the age of uncertainty, popular revolt and demagoguery. It's a grim vision.

In a very real sense, the MFA set the stage for globalisation. If it resurfaced in some form today, it would signify the end of globalisation. An ironic turn of events.

The MFA quota regime helped to raise costs for consumers in importing countries while limiting employment opportunities for workers in exporting countries. Despite the MFA, the old industry doesn't exist anymore. What's left to protect?

Only Donald Trump's desire for the next headline.

About the author: Robert P Antoshak is managing director at Olah Inc, a New York-based global textile and apparel development and marketing firm that supplies US companies with denim, corduroy and piece-dyed fabrics. It is also producer of the Kingpins denim shows.