The National Council of Textile Organizations (NCTO) has endorsed President Donald Trump’s view that US trading relationships must be rooted in fairness and reciprocity – but has called on the Administration to include textiles in any laws or regulations that would strengthen “buy American” and invest more in recruitment and automation for the industry.
Speaking at the trade association’s ‘2018 State of the US Textiles Industry Overview’ in Washington this week, NCTO chairman William McCrary Jr outlined the growth of the country’s textile sector over the last year.
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In 2017, the value of US man-made fibre and filament, textile, and apparel shipments totalled an estimated US$77.9bn – an uptick from the $74.4bn in output in 2016 and an increase of 16% since 2009. US exports of these items were valued at $28.6bn – a near 9% increase in performance over 2016. Shipments to NAFTA and DR-CAFTA countries accounted for 54% of all US textile supply chain exports.
Capital expenditure was also healthy. Investment in fibre, yarn, fabric, and other non-apparel textile product manufacturing has more than doubled from $960m in 2009 to $2.1bn in 2016.
“The numbers show the fundamentals for the US textile industry are sound,” McCrary told attendees. “This is true even though some markets for US textiles and apparel were soft last year. For the most part, any sluggishness was due to factors beyond control, such as disruption in the retail sector caused by the shifting of sales from brick and mortar outlets to the internet. With that said, the US textile industry’s commitment to capital re-investment and a continued emphasis on quality and innovation make it well-positioned to adapt to market changes and take advantage of opportunities as 2018 moves along.”
McCrary praised Trump’s macro policy objectives of re-shoring industry, fighting for free but fair trade, enforcing US trade laws, making the US tax code more competitive, buying American, cutting unnecessary regulation, revitalising infrastructure, ensuring cheap energy, and fixing health care.
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By GlobalDataOn trade, he said the NCTO agrees with the President that US trading relationships “must be rooted in fairness and reciprocity” to benefit a broad swath of American society.
“America’s most important trading relationship is NAFTA, a pillar upon which the US-Western Hemisphere textile supply chain is built,” he explained. “At almost $12bn combined, Mexico and Canada are the US textile industry’s largest export markets. Moreover, Mexico provides vital garment assembly capacity the United States lacks at this time.
“Let me be clear. NCTO strongly supports NAFTA. That said, NCTO agrees with President Trump that NAFTA can and must be improved. NAFTA’s yarn-forward rule of origin contains loopholes that benefit third-party countries, such as China. Closing them would boost US and NAFTA partner textile and apparel production and jobs.”
McCrary further welcomed Trump’s view that the US has made a mistake by not prioritising trade enforcement in recent years – a subject he said the NCTO will make a point of emphasis in the coming months.
Moving forward, he said Congress needs to place a higher priority on reducing customs fraud in order to incentivise re-shoring – a practice McCrary noted was pervasive among non-market economies like China. He also urged swift enactment of the Miscellaneous Tariff Act, legislation providing duty relief on manufacturing inputs that are unavailable domestically and do not compete with other US-made products.
Other requests included the need to invest in improving automation for garment assembly due to its potential to re-shore US textile and apparel production and jobs, uninterrupted access to reasonably priced energy for the industry, and investment in the recruitment of new talent.
“Although the US textile industry is world-class, it cannot afford to rest on its laurels. There will always be intense and sometimes unfair competition from abroad, changing consumer demands and inevitable economic downturns,” McCrary said. “Fortunately, the Trump administration wants to spur manufacturing output and jobs, and it is incumbent upon the US textile industry to seize this generational opportunity to usher in a new era of growth.”
