Transcript The U.S. Textile Industry: Problems and Opportunities

ATMI Review
Life Post - 2005
China: How Big A Threat?
Conference on the Future of
Textiles and Clothing
May 5-6, 2003
China – How Big a Threat?
Review: China Growth in Quota DeControlled Categories

• All apparel categories
• Sensitive apparel categories
Review: Chinese trade in similar product
areas



Why the China edge?
What can be done about it?
ATMI Analysis:
Decontrolled Apparel Categories

ATMI analyzed Chinese growth into US
market in all 29 apparel categories
removed from quota control on January
1, 2001

Key point: First time China is
competing head to head without quotas
with everyone else – Vietnam,
Bangladesh, India, Mexico. . .
Average Price Per Square Meter
Pre and Post Quota Removal
2001
2002
Change
China
$5.79
$3.24
- 44%
Rest of
World
$3.55
$3.47
- 2%
29 apparel categories removed from quota control
Imports in Square Meters (mil)
Pre and post quota removal
2001
2002
Change
China
142
554
+ 412
Rest of
World
1,439
1,238
- 201
29 apparel categories removed from quota control
Imports in dollars ($ mil)
Pre and post quota removal
China
Rest of
World
2001
2002
$824
$1,792
+$967
$5,104
$4,303
- $801
29 apparel categories removed from quota control
Change
China Growth: Sensitive Categories

ATMI requested safeguard actions using new
China WTO safeguard against sensitive
categories last August

Eight months later - still no word!

Imports from China have gone up an average
of 600 percent in each category over the past
year!
Sensitive Categories - ATMI Safeguard
Request
Change in
China’s
Share
Over Past
Year
Luggage: 20% average tariff
536%
300%
10% 70%
200%
100%
0%
China
-100%
Mexico
Thailand
Philippines
-52%
-43%
-49%
Dominican
Rep
-33%
Sensitive Categories - ATMI Safeguard
Request
Change in
China’s
Share
Over Past
Year
Dressing Gowns: 8%-16% tariff
600%
557%
500%
5% 28%
400%
300%
200%
-6%
100%
0%
-100%
China
Mexico
-14%
Bangladesh
Philippines
-36%
Thailand
-42%
Sensitive Categories - ATMI Safeguard
Request
Change in
China’s
Share
Over Past
Year
Brassieres: 17% tariff
300%
250%
5% 27%
200%
100%
-1%
0%
China
-100%
Mexico
-21%
Haitai
-6%
Dom Rep
Taiwan
-39%
Sensitive Categories - ATMI Safeguard
Request
Change in
China’s
Share
Over Past
Year
Gloves: 20% average tariff
300%
242%
200%
10% 36%
100%
0%
China
-100%
Sri Lanka
-40%
Taiwan
-14%
Bangladesh
-36%
Guatemala
-65%
COMMERCE “MAJOR SHIPPERS LIST” OF TEXTILE AND APPAREL PRODUCTS
Mexico
Canada
Pakistan
Haiti
Luxemburg
Korea
India
Taiwan
Bahrain
Bulgaria
Thailand
Indonesia
Bangladesh
Jordan
Mauritius
Following
is aincreased
list of
Imports from China
more last year than from every
every
majorin supplier
other country
the world
combined.
to
the
U.S.
market
A RECORD 2.8 billion square
meter
increase
– 96% inone
de- .
last
year
except
Honduras
Turkey
Hong Kong
Australia
Romania
Philippines
El Salvador
Dom. Rep.
Jamaica
Saudi Arabia
Sri Lanka
Germany
Israel
Lesotho
Argentina
Vietnam
Costa Rica
Brazil
Uzbekistan
Maldives
Malaysia
Macao
Japan
South Africa
Oman
Egypt
Portugal
United Kingdom
Singapore
Kenya
France
Burma
Russia
Mongolia
Poland
UAE
Spain
Nicaragua
Netherlands
Brunei
Belgium
Colombia
Nepal
Peru
Turkmenistan
Syria
Czech Rep
Switzerland
Greece
controlled
categories
Swaziland
Qatar
Ukraine
Finland
Hungary
Fiji
Madagascar
Austria
Morocco
Sweden
Estonia
Sweden
Estonia
Ecuador
New Zealand
Belarus
Moldova
Slovenia
Denmark
Belize
Ireland
China’s Share of U.S. Imports
100%
95%
80%
70%
67%
53%
While Quotas are
still in Place
16%
12%
0%
Bicycles
Lighting
Toys
XMAS
Dec.
Hsehld.
Appl.
Apparel
Textiles
Why is China Unbeatable?



China’s currency, which is pegged, is
estimated to be 40 percent undervalued.
This gives China an enormous artificial cost
advantage
Over 50% of China’s textile sector and 25%
of apparel sector is state-owned and
subsidized
Unlimited labor supply: China needs to find
jobs for 15 million new workers a year
What Can Be Done?
1. Chinese Currency Manipulation:
• Urge your governments and US
government to for China to float its
currency (Use WTO, IMF, bilateral
avenues)
2. Urge US government to effectively use the
WTO textile safeguard & support its use
3. Other WTO options?
Future for US Textile Industry

Preferential trade agreements
• Western Hemisphere – Mexico, Central America,
Caribbean . . . FTAA
• Africa

Meet retail industry needs
• Need for diversity to spread risk

Dock strike, SARS, political uncertainty …
• Quick response
• Established manufacturing base
CHINA WINS
BUT WHAT IS OUR FUTURE
IF WE DON’T DO
SOMETHING?