THE FUTURE OF TEXTILES

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THE FUTURE OF TEXTILES AND CLOTHING AFTER
2005 Will The Benefits of Quota Elimination
Be Spread Evenly? Strategies for Industrial
Restructuring
Vice Chairman Jennifer A. Hillman United States
International Trade Commission Brussels,
Belgium May 5-6, 2003
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U.S. Imports Textile and Apparel Trends (value)
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U.S. Imports Textile and Apparel Import Trends
(SME)
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U.S. Industry View

• After January 1, 2005, US imports of textiles
  and clothing will be dominated by China, with
  Vietnam, India, Pakistan plus some of those
  countries which enjoy preferential access to our
  market playing secondary roles.
• American Textile Manufacturers Institute, January
  22, 2003

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U.S. Importers View

• Source from fewer countries, focus on those that
  are fully integrated.
• Emphasis on
• Speed
• Quality
• Legal Compliance
• Logistics
• Product Costs

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Academic Literature

• Overall increase in world textile and clothing
  trade
• Likely concentration in larger, established low
  cost exporters

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Changes in U.S. Imports Following Removal of
Quota on Knit Fabrics(Chinas increase was
21,976)
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Changes in U.S. Imports Following Removal of
Quotas on Baby Garments (Chinas increase was
826)
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Changes in US Imports Following Removal of Quotas
on Robes and Dressing Gowns(Chinas increase was
540)
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Changes in US Imports Following the Removal of
Quotas on Bras and other Foundation
Garments(Chinas increase was 232)
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Producers Whose Exports are Concentrated in
Heavily Constrained Categories

• Percent of Textile and Clothing Exports to US In
  Most in Demand Quota Categories
• (Knit shirts, woven shirts, pants, underwear,
  pajamas)
• Lesotho 94.6
• Jamaica 90.3
• Honduras 85.5
• Haiti 85.0
• El Salvador 79.9
• Kenya 76.5
• Nicaragua 75.5

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Highly Diversified Producers

• Percent of Total Textile and Clothing Exports to
  US in Most in Demand Quota Categories
• (Knit shirts, woven shirts, pants, underwear,
  pajamas)
• Sri Lanka 23.3
• Turkey 20.0
• Israel 17.6
• Indonesia 17.1
• Taiwan 16.1
• Thailand 14.8
• Ecuador 11.3
• India 8.6
• Korea 6.2
• Pakistan 5.2
• China 5.1

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Key is Vertical Integration/Diversification

• Vertically integrated full package suppliers
• Niche products or markets
• Higher value added products
• Relocated to low-cost countries
• Diverse mix of textile and clothing products
• Diverse markets outside US and EU