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January 2009
Around the World: China

The Office of Textiles and Apparel: Promoting the Competitiveness of the
U.S. Textile and Apparel Industry

Maria D’Andrea
Supervisory International
Trade Specialist,
Office of Textiles
and Apparel,
U.S. Department
of Commerce

Maria D’Andrea joined the U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA), in 1992. She is currently the supervisor for the Eastern Hemisphere, managing the office’s textile and apparel trade portfolio for Europe, Africa, Asia, and the Middle East. Maria has conducted textile and apparel safeguard actions under the Agreement on Textiles and Clothing and the China textile safeguard mechanism. She has also participated as a member of the U.S. delegation defending certain textile and apparel safeguard actions before the World Trade Organization (WTO) Textile Monitoring Body and the Dispute Settlement Body. She manages the Doha textile and apparel portfolio for OTEXA, the legislation portfolio including the Berry Amendment, and the Industry Trade Advisory Committee for Textiles and Clothing. Prior to joining OTEXA in 1992, D’Andrea worked on textile and clothing trade issues as a member of the Secretariat of the World Trade Organization (formerly the General Agreement on Tariffs and Trade).

Overview of the Office of Textiles and Apparel

The Office of Textiles and Apparel (OTEXA) in the U.S. Department of Commerce is primarily responsible for developing programs and strategies to maintain and strengthen the competitiveness of the U.S. textile and apparel industries. The office is headed by a deputy assistant secretary for textiles and apparel, who also serves as chairman of the Committee for the Implementation of Textile Agreements (CITA). OTEXA staff conduct industry research and analysis, assist in the negotiation of trade agreements, find new market opportunities for textiles and apparel, develop supply chain and sourcing strategies, and execute U.S. textile and apparel trade policy. CITA is a U.S. government interagency committee responsible for matters affecting textile trade policy and supervising the implementation of all textile trade agreements. CITA includes representatives from the Departments of State, Treasury, and Labor, and the United States Trade Representative.

Domestic Industry and Trade Trends

The textile and apparel industry provides the U.S. economy with a major source of employment and economic activity. The industry is one of the largest employers in the manufacturing sector, employing 541,300 workers in 2007 or 4 percent of the U.S. manufacturing workforce. Many other industries and workers are dependent on the textile and apparel industry for their livelihood. The industry is the principal customer for America’s raw cotton and wool as well as for its manmade fibers and related products. The industry is also an important purchaser of chemicals, machinery, energy, transportation, and other services.

In 2007, there were 328,300 people employed in the textile industry and 213,000 in the apparel industry. Output from the textile and apparel industry complex includes yarn, fabric, apparel, and a variety of home furnishing and industrial products. The combined value of shipments by all industry segments in 2007 was $101.1 billion, with $16.0 billion exported. Imports totaled $96.4 billion for an overall trade deficit of $80.4 billion.

China is the largest supplier of textiles and apparel to the United States. In 2007, imports of textiles and apparel from China were $32.2 billion, an increase of 19 percent over 2006, representing 34 percent of total U.S. textile and apparel imports. The CAFTA-DR trading partners (Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua) were the second-largest supplier, followed by our NAFTA partners and India. Together these countries account for 55 percent, by value, of U.S. imports of textiles and apparel.

The fastest growing textile and apparel export markets for the United States, between 2003 and 2007, were Malaysia, Singapore, and Thailand, which combined were up 54 percent to $205.9 million; Brazil, up 153 percent to $130.1 million; the Middle East,1 up 76 percent to $294.9 million; and China, up 117 percent to $489.2 million. Together, these countries’ share of total U.S. textile and apparel exports grew from 4 percent in 2003 to 7 percent in 2007.

U.S. Textile and Apparel Trade with China

The Agreement on Textiles and Clothing (ATC), which came into force on January 1, 1995, with the establishment of the World Trade Organization (WTO), provided for a 10-year quota phase-out process for WTO member countries, which resulted in the expiration of quotas on January 1, 2005.

Although our broad spectrum of quotas on China terminated on January 1, 2005, under China’s WTO Accession Agreement, the United States and other WTO member countries maintained the right, through the end of 2008, to impose quotas on imports of products which are disrupting or threatening to disrupt the U.S. market. On November 8, 2005, the United States and China signed a Memorandum of Understanding (MOU) Concerning Trade in Textiles and Apparel. The MOU included quantitative limits on imports from China of 34 individual product categories and was in effect from January 1, 2006, through December 31, 2008. After the MOU expired at the end of the year, textile and apparel imports from China became subject to normal WTO disciplines and U.S. trade remedy mechanisms.

Free Trade Agreements

Free trade agreements (FTAs) have proven to be one of the best ways to open up foreign markets to U.S. exporters. Today, the United States has FTAs with 14 countries (Australia, Bahrain, Canada, Chile, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco, Nicaragua, and Singapore). Three FTAs have been approved by Congress but not yet implemented (Costa Rica, Oman, and Peru), and three have been concluded but not yet approved by Congress (Colombia, Korea, and Panama). In 2007, trade with countries that the United States has FTAs was significantly greater than their relative share of the global economy. Although comprising 7.3 percent of global GDP (not including the United States), those FTA countries accounted for over 40 percent of U.S. exports.

With respect to textiles and apparel, these FTAs usually contain a separate textile chapter, which generally provides for reciprocal market access, a yarn-forward rule of origin (with exceptions), a safeguard mechanism, and customs cooperation to guard against transshipment. In 2007, U.S. exports of textiles and apparel to our FTA partners represented 67 percent of total U.S. textile and apparel exports.

Market Access and Compliance-Related Activities

In order to maintain U.S. textile and apparel competitiveness in global markets and to ensure access to world markets for American companies and workers so they can compete on a level playing field, OTEXA conducts research into U.S. access to foreign markets, reviews potential barriers to compliance with WTO and international trade agreement commitments and access for U.S. products, and initiates textile-specific market access and compliance cases. OTEXA develops plans to collaborate with U.S. industry on identifying and addressing trade problems affecting the U.S. textile and apparel industries. OTEXA provides information on foreign import requirements by country for the textile and apparel sectors, including product standards, labeling, tariffs, taxes, and import documentation. We also monitor foreign subsidies practices affecting the U.S. textile and apparel sectors. We evaluate compliance with WTO subsidies commitments and consult with foreign governments regarding subsidies practices.

OTEXA Export Services

OTEXA is a one-stop source for exporting all types of U.S.-made textiles and apparel. OTEXA maintains a multifaceted export program that responds to the interests and concerns of the industry; encourages, supports and facilitates export sales of U.S.-made textiles and apparel in key overseas markets; and provides information on how to take advantage of the preferential benefits of free trade agreements. Our program includes export counseling, seminars on a variety of export-related topics, market research designed to identify key export opportunities, matchmaking, and facilitation of participation in trade missions and major international trade events.

Visit the OTEXA Web site at www.otexa.ita.doc.gov for additional information.

1Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, and Yemen.