The National Council of Textile Organizations (NCTO) has just concluded its 11th annual meeting in Washington, DC, USA. The US textile industry is on the rise and there is concern over implications of the ongoing Asia/Pacific and European trade agreements. Internally, NCTO is still in the first year of the merger of three formerly independent textile organizations.
NCTO is a unique association representing the entire spectrum of the textile sector from fiber to finished textile product. Currently, the organization represents 150 companies, had a 2013 operating budget of $1.5 million, and maintains a staff of 6 full-time plus a full time industry consultant. The mission of NCTO is to focus on creating powerful national and international alliances to advance the interests of the U.S. textile sector.
Auggie Tantillo has been NCTO president for 8 months. Mr. Tantillo is a well-known industry/ government textile veteran in Washington. Early in his career, he served as Deputy Assistant Secretary of Commerce for Textiles, Apparel and Consumer Goods and, prior to his appointment as NCTO president, he was the Executive Director of the American Manufacturing Trade Action Coalition (AMTAC).
Steve Warner, publisher of BeaverLake6 Report, interviewed Mr. Tantillo for this report.
BeaverLake6 Report: Can you tell us the state of the US textile industry?
Tantillo: The US textile industry has experienced fair stability and steady growth over the past few years. This important domestic manufacturing industry is the third largest exporter of textile products in the world. Exports of all textile products were nearly $17.9 billion in 2013. Lately, we have seen numerous investments from foreign companies in yarn-spinning plants. A crucial aspect to the attractiveness of building in the US and creating jobs is the Yarn-Forward rule.
BL6: What is the status of the Trans-Pacific Partnership agreement negotiations? It was hoped the agreement would originally be finished by 2012, then 2013 and now it may not be concluded in 2014. Why so slow in getting this done?
Tantillo: Well, we are operating under the assumption it will be done sooner than later. But these types of agreements seem to have their own pace. As more countries become involved, there are more issues which need to be addressed. Vietnam’s inclusion created a concern for us with the Yarn Forward rule. The agreement, though, isn’t just about textiles. Japan’s inclusion has created concerns regarding agricultural products, and these types of other non-textile issues are causing, in part, the slow pace of the negotiations. And, the wildcard for this whole agreement for the US is the Congressional Fast Track authority to pass it. We need it.
BL6: Will Yarn-Forward be included in the agreement, and, if so, will it be a strong rule similar to what we have seen in other US trade agreements?
Tantillo: That’s a good question. We have received every indication that the Yarn-Forward rule will be included in the agreement. We feel it is essential the rule remain strong and comprehensive in its product coverage with its only flexibility being the short supply list. We are pressing for a strong Yarn-Forward agreement similar to the NAFTA/CAFTA agreements. But there is a strong lobbying effort by US apparel importers and retailers to ease up on the requirements. It’s an intense fight right now.
BL6: TPP, from a textile point of view, seems to be only a concern for those supplying the apparel industry. How does the TTP impact the domestic technical textiles industry?
Tantillo: There are major players in the TPP that are significant producers of technical textiles, especially Japan. Vietnam is also becoming a significant exporter of technical textiles.
BL6: What is the status of the Transatlantic Trade and Investment Partnership (TTIP)? Comparing it to TPP, should the technical textiles industry be more concerned about this agreement?
Tantillo: The 4th round of TTIP negotiations was held in Brussels in March. The European Union is a huge market for industrial textile yarns and fabrics. This agreement will be beneficial from the standpoint of US producers being able to access the European marketplace.
BL6: Are the two agreements similar in scope?
Tantillo: There are some challenges and differences between TTIP and TPP that are a concern for the US textile industry. In TTIP, for example, the EU favors a complicated Fabric-Forward rule as opposed to a Yarn-Forward rule. The EU is also pressing for access to US military contracts which means a weakening of the Berry Amendment. We would resolutely oppose any changes in the Berry Amendment.
BL6: The Textiles Enforcement and Security Act (TESA) recently was re-introduced in Congress. Will it get passed or will it stall?
Tantillo: We are hopeful that it will pass. However, its success is likely tied to larger issues such as The Customs Reauthorization Act. If a bigger customs and trade package moves through Congress, it would give us a much greater probability of getting TESA language adopted.
BL6: What’s the status of the National Defense Authorization Act? Is there anything to be of concern or interest by the technical textiles industry?
Tantillo: It has been enacted and there are some notable textile provisions. Title 1, Section 141, requires budget justification display for personal protection equipment. Title1, Section 146, requires study on 1) procurement and 2) research and development of personal protection equipment plus recommendations on how to improve innovation and competition. And the last significant provision for technical textiles is Title III, Section 352, which revises policy on combat and camouflage uniforms. This policy would require all the services to wear the same camouflage and ACU’s down the road.
BL6: Has any analysis been done on the impact of the Korean-United States trade agreement (KORUS). There was a lot of concern before it passed in 2011.
Tantillo: There has not been an analysis done but there have been reports of companies who have been directly affected, especially in the area of industrial fabrics. There has been substantial growth on the part of Korean exports to the US market.
BL6: What are the priorities for NCTO in 2014?
Tantillo: We have to ensure the Trans-Pacific Partnership (TPP) trade agreement is concluded in a sustainable and fair manner allowing the US textile industry to continue to be a viable player in the global textile marketplace. We have to make sure the Berry Amendment remains intact in the TTIP negotiations.
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