WASHINGTON — Peter McGrath, chairman of purchasing for J.C. Penney Purchasing Corp., is one of a select few in the fashion world who has had a role in trying to influence U.S. trade policy for almost a decade.
McGrath, who just completed a three-year stint as chairman of the U.S. Association of Importers of Textiles & Apparel, has found his position both rewarding and frustrating.
During his watch, global trade has mushroomed and the way retailers and importers operate has undergone a seismic change, particularly in apparel and textiles. Retailers have been on the winning side of many trade issues, including the Central American Free Trade Agreement, which lowered trade barriers between the U.S. and six countries, as well as trade preference programs for Caribbean and African countries.
“I’ve loved the trade part of it, but it is so intertwined with politics and the push and pull of where the administration is,” McGrath said. “I found it fascinating and it gave me a strong and in-depth understanding of how Washington operates and how politics plays out.”
McGrath, 55, has witnessed the elimination of a 30-year system of global quotas, the enactment of several free trade deals and, most recently, the signing of a three-year import restraint agreement with China.
McGrath said Penney’s has a lot of other options with countries that don’t have quota restrictions, such as Pakistan, Bangladesh and India.
“I think more megafactories like those in China and Bangladesh that employ 35,000 workers will develop around the world,” he said. “But … there will also be fast-turn business models that turn product quickly and do short runs, as well as niche players that specialize in a specific type of business.”
McGrath will represent Penney’s at a critical World Trade Organization meeting next month in Hong Kong, where negotiators will try to frame a blueprint to complete global trade talks that seek to slash tariffs across sectors by the end of next year.
“It will be very difficult,” said McGrath, noting the move to eliminate global agricultural subsidies could potentially stall any momentum. “It will take enormous political guts to go forward, but there are too many people with too many stripes. That is the thing about politics I have learned — what makes great sense and is a good policy decision may be ignored because its not what constituents want.”
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McGrath noted that retailers and importers have lost some key trade battles, such as rule of origin in CAFTA and the U.S.-China accord.
“I learned a lot from that perspective — the ability of people with like issues to be able to stand together,” he said. “In the southeastern U.S., because of the emotional connections to the textile industry’s past, they have … been successful in leveraging the U.S. — to the point of my being frustrated because we were not able to make the administration, House or Senate understand that imports are good for the U.S., help create jobs and give great value for American consumers.”