AVENTURA, Fla. — Jennifer Hillman just got a first-hand look at the bitterness and frustration of the knitted textile industry — much of it directed at the administration she represents.
Hillman, the U.S. chief textile trade negotiator, told about 400 knitting executives that the North American Free Trade Agreement, in effect since Jan. 1, and the GATT Uruguay Round treaty, still awaiting legislative approval, should strengthen their industry’s long-term future. Her remarks were met with dismay, disbelief and disagreement.
Hillman, who spoke Saturday during the annual three-day convention here of the Knitted Textile Association, told the knitters they are “one of the few [industry] segments of the U.S. that run a trade surplus, and that NAFTA and GATT will only strengthen that.”
In recapping the first year of trade policy under the Clinton administration, she told the parley that in 1993 — excluding finished garments — the U.S. exported about $325 million in knitted fabrics while importing about $220 million.
“All in all, we believe the knit industry will be stronger because of NAFTA, and, in time, through GATT,” Hillman said. “We are in a global market. While other countries may have lower wage rates, the U.S. textile industry, through its capital investments in new machinery and its high quality, we believe, will be a competitive leader.”
After her talk, Hillman had to respond to some contentious questions and comments from the floor.
While the knitters said NAFTA is basically a plus for their industry, many told Hillman that the GATT Uruguay Round treaty could be devastating because of what they perceive as a lack of control on transshipping, the 10-year phaseout of the Multi-Fiber Arrangement, the lack of protection for intellectual property and limited market access for their exports to certain countries.
“How can we allow trade with countries that pirate trademarks?” Howard Ackerman, apparel general manager of Malden Mills, asked Hillman during a question-and-answer session following her talk. He also pointed to the stealing of copyrighted designs.
Hillman told Ackerman that under the language of GATT, the U.S. government can go after the importer and exporter. Korea, she said, once a chief country of origin for “pirated designs,” now sees that practice as a violation of its laws.
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“Still, the big problem is going to be how we’ll be able to police what someone in Korea or China is doing,” said Michael Garson, vice president and chief financial officer of JBJ Fabrics, a wet printer, also commenting from the floor.
“Our business depends upon designs that are copyrighted,” he added. “That, to us, is the key issue surrounding GATT.”
Jay Rosen, president of Knit Techniques, a novelty knitter, said, “GATT won’t have a negative impact on us in the sense that we don’t produce commodity goods. Foreign countries don’t have the quick turnaround time we do to get those goods to the marketplace.”
Rosen, however, said he is concerned about market access and transshipping.
“We’ve all seen goods that have come in with tags from different countries, and, by the time [transshipping] has been discovered, the goods have been in the market for a long time,” he said.
“With regard to the 10-year MFA, we feel we were kind of sold up the river,” said Richard Arnold, vice president of Cleveland Mills. “All along it seemed we would get 15 years on it. Then, at the last minute, we only got 10. That discourages me.”
“We couldn’t gather sufficient support for the 15-year phaseout,” Hillman responded. “The key, I think, is that we kept control of the phaseout process. We won’t be lifting quotas on sensitive products until the end of the 10 years.”
As for transshipping, Hillman said that as a result of the language of GATT, the U.S. government can triple-charge the quota of goods coming in from the transshipping country and can now go after the importer and exporter of the textiles and apparel. She also noted that the Customs Service is now hiring about 150 new agents to combat transshipping and other problems associated with importing.
“Nothing is perfect,” she said in an interview after the meeting. “But we believe that we negotiated out of strength, not out of weakness. There are difficulties right now with GATT, and we understand that. But in no way, shape or form do we see GATT as a negative impact on textiles.”
Seth Bodner, executive director of the National Knitwear & Sportswear Association, disagrees.
“My message to some of the smaller firms,” he told WWD, “is simple: You’d better be able to adapt, or, you’d better find another line of work. The impact of GATT, I feel, is going to have severe consequences on our industry.”