A LOOK AT THE NEW TEXTILE BILL

The battle over U.S. textiles and apparel trade policy is about to be rejoined.

Its outcome may be the key as to whether there will be a comprehensive new trade law this year and it could help shape the outlook for an international trade round in Geneva.Spokesmen for the domestic textile-apparel industry say that the import quotas bill just introduced in Congress is better crafted than the quotas measure Congress passed in 1985 but which President Reagan vetoed.

They seem confident that the bill will win a majority in both the House and Senate. As of early this week, 39 senators and 114 congressmen had added their names to the legislation.

John Gregg, the chairman of Avtex Fibers Inc., also chairs the Fiber, Fabric & Apparel Coalition for Trade, the chief lobby group for the quotas bill. He seems hopeful that the indus try can even muster enough votes to override any future presidential veto of the bill.

Last summer, he recalled in an interview this week, the House fell only eight votes short of overriding the Reagan veto. Changes written into the new bill should help corral those eight votes, he said.

This latest version of the textile-apparel industry's quest for greater protection from foreign competition looks more sophisticated than the 1985 legislation.

The new bill, Mr. Gregg and others in the industry say, addresses the criticism mounted against the vetoed bill. For starters, it does not cut back imports, but instead allows a 1 percent a year import growth rate.

It is non-discriminatory, as it subjects imports from all countries to quotas. The former bill exempted Canadian and West European suppliers from import controls.

And, the textile-apparel coalition argues, the administration would have the flexibility to parcel out quotas in a way that would not torpedo existing U.S. textile-apparel trade pacts with supplier nations.

Hence, it says, the U.S. quotas would not violate the 51-nation Multi- Fibre Arrangement, which sets textile-apparel trade principles.

The new bill also provides the president with authority to compensate supplier countries whose exports are adversely affected by the quotas. The compensation could come in the form of U.S. tariff cuts of up to 10 percent on textiles and apparel.

The U.S. textile-apparel industry seeks the quotas even though arguably it already receives greater protection from imports than almost any other U.S. sector. Some 38 countries control textile and apparel exports to the United States and textile-apparel tariffs average substantially more than U.S. duties on most other goods.

Despite those restrictions, U.S. textile-apparel imports keep pouring in. Since 1980, they have grown by an average annual rate of nearly 20 percent. Imports from China, which is about to become the biggest foreign supplier to the United States, have tripled.

Behind the surge, say Mr. Gregg and Carlos Moore, the American Textile Manufacturers Institute's executive vice president, is the relatively loose construction of the bilateral tex tile-apparel trade pacts now in place.

Many products are not covered in those agreements. Meanwhile, they say, U.S. producers must compete against countries where worker pay ranges well below $1 an hour.

Since 1980, they say, 350,000 textile and apparel workers have lost their jobs, and they point to imports as the reason.

The industry's biggest problem is in apparel and apparel fabric, where imports have been steadily expanding their market share, from 28 percent in 1980 to an estimated 52 percent last year. The United States, for example, no longer makes any velveteen, according to Mr. Gregg and Mr. Moore.

The tighter trade control pacts the Reagan administration negotiated last year with three major suppliers - Hong Kong, Taiwan and Korea - do not satisfy U.S. textile-apparel producers.

These new agreements will hold import growth from these countries to 1 percent or less a year over the next few years, U.S. officials say. But Mr. Moore counters that they will still let in 400 million square yards over and above current import levels.

The notion of a worldwide import quota, covering imports category-by- categor y from all countries, is hardly new, he argues.

At one time, he says, Canada did something similar and Norway still uses such an approach. More importantly, he contends, the European Community effectively applies a nearly global import quota.

Since 1983, Mr. Moore notes, EC textile-apparel imports grew by 10 percent, while U.S. imports roughly doubled.

Others, including predictably the Reagan administration, foreign governments and U.S. importers and retailers, view the textile-apparel quotas bill differently.

They refuse to acknowledge that the new bill is much, if any, better than the 1985 legislation. The domestic industry's quoting Plato's advocacy of regulated intercourse with other states does not sway them.

The new measure still violates the General Agreement on Tariffs and Trade, claim administration officials, as it would impose unilateral import curbs without adequate compensation to affected countries.

They question whether a broad congressional finding of import injury to the textiles-apparel industry meets GATT standards, which, they say, require careful product-by-product injury findings. And, they note, not all textile and apparel imports are rising rapidly and some are not increasing at all.

Cutting U.S. textile and apparel tariffs by 10 percent - these tariffs now average about 20 percent - would hardly suffice for compensation for countries whose exports were restricted by the quotas, U.S. officials contend.

Besides, they ask, how much would tariff cuts mean on products under strict quantitative import control?

The United States, they argue, would be vulnerable to massive foreign trade reprisals. U.S. textile and apparel imports last year totaled $24.7 billion. The EC already is on record that it would retaliate against the proposed quotas.

Retailers caution that the quotas would lead to supply shortages in such items as men's shirts, sweaters, women and girls' coats - and to inflation. U.S. textile mills, they point out, already are operating at about 95 percent of capacity.

Does the U.S. industry really need greater protection? A U.S. trade official cites a 10 percent increase in domestic textile output last year and a 3 percent rise in apparel production.

Textile industry employment was up 1 percent in 1986, though from an exceptionally low level, and earnings on sales improved to 3.8 percent.

But Mr. Gregg, for one, maintains that without across-the-board import quotas, the domestic industry will gradually all but disappear. Domestic shoe makers now have less than 20 percent of the U.S. market, he notes.

Will the industry try to tie its quotas bill to any omnibus trade package Congress votes this year? Mr. Gregg says the quotas bill is meant to stand on its own. But, he adds, if its sponsors in Congress decide to try to attach it to a comprehensive trade measure, he would not object.

And therein, to a large extent, lies the fate of any new trade law in 1987.

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