NCC Asheville MeetingJuly 20, 2004

UPDATE: Quota Phase-out

& Textile Safeguard

Presentation

1. China and the Quota Phase-out - 2. How to Counter3. Strategy

• World Pressure• Hill Pressure• Administration Outreach

4. Final Attempt• Voter Education Campaign - Grassroots

Pressure5. Coming Up….

Study: China’s Share of Apparel Removed From Quota in 2002

75-80%

53%

UPDATED72%

31%

9%

0%

100%

2001 2002 Jun 03 Jun 04 2004

30 months time - 72%

China with Quotas in Place

10%

7% 7%6%

8%8%9%

0%

15%

China Thai Mexico CBI Taiw Bang Phil

China 30 Months Later

2% 2% 2%4%

72%

3%2%0%

75%

China Thai Mexico CBI Taiw Bang Phil

China drops

prices 53%

Predictions Chinese shareCotton Sourcing Summit Survey – Miami 87% said: 50 – 90%

43% said: 75 - 90%

Past experience – other markets - apparel

Australia and Japan: 70 – 77%

Quota removed categories (as of June 04) 72% +

WTO Study (no recent data) 56% (China + India = 71%)

Analysis: Similar products70% – 85%

McKinsey Study & DHL Study 50% (safeguards)

ITC Study “Supplier of Choice”

World Bank Study (no recent data) 50%

US Textile Cotton Consumption(mil bales)

< 2

6.2

0

7

Jun 04 2006

Remnants – Non-wovens,

carpeting

How to Counter China

Government to use the “threat of market disruption” track of WTO safeguard clause to keep China under control until 2008

Aggressive use of trade remedies to go after Chinese and other countries unfair trade practices post 2005

China WTO Textile Safeguard

Takes until Aug 1 to get a decision – lasts only until Dec 31.

Process starts over again in January 05

5 month safeguard each year

“Threat” Case

File prior to China going off quota – decision in January.

Under “threat,” China will held to 2004 quota levels plus 7.5%;

Will force China to the table to negotiate a comprehensive agreement covering the next three years.

Government on using “Threat”

Big Confrontation with China / importers and retailers strongly oppose

Refused to consider in previous safeguard actions

Not released criteria to even file a case

Industry Strategy

1. Worldwide Coalition

2. Hill Pressure

3. Grassroots Campaign

Gov. Restrains

China Using

“Threat”

World Wide Pressure

Global Alliance for Fair Textile Trade (GAFTT)

• Begun March 2004• Now 102 trade groups from 51 countries• Events in Istanbul, Johannesburg,

Kampala, Brussels and Geneva

www.fairtextiletrade.org

Growing Global Effort 9 countries have announced at WTO

that something must be done about China – Mexico, Turkey, Bangladesh, Indonesia, Sri Lanka, Mauritius, Nepal, Dominican Republic, Madagascar

30 million jobs are predicted to be lost

Concerns about economic dislocation, instability, increased poverty, terrorism

WTO to meet Oct. 1st

Council on Trade in Goods

More countries expected to speak up

Make sure that they support use of “threat”

Increase pressure on White House to act on developing countries behalf

Hill Pressure

Two letters on China and safeguards – over 100 signatures on each

Unity DAY- July 20th – over 100 textile executives visited more than 40 offices to talk about China

High level meetings with DOLE and BURR to plan strategy re: White House

Administration Outreach

4 attempts (NCC, NCTO) to meet with Aldonas/Commerce over China & CAFTA since January

First meeting took place last week to begin to discuss criteria for “threat”

Meeting w/Zoellick – warning over confrontation

Outreach to White House

Gant has used personal channels Burr has called twice Dole has met with Zoellick and called

White House. Also wrote to Powell. Zoellick has called twice Aldonas has now called

NO RESPONSE TO DATE

Final Attempt

Voter Education Campaign Targeted on Trade and Loss of Jobs

Overseas – N. Carolina heavy + S. Carolina

Ramp Up Over Time: Billboards then Radio

Can be stopped at any time

Stop Sending Jobs

OverseasChange Trade Policy NowChange Trade Policy Now

Register…Vote!www.myjobcounts.orgwww.myjobcounts.org

Change Trade Policy Now

Grassroots Portion

“Textile coordinators” in every plant Voter registration drives 4 major rallies Website: www.myjobcounts.org Editorial boards/leafleting/letters to

editor/billboards/bumper stickers

Coming Up

Ask for major trade groups to help fund support grassroots campaign

Campaign ramp up to begin soon after Labor Day

Industry likely to file dozens of petitions late September/early October

GAFTT to have major summit in Geneva prior to Oct. 1st meeting.