We welcome you all
here today as we celebrate 20 years of advocacy and impact in our nation’s
capital on behalf of the U.S. textile industry.
NCTO represents the
full spectrum of the U.S. textile sector – a production chain that employs
502,000 workers nationwide and produces almost $64.8 billion in output
annually. We are an essential industry that equips U.S. warfighters and one
that pivoted overnight to produce PPE during the COVID pandemic.
The U.S. textile
industry has made significant investments in the U.S. Its innovations are
unparalleled and its contribution to local communities and the U.S. economy is
critical.
While the domestic
textile industry is a key contributor to the U.S. economy and critical part of
the military and public health industrial base, our sector is facing a crisis
of historic proportions as the result of rapidly deteriorating market conditions
coupled with unchecked foreign predatory trade practices and diminished customs
enforcement activities.
On the economic
front last year, our industry saw historic inflationary pressures, a severe
global slowdown, weak consumer demand, a glut of retail inventory that
translated into poor demand for future orders of textiles, and a contraction in
manufacturing.
The fallout also
extends beyond our borders to hemispheric partners – parties to U.S. free trade
agreements, including CAFTA-DR and USMCA – who, along with U.S. textile
producers, form an integrated, vertical textile and apparel co-production chain
and represent the counterweight to production in Asia.
To address these
troubling trends, the National Council of Textile Organizations (NCTO) has been
highly engaged with industry allies in Congress and the Biden administration to
confront the severe crisis and challenging issues facing the industry.
NCTO hosted or
participated in numerous congressional and administration visits throughout
2023 and into early 2024.
In July, NCTO
executives and staff united to participate in a critical Washington fly-in and
met with some of the most powerful members of Congress as well as the nation’s
top trade chief.
We outlined
policies critical to NCTO membership including: closing the de minimis
loophole, strengthening Customs enforcement, holding China accountable,
strengthening our domestic procurement laws, maintaining the yarn-forward
textile rule in CAFTA-DR and other trade agreements, and passing the Farm Bill
and Miscellaneous Tariff Bill (MTB), which are so critical to our domestic
industrial base.
We
are literally making national news every night on de minimis. This is no longer
an issue that is on page 3 of national news; it’s on the front pages of the
Wall Street Journal, New York Times, and Time Magazine.
This
is a massive, coordinated effort involving NCTO and our industry leaders who
have had significant accomplishments that have turned the tide and changed the
trends of conversations in Washington.
We cannot thank those members enough who do so
very much to support our activities and go way above and beyond.
Especially
given the velocity of things coming at us this year – several members
repeatedly came to town like Andy Warlick, Eddie Ingle, David Smith, and so
many more listed on the projected slide.
We
met with the highest levels of the cabinet and the highest levels of the
Congress. Our industry’s effectiveness, breadth, and prowess was noticed by all
and the urgency of what we were asking for as an industry became a huge
priority for everyone in Washington – no matter the party affiliation. Just last week, Secretary Mayorkas and the
DHS team responded to our urgent calls for a significantly stepped up textile
and apparel enforcement plan to help address trade fraud – and that wouldn’t
have happened without the concerted effort by the NCTO staff and the members
who engaged here in Washington, DC.
NCTO’s work is
noted at the highest levels of our government. In July, President Joe Biden
made an historic visit to NCTO member Auburn Manufacturing Inc., elevating the
U.S. textile industry’s profile and reinforcing its competitiveness and
economic contribution. This is the first visit to the industry by a sitting
President in decades.
I would like to
sincerely thank our staff, led by NCTO President and CEO Kim Glas and the
entire hard working NCTO team, as well as our industry leadership for
successfully navigating through challenging economic times and polarization in
Congress, while partnering with the administration and key congressional
offices to secure a number of critical achievements last year.
NCTO’s effective
advocacy efforts resulted in a long list of accomplishments in 2023, including:
intensifying pressure on Congress and the administration to close the de
minimis waiver system and step up enforcement of UFLPA and import fraud;
safeguarding the integrity of our free trade agreements; enhancing government
procurement of U.S. textile-based products; and maintaining a strong position
on China trade enforcement, including tariffs on finished textile and apparel.
Before laying out
NCTO’s policy wins in 2023, I want to quickly recap how the industry fared “by
the numbers” last year.
BY THE NUMBERS
Given the economic
and trade headwinds the industry faced in 2023, the fact that the industry only
registered slight declines in some of the key metrics is testament to its
resilience and strength.
• In 2023, the value of U.S. man-made fiber,
textile, and apparel shipments totaled an estimated $64.8 billion compared with
$67.4 billion, in shipments in 2022. [1]
Here are additional
key industry facts:
• U.S. exports of fibers, textiles and apparel
were $29.7 billion in 2023 compared with $33.9 billion in 2022. [2]
• The United States is the second largest
individual country exporter of textile-related products in the world.
• The U.S. textile and apparel industry
invested $20.9 billion in new plants and equipment from 2012 to 2021, the last
year data is currently available for this figure. Recently U.S. manufacturers have opened new
facilities throughout the textile production chain, including recycling
facilities to convert textile and other waste to new textile uses and resins.[3]
Onshoring and
nearshoring trends continued to strengthen Made in USA production and our vital
co-production chain with the Western Hemisphere, while NCTO continued to press
for effective enactment of policies in Washington aimed at expanding Berry and
buy American rules to fuel growth in American-made products for the military,
PPE and federal agencies.
At the end of the
day, some key fundamentals for the U.S. textile industry remained sound, while
others weakened due to the issues outlined above. We remain committed to
growing our businesses and working with the administration and Congress to help
shape effective policies that will ensure future expansion of this vital and
strategic industry.
While we expect to
see ongoing challenges this year, which will test our resolve, we know
collectively as an industry this will not weaken our resilience or our
innovative spirit.
POLICY ISSUES
Now, I would like
to highlight a few accomplishments NCTO staff achieved during the year.
CUSTOMS ENFORCEMENT
NCTO actively
engaged with the administration and Congress to press for stepped up
enforcement against unfair trade practices by China and other foreign
competitors, sounding the alarm on the damaging impact this fraudulent activity
is having on U.S. textile producers and our Western Hemisphere trade partners.
We called on CBP to
immediately step up enforcement against: slave labor in supply chains under the
Uyghur Forced Labor Prevention Act, fraudulent origin claims under free trade
agreements, “de minimis” shipments that facilitate illegal trade, largely bypass
duties and inspection, and put the industry at a competitive disadvantage.
Another significant
accomplishment was coordination on a bipartisan letter led by Senate Finance
Committee Chairman Ron Wyden (D-OR) calling on U.S. Customs and
Border Protection to ensure Chinese companies aren’t evading U.S. laws against
forced labor and costing American jobs, by stepping up oversight and
enforcement provisions in trade agreements with Central American and North
American trading partners.
As a result of
these efforts, Department of Homeland Security (DHS) Secretary Alejandro
Mayorkas announced a comprehensive textile enforcement plan to address
enforcement concerns raised by the industry just last week – this plan made the
top of the Wall Street Journal.
DE MINIMIS
The Section 321 De
Minimis provision continued to be at the forefront of congressional scrutiny
and hearings, with both Democrats and Republicans weighing in with concerns on
this legal provision in U.S. trade law.
The impact of this
loophole is devastating, facilitating nearly 4 million imported shipments a day
that may contain goods made with forced labor, counterfeits, toxic products,
and illicit narcotics such as fentanyl.
NCTO leaders held
several meetings with lawmakers and the administration and testified at a key
congressional hearing and a roundtable, amplifying the critical need to close
this loophole that is hurting our members and giving China a duty-free backdoor
to our market. We worked with allies
like Rep. Dan Bishop who held 2 hearings drawing attention to de minimis and
how it makes policing the Uyghur Forced Labor Prevention Act impossible NCTO and our industry is leading the way to
close this loophole.
In addition several
members of Congress weighed in with letters to President Biden to close this
loophole, including a joint letter from Senators Sherrod Brown and Rick Scott,
a separate letter led by Sen. Sheldon Whitehouse, and a letter led by Rep. Rosa
DeLauro.
Three bills were
introduced in 2023 (including bills from Sen. Sherrod Brown and Rep. Earl
Blumenauer) to combat de minimis abuse.
In February this
year, NCTO worked to build a coalition of diverse stakeholders to launch the
Coalition to Close the De Minimis Loophole, representing thousands of voices,
from the families of victims of fentanyl fatalities and nonprofit and
nonpartisan organizations to labor unions, domestic law enforcement
associations, domestic manufacturers, and business associations.
Several coalition
members participated in a press conference with Rep. Blumenauer and other
congressional members to elevate the issue, which was covered by several news
outlets and have sent numerous communications to the Hill.
There are numerous
other issues requiring NCTO’s focus and resources, such as advocating for full
enforcement of the Make PPE in America Act, amplifying support for the Section
301case against China’s intellectual property abuses, promoting tariffs on finished
products and the need to pass a new Miscellaneous Tariff bill with immediate
and full retroactivity.
Due to time
constraints, I cannot delve into all these important issues. But please know
that without exception, NCTO is highly engaged on every policy matter that
affects the U.S. textile industry with the intent of shaping policy
determinations in a manner that directly benefits U.S. textile investment,
production and workforce.
Industry leadership
and involvement is of paramount importance. From contributions to NCTO’s
TextilePAC to arranging congressional visits, the industry can make a
difference and help raise the level of awareness about its importance to the
overall U.S. economy and workforce, and to the local and state economies it
supports.
CONCLUSION:
The business
environment for the year ahead will continue to be rife with challenges for our
industry and will likely lead to additional plant closures and layoffs, which
we have already seen in the first quarter of 2024.
But I remain
cautiously optimistic for the following reason: NCTO’s strong advocacy on
behalf of the industry in helping institute policies that support our industry,
reform ill-conceived policies, and fend off challenges to our strong free trade
agreement rules.
In 2024, we will
continue to engage with Congress and the administration on critical policy
issues impacting our industry and I am confident we will achieve positive
policy wins for this industry as a unified voice in Washington.
We will continue to
work in conjunction with our Western Hemisphere trading partners and capitalize
on the onshoring and nearshoring trends that we are seeing and strengthen our
co-production chain, investment and employment.
That concludes my
formal remarks.
On a personal note,
I have been honored to serve as chairman of a highly effective organization and
dedicated staff and I know I hand it over to our new Chairman, who is
well-positioned to navigate the headwinds and trade battles.
I truly am
optimistic about the innovative strength of the industry and its resilience to
economic and trade challenges. With the support of this effective trade and
lobbying organization in Washington, we can overcome unforeseen challenges and
continue to cement our position as an integral sector to the U.S. economy and
the Western Hemisphere.
[1] U.S.
Census Bureau, Manufacturers’ Shipments, Inventories, and Orders (M3) Survey,
and Annual Survey of Manufacturers (ASM), value of shipments for NAICS 313,
314, 315 & 32522. 2021 data used to estimate 2023 NAICS 32522 figure.
[2] U.S.
Department of Commerce data for Export Group 0: Textiles and Apparel.
[3] U.S. Census Bureau, Annual
Capital Expenditures Survey (ACES), NAICS 313, 314 & 315.
