Textile Groups Debate CAFTA

Two major groups representing the textile industry, which is highly sensitive to foreign competition, came out on opposing sides Monday in the debate over a free trade agreement with six Central American and Caribbean countries.

The National Council of Textile Organizations (search) announced its support for the Central American Free Trade Agreement (search), or CAFTA, a decision that was hailed by the administration as it struggles to come up with the votes needed to get the trade package through Congress.

The group's chairman, Allen Gant, said in a statement that the agreement was needed XXXXXXXXXXX `ent or more U.S. content, while Chinese textiles usually have no U.S. materials.

U.S. Trade Representative Rob Portman (search) praised the group for taking a "bold step" and for "having the vision to recognize the benefits of this free trade agreement in responding to competition from Asia."

But another group representing textile companies, the American Manufacturing Trade Action Coalition (search), on Monday repeated its opposition to CAFTA, saying it was a "job killer" filled with loopholes designed to encourage the offshoring of U.S. jobs.

It noted that since the enactment a decade ago of the North American Free Trade Agreement (search) with Mexico and Canada, jobs in the U.S. textile and apparel manufacturing industry had gone from 1.5 million to 666,500.

On one issue, the NCTO said it had received a commitment from Portman that steps would be taken to ensure that $100 million in existing U.S. pocketing and lining exports to the region would not be lost. But AMTAC said not a single CAFTA country has pledged support for fixing the pocketing problem.

The administration has pushed hard to gain the good will of the textile industry, including launching an investigation into whether to reimpose quotas on various types of Chinese clothing.

The House could take up the CAFTA agreement as early as this month. With a large majority of Democrats against it because they say it doesn't go far enough to protect labor and environmental standards, the administration badly needs the votes of Republicans from textile states, many of whom have expressed reservations about the deal.

The sugar industry is also strongly against the agreement because it allows a small increase in sugar exports from Central America, and that too could influence the outcome of the House vote.

Supporters say that under CAFTA more than half of U.S. farm exports to the region would immediately become duty free, but there are also divisions within the farm community about the deal.