Textiles & Apparel

Policy

This section reviews relevant policies that impact the textile and apparel industry at the state, national and international levels. Policy focus areas include the labor market (ranging from workforce development to health and safety), industrial development, economic development and international trade.

Overview

Policy influences the textile and apparel industries at the local and national level by encouraging economic development and providing assistance to workers. At the international level, global and regional trade policies have historically played a critical role in influencing the structure and dynamics of international production and sourcing networks. For North Carolina, regional trade agreements, such as NAFTA and DR-CAFTA also play critical roles in maintaining a market for yarn and to a lesser extent, fabric exports.

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State & National Level Policies
Supporting Organizations

The table below lists many of the key members of the economy-wide and industry-specific textile value chain supporting environment. These entities range in geographic scope from North Carolina-centric to internationally-focused. North Carolina is home to more headquarters locations of supporting environment organizations than any other state (1). Organizations that have a location in North Carolina are marked with an (*) in the table. These are major groups that influence policy-related decisions, so having such a critical mass from multiple facets of the industry located in North Carolina is an important asset.

Table: Local to Global Supporting Environment for the Textile & Apparel Industries

Geographic Scope Business Environment Scope
Industry-specific Economy-wide
Local: State or U.S. Region

Hosiery Technology Center (HTC)*
Textile Technology Center*
NC Military Business Center*
NC Department of Commerce: International Trade Division*

Utility Providers
NC Department of Commerce: Business Developers
NC Partnerships (7)
NC Ports Authority

National

American Apparel & Footwear Association (AAFA)
National Council of Textile Organizations (NCTO)*
National Textile Association (NTA)
OTEXA
Cotton Inc.*
Synthetic Yarn & Fabric Association (SYFA)*

U.S. Customs and Border Protection
U.S. Commercial Service
Consumer Product Safety Commission (CPSC)
Food and Drug Administration (FDA)

International

ASTM Textile Committee
AATCC*
Industrial Fabric Association International (IFA)
INDA*
Nonwovens Institute & NCRC*
NCSU: College of Textiles*

International Labor Organization (ILO)
USAID
World Bank
World Trade Organization (WTO)
OECD


Source: 1

Corporate Financial Incentives

North Carolina offers several financial incentive programs to new and existing companies. The following includes some of the funds that have been administered to textile and apparel companies in North Carolina (1):

  • Job Development Investment Grants (JDIG): between 2003 and 2004, 15 companies received grant awards of which one was a textile company.
  • One NC Fund: between 1994 and 2006 awards totaling $1.6 million went to 16 textile and apparel companies representing $356.1 million in actual investments and 1,775 jobs.
  • Community Block Development Grants: from 1998 to 2006 there were 18 awards to communities in at least 11 counties based on textile/apparel companies totaling $1.05 billion.
Displaced Workers Programs

Local and national policies play an important role in encouraging economic development, but they are also in place to assist workers in the event of layoffs and closings. Given the decline in textile and apparel employment in North Carolina, an important policy area pertains to assistance available to displaced textile and apparel workers. One of the most cited cases in North Carolina was related to the closing of the Pillowtex facility.

On September 9, 2003, the U.S. Department of Labor announced TAA certification eligibility for approximately 5,000 workers laid off from Pillowtex in North Carolina, and other states to apply for Trade Adjustment Assistance services and benefits. The Pillowtex certification covered the period from August 2002 to August 2005 and enabled eligible Pillowtex workers to apply for TAA program benefits and services (3). At local One-Stop Career Centers, they obtained a broad range of reemployment and retraining services, including career counseling, job placement assistance, job search and relocation allowances and income support during approved training. The Labor Department also offered information about pension and health benefit protections.

Rapid Response efforts were put in place in North Carolina to serve employees in the Pillowtex plants with Rapid Response team meetings in several areas to provide information on the various services provided. The Pillowtex shutdown led to several workforce investment centers organizing special efforts to serve Pillowtex employees. For example, Rockingham County organized information on a special website at its Displaced Worker Resource Center for Pillowtex employees. The site included information and links for financial assistance, short-term assistance, training and reemployment, human services and counseling, referral information, and medical assistance and health insurance information.

North Carolina received National Emergency Grants (NEG) funds to help with the aftermath of the Pillowtex layoffs, including a $6.4 million grant in 2003 and two grants totaling $6.6 million in 2005 (2).

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International Policies
History of International Trade Policy

Global expansion of the apparel industry has historically been driven by trade policy. Apparel was one of the most protected of all industries, ranging from agricultural subsidies on input materials (cotton, wool, rayon) to a long history of quotas starting in the 1960s and extending into the 1970s through the mid-1990s under the Multi-fiber Arrangement (MFA). At the end of 1994, countries that wished to retain quotas committed to a gradual phase-out over a period of ten years, with the last quotas being lifted on January 1, 2005, as stated in the Agreement on Textiles and Clothing (ATC).

Most worldwide import quotas were abandoned as planned at the beginning of 2005. However, when China joined the WTO in 2001, many countries were concerned their low-cost exports would swamp the markets of many economies once quotas were phased out. As a result, a ‘textiles safeguard clause’ was written into China’s WTO accession agreement allowing importers to impose their own quotas on Chinese textile imports until December 31, 2008.

Since the beginning of 2009, countries can no longer impose quantitative restrictions or quotas on textile or apparel imports however imports are still subject to import tariffs. Since the removal of quotas, the importance of bilateral and regional trade agreements have become of increasing importance given that average apparel import tariffs are between 10-12% for the United States and the European Union, the two largest importers of apparel.

References
  1. Frederick, S. (2010). Development and Application of a Value Chain Research Approach to Understand and Evaluate Internal and External Factors and Relationships Affecting Economic Competitiveness in the Textile Value Chain. PhD Dissertation. NC State University: Raleigh, NC.
  2. United States Department of Labor, Education & Training Administration, "National Emergency Grants," Retrieved August 13, 2007.
  3. United States Department of Labor, (2004) "Report to Congress: The Past, Present and Future of Employment in the Textile and Apparel Industries: An Overview," pp.10-29.

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