“Spread the word about STA membership,” Rada encouraged attendees. “Membership is only $75 a year, and you can’t beat that.”

 

On the program, for the first time in its history, the association heard and watched a speaker via Skype. Congressman Trey Gowdy (R-S.C.) was scheduled to appear in person until a conflict came up that kept him in Washington. But modern technology enabled him to keep his commitment, and he was able to address the group and take questions.

 

“I’ve been in Upstate South Carolina for almost 50 years and I have seen the contributions of the textile industry,” he said. “I’m glad other people are seeing that the textile industry is still alive and well. I want to thank those of you in the room for providing jobs to people. Everywhere I go, I see the things you’ve done to make the world better.”

 

He went on to give his take on immigration reform and the Benghazi and IRS scandals and encouraged attendees to stay engaged with their elected officials, because feedback makes a difference.

 

“Y’all do as good a job as any industry of telling us what issues impact your industry,” Gowdy said. “Y’all are phenomenal at that. So keep letting me know what’s on your mind. Educate me. My background is in law, not business, and I need to know what issues you’re dealing with every day.”

 

During the Q&A, he was asked about the status and potential movement of the Trans-Pacific Partnership (TPA) agreement in Congress. More than 20 major rounds/meetings have occurred on the 12-country trade agreement, and the Obama Administration has targeted a conclusion date of mid-2014 – a target that has moved several times. But TPP doesn’t appear to be on Congress’ radar, Gowdy reported.

 

“I don’t think anything’s coming up any time soon,” he said. “The only time I hear about TPP is when I talk to you. It’s not from House leadership. We have a pretty modest agenda for the rest of the year because this is an even-numbered (election) year. There is disunity on the other side in terms of how to pursue. House Democrats had one position, but the president had another.

 

“Y’all are wise and good at helping out each other. Keep crafting letters. But in terms of seeing legislation or agreements, I don’t think it’s going to happen this year. And if the Senate switches (majorities) in November – and there’s about a 50-50 chance of that happening – then you may be in for two more years of a lot of talk but no action.

 

The U.S. textile industry, of course, is fighting hard to make sure its interests aren’t overlooked in any TPP deal, particularly as it relates to Vietnam.

 

The last speaker of the day, Dr. Scott Baier, associate professor of economics at Clemson University, also gave his opinion on TPP. He mentioned the agreement as he showed a slide showing the unemployment rate and employment-to-population ratio, which he pointed out is the lowest since 1981.

 

“It’s more difficult to pass trade agreements when the unemployment rate is high,” he said. “Remember, NAFTA was back here (in 1993), and it wasn’t going to pass until the unemployment rate started to go down. There’s a general tendency that when the economy is in recession, it delays the passage of these agreements. So I think TPP will be stalled as long as the unemployment rate is high. Why? Because Congressman and their constituents are going to be worried about the level of employment in their communities and any trade agreement might put in jeopardy some of those jobs.”

 

TPP deep dive

A third speaker, Auggie Tantillo, president of the National Council of Textile Organizations (NCTO), focused on TPP, which has held most of the group’s lobbying attention in recent years. But, as a caveat, he noted that NCTO is working on dozens of other issues such as regulatory matters and government procurement.

 

He also reminded attendees of some salient figures the group is using in its lobbying efforts:

 

• the U.S. textile industry shipped $56.6 billion in goods last year;

• the U.S. textile industry is the third largest exporter of textile products in the world. (Exports of all textile products were nearly $18 billion in 2013. Total textile and apparel exports were a record $23.7 billion in 2013, 4.3 percent greater than the previous year.); and

• the U.S. textile industry invested $17.7 billion in new plants and equipment from 2001 to 2011.

 

On the TPP, Tantillo explained the reasoning behind the United States’ eagerness to include Vietnam in the agreement – though the U.S. understands such a proposition is a difficult pill to swallow because Vietnam is a non-market economy.

 

Which, Tantillo said, is “a nice way to say they’re a Communist market, meaning the government owns just about everything. They own the majority of that production chain. Therefore, they have the capability to subsidize that production at any step along the way. And you and I have no way of knowing the true cost of the production is of this shirt, for example. Most economists, most rational people, would say that makes no sense.”

 

“So if you’re searching for the economic rationale, let me ask you to stop because you’re going to go blind,” he added. “There is no substantive economic rationale as to why we would do an FTA with Vietnam.”

 

The real rationale, he said, is geo-political. The U.S. has non-economic objectives it’s trying to achieve, he posited.

 

“The great thinkers in Washington believe that China is getting too popular – and they’re right,” Tantillo said. “China is now the largest owner of capital reserves in the world. They are the manufacturing capital of the world. Their military is expanding at an unprecedented rate. And there are plenty of people in the State Department, the National Security Council and the White House who believe we’ve got to do something to offset China’s growing expansion and influence, at least in the Pacific Region. So they’ve said, ‘we’re going to establish a better relationship with countries in that hemisphere. And we will have stronger economic relationships with countries such as Vietnam, which will help offset the political imbalance that is growing with China in the Pacific Region.’ Now, that is somewhat logical.”

 

But here’s the problem, he continued: “The United States is willing to trade hard, tangible, market, commercial assets in return for abstract geo-political objectives,” he said. “Five years from now, presumably we’ll be able to say we have a closer relationship with Vietnam. But you’re not going to say that’s a good deal if it costs you your job or your company.”

 

Which is the main reason the NCTO is engaged in the fight, to make sure this broad, geo-political goal doesn’t have real-world consequences that could put tens of thousands or perhaps hundreds of thousands of manufacturing jobs in jeopardy.

 

The commitment is that the U.S. will open its market to all TPP partners in the most preferential way possible, which means the elimination of barriers, Tantillo pointed out. And the supposed benefit to the U.S. is it is going to get the same thing in return, he added.

 

“The great thinkers in Washington will come to you and say, ‘and that’s a good deal. That’s fair,’ ” he said. “But when you do the math, you begin to understand that there’s nothing fair about it. If you take the combined buying power of the United States – just look at our GDP – last year it was estimated to be about $16.8 trillion. If you take the combined buying power of the other 11 countries, including Japan (added to TPP last year), you get about $6.5 trillion.

 

“When you look at Vietnam, which is the main player from our perspective, the combined buying power of the Vietnamese economy is $360 billion,” he continued. “So we give complete, duty-free access to 320 million Americans who are the greatest consuming entity in the history of mankind and in return we get duty-free access to Vietnam, which has the buying power of about half of Rhode Island. Only Washington would come to you and say, ‘that’s a good deal.’ ”

 

As previously reported, the NCTO is pushing for a more level playing field in TPP by demanding:

 

• a strong yarn-forward rule of origin and a reasonable, duty phase-out on sensitive products;

• fair market access rules and tariff elimination formulas; and

• strong and effective Customs enforcement rules.

 

Anything short of this could be devastating to the U.S. textile industry and its supply chain. All told, about 500,000 U.S. textile jobs and about 1.5 million total jobs in the Western Hemisphere are threatened by Vietnam’s inclusion – if that country’s demands are accepted.

 

“If we don’t get TPP right, it doesn’t matter what we do with anything else,” Tantillo said.

 

In making his final point, he reminded attendees of the industry’s “category 5 hurricane” that stretches back to the late 1990s, beginning with the Asian financial crisis in 1997. For the better part of 10 to 12 years, the industry saw contraction, downsizing, layoffs and plant closures, he said. That period saw the industry decline from about 1.7 million employees to the current total of just short of 500,000.

 

“What we’re telling the U.S. government is the 500,000 people who are left behind and the companies who survived are excellent at what they do,” Tantillo said. “They are globally competitive and they have proven that they can survive an incredibly bad set of circumstances. They’re actually coming back. They’re expanding. They’re producing more. They’re exporting more. They’re investing significantly. And they will continue to do so for the foreseeable future as long as the U.S. government doesn’t screw it up, as long as you don’t send us right back into a category 5 storm – this time by the name of Vietnam.”