Posted September 26, 2019

CHARLESTON, S.C. – Last week, I covered the National Council of Textile Organizations (NCTO) Fall Fiber Council meeting here and, although much of the content shared was off the record to the press, it was meaningful and worthwhile in terms of information exchange and relationship building.

David Poston, president of Palmetto Synthetics, Kingstree, S.C., emceed the program as chair of the Fiber Council.

During a briefing, council staff updated members on a number of issues impacting the industry, most importantly the U.S.-Canada-Mexico (USMCA), of course. The “renegotiated NAFTA” is sitting idly in Congress awaiting a vote, and the NCTO is heavily engaged in the push to bring the agreement to a vote. Many textile and apparel producers are on the side of its passage, as a number of loopholes that negatively affect the industry were closed in the USMCA.

Too many, shall we say, “ancillary issues” – more of which developed this week, as you well know – are keeping Congress’ eyes off the USMCA ball, or anything else that would give President Trump a victory. But, politics aside, I urge any of you who sees this as a win for your business AND your industry to continue to reach out to your federal elected officials to stress the importance of its passage. At some point, enough pressure may help carry this deal over the goal line.

Other issues discussed were the China 301 IPR case, the Miscellaneous Tariff Bill (MTB), the National Defense Authorization Act (NDAA) and Generalized System of Preferences (GSP) expansion – the latter of which should be especially concerning. Yep, just when you thought it was safe to say, “We’re back,” along comes another potential peril that could undermine the incredible trajectory of U.S. manufacturing. Importers are pushing lawmakers to expand GSP, which would give non-reciprocal U.S. tariff-free access to 119 countries and territories. (You read that number right.)

“The proposal in question would, for the first time, allow exporters in GSP countries — many of which are widely cited for weak labor, environmental and human rights standards — to ship finished textile, apparel and footwear products to the United States duty free,” NCTO Chairman & CEO Kim Glas wrote in an editorial for Morning Consult this month. “U.S. manufacturers would receive nothing in return but rather would continue facing prohibitory trade barriers and tariffs on U.S. exports to these countries.”

China, the No. 1 fiber, yarn and fabric supplier to GSP countries, would emerge the big winner should this proposal come to fruition, so we need to keep an eye on this ill-conceived issue – the kind reminiscent of those that helped dismantle a large part of the U.S. textile industry in the years around the turn of the century.

On the general economic side, Dr. Bill Adams, senior economist at PNC Financial Services Group, said in a presentation that his organization sees the slowdown continuing, but they’re not forecasting a recession. But, he cautioned, the U.S.-China trade war is the wildcard in the deck.

“Both sides believe they hold the leverage, so the trade war seems likely to drag on,” he said.

Meanwhile, Laura Murphy, director Wood Mackenzie Chemicals, provided a deep-dive into the fiber market, and Frederic Van Houte, director general of the CIRFS, offered a European market update. CIRFS, a trade association based in Brussels, boasts members representing more than 80 percent of European manmade fiber production.

Other speakers included Paul Rosenthal, partner at Kelley Drye & Warren LLP, who offered a trade update, and keynoter Arthur Friedman, senior editor at Sourcing Journal.

One of the highlights of the event was the presentation of the 2019 Paul T. O’Day Memorial Scholarship Award. Recipient Reagan Dunnam, a freshman pursuing a degree in Fashion and Textile Management at the N.C. State Wilson College of Textiles, was unable to attend due to exams, but her parents Robert and Jennifer accepted on her behalf.

The scholarship program was created in 2014 in honor of Paul T. O’Day, who served as president of the American Fiber Manufacturers Association (AFMA) for more than three decades. The association merged with the NCTO in April 2018, and NCTO’s Fiber Council now administers the scholarship program.

Recipients receive a $5,000 award each year, totaling $20,000 for four years of study. Sons or daughters of NCTO’s Fiber Council member company employees are eligible to apply. Jennifer Dunnam, also an alumnus of N.C. State, works for Fiber Industries LLC.