U.S. Textile and Apparel Industries and Rural America: Federal Programs and Policies
How workers, farms, firms, and communities adjust to
the change brought on by expiration of Multifiber Arrangement
(MFA) quotas in 2005 depends on many factors. There are
several existing programs that assist workers and communities
adversely affected by trade, and also several policy
instruments that may be invoked that could affect the
trade situation. In addition, farm policies affect the
profitability of cotton production.
Worker Programs
The U.S. Department of Labor administers the Trade
Adjustment Assistance (TAA) and Alternative Trade Adjustment
Assistance
(ATAA) programs. These programs assist workers who have
lost their jobs as a result of increased imports or because
production shifted to a foreign country. TAA benefits
include income support, relocation allowances, job search
allowances, a health coverage tax credit, and occupational
training if desired. The ATAA program allows older workers
to accept reemployment at a lower wage and receive a
wage subsidy. Workers aged 50 and over may apply for
both the TAA and ATAA programs, and then choose which
program they wish to participate in.
To be eligible for benefits, a worker group must first
request certification as workers adversely affected by
trade. If a worker group is certified, then individual
workers within that group may apply for TAA or ATAA benefits.
Manufacturer Programs
The U.S. Department of Commerce's Trade
Adjustment Assistance for Firms program provides financial assistance
to manufacturers affected by import competition. This
cost-sharing program pays for half (up to $75,000) the
cost of consultants or other experts for projects to
improve a firm’s competitiveness. Project areas
include marketing, engineering, information technology,
and quality.
Southern States have taken the lead in funding research
to identify and develop new markets and providing outreach
to modernize textile and apparel plants. Clemson
Apparel Research and Catawba
Valley Community College’s
Hosiery Technology Center in South Carolina and North
Carolina State University’s College
of Textiles support a number of initiatives to revitalize the textile
and apparel industry through the appropriate application
of technology and management practices. Most States in
the South have at least one public college or university
with a specialization in the industry. Many of these
programs are linked with the Manufacturing
Extension Partnership—a collaborative program of the Federal
Government, State governments, and industry to increase
the competitiveness
of small U.S. manufacturers—which provides assistance
in adopting technology or new management practices, available
in all 50 States.
Community Programs
Communities that lose population and employment because
of developments in the textile and apparel industries
may need more help from Federal programs than provided
by general community assistance. Population loss can
lead to problems such as job loss, declining sales for
businesses, declining revenues for local government,
and declining house values. Federal assistance comes
in many forms, including assistance for housing, infrastructure,
transportation, education and training, welfare, and
health. Of particular importance are:
Trade Policies
Although MFA quotas have been completely phased out,
other policy instruments, such as tariffs and preferential
agreements, will affect the market. Global tariffs on
textiles and apparel remain significantly higher than
for most other manufactured products. Nontariff trade
barriers are also a factor, including anti-dumping duties,
import “rules of origin,” safeguards, elaborate
custom procedures, stringent labeling requirements, and
outright bans on apparel imports. Countries with preferential
market access typically pay lower tariffs, and this will
also influence production and trade.
For more information, see Textile
and Apparel Trade After the Multifiber Arrangement.
Cotton and Farm Policies
Cotton policies affect southern States as cotton-related
industries, infrastructure, and consequently, employment,
have developed around cotton production. While production,
use, and trade of cotton have become more efficient in
the United States, cotton policies have evolved as globalization
has expanded. As there is much overlap between cotton
production areas and textile and apparel plant location,
current and future cotton programs will
be another factor in determining the net effect of the
expiration of the
MFA.
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