US Textile Industry Opposes Duty Preference for Bangladesh and Cambodia

The US National Council of Textile Organisations (NCTO) Vice Chairman David Hastings urged the Congress to reject proposals to extend duty free preferences in textiles to Bangladesh and Cambodia and to refrain from make changes to textile preference rules that could result in large jobs losses in the US.  

Hastings, who is the CEO of Mount Vernon Mills, one of the largest textile employers in the US, explained that Mount Vernon’s Trion Georgia plant advertised several openings and people started lining up at 4 am just to apply and by noon 270 applications have been taken.

Hasting warned that changes in trade rules to give new preferences to large and growing exporters such as Bangladesh and Cambodia would force the Trion plant and many other US textile mills to close. He told the Committee, “Their livelihoods literally rest in your hands.” 

Hastings cited a letter that 45 trade groups from 29 countries sent to the Committee opposing any new benefits for Bangladesh or Cambodia. The trade groups included major exporters from North and South America, Africa, Middle East and 9 least-developed countries, including Haiti. 

The trade groups noted that apparel exports from Bangladesh and Cambodia have grown by 63% during the last five years while apparel exports from the preference and free trade countries have fallen by 38%. Exports of the top product categories from the major preference and FTA countries have fallen 40% from 2004-8, while exports of the same products from Bangladesh and Cambodia have increased by 194%. The groups explained that apparel exports from Bangladesh and Cambodia to the U.S. are already enormous, totaling $5.5 billion - six times what Africa ships and twelve times what Haiti ships.  

The groups cited a statement by the head of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) that Bangladesh expected to nearly triple its worldwide exports over the next five years and add 1.4 million apparel jobs, even without trade preferences being granted.  

The groups explained that they have been told by many of the largest companies that source goods in Africa and the Western Hemisphere that they will move their sourcing to Bangladesh and Cambodia if this proposal becomes law. Under the proposal, retailers and importers would immediately save one billion dollars in duties. 

Hasting also noted that if duties are removed, importers would get at least one billion dollar in duties savings that would have otherwise been paid to the US. Treasury. In addition, Bangladesh pays the lowest wage rates in the world and is repeatedly cited for illegal labor practices.

Back to Index of December 2009