Below the belt
December 17, 2001,
Home textiles vendors have long held the belief that retailers care little whether U.S. supplier companies live or die. But a far more shocking outlook on the matter turned up last week when the National Retail Federation fired off a letter to the Congressional leadership to express its "outrage and disappointment" over concessions made with the textiles industry to ensure the passage of Trade Promotion Authority legislation.
Renewal of the TPA, which expired during the Clinton term, allows the president to negotiate trade pacts without passing them through Congress. The measure passed the House on Dec. 6 by just one vote — 215 - 214 — and in the deal-making process beforehand, House leaders promised that the next trade bill to come through will require that U.S. yarn and fabric used to produce garments in Caribbean and Andean nations must be dyed and finished in the United States.
"It is particularly galling to find our interests ignored and matters of importance to our industry traded away in order to placate an industry that never supported TPA and has vehemently opposed nearly every major trade initiative," NRF president and ceo Tracy Mullin said in the letter, which was addressed to House Speaker Dennis Hastert; Majority Leader Dick Armey; and Majority Whip Tom DeLay.
"When some of the largest and oldest retailers in the country, such as Montgomery Ward and Bradlees, have gone bankrupt with the loss of tens of thousands of retail jobs, and other retailers are struggling — and when other industries have lost hundreds of thousands of jobs — it is high time for Congress and the federal government to stop treating the textile industry as some special case deserving of extraordinary treatment."
The whole notion that textiles vendors are being coddled — by anyone, let alone Congress — is a jaw-dropper in itself. What's particularly interesting about the NRF's screed is that the concession it addresses — which affects garment-making in countries making up the Caribbean Basin Partnership Act signed last year — is not even a huge part of the import market.
Understand that the NRF is huge, representing large chains as well as mom-and-pops, along with 50 state associations and 32 national retail associations. Its membership includes nearly every big gun in the retail industry, and quite a few small ones — from Federated and Fortunoff to JCPenney and Sears; from Target Corp. to ShopKo; from Belks to Crate & Barrel.
Which is why the vociferousness of its response to the TPA concession is so significant — particularly when one considers the scope of the trade measures with which Congress will grapple in the near future.
It is yet another indication that retailers will spare no quarter in the sphere of globalization. Vendors that want to survive need to get their ducks in a row very quickly, forge firm but flexible partnerships and get their distribution systems as precisely calibrated as the finest Swiss watch.
The gloves are off.