Countdown to quota elimination
February 2, 2004,
NEW YORK — Hanging like a cloud over 2005 — and raising the hackles of big textiles producers — is the scheduled Jan. 1 elimination of textiles quotas between the United States and low-cost exporting nations, with China looming largest of all.
What does it all mean? A panel of textiles executives thrashed out the issue at a January seminar sponsored by Financo Inc. — a retail and textiles industry financial consultant — at its annual Chief Executives dinner. The participants included CEOs of Li & Fung Limited, VF Corporation, Liz Claiborne and Kellwood Company, along with the global director of Deloitte Research. Among their opinions:
Even if quotas disappear on schedule in 2005 — and he's not certain they will — Mackey McDonald, chairman and CEO of VF Corp., parent of Wrangler jeans, said he's not expecting a flood of textile imports into the United States.
China has rapidly become "the world's factory," seizing the smoke-stack operations of more highly developed countries, notably the United States, and sending back a torrent of low-cost imports, said Ira Kalish, global director, Deloitte Research.
When it comes to sourcing in a quota-free world, said W. Lee Capps III, president of operating services, Kellwood Co., "Remember that import limits will be removed in January — kind of." The reality is that "a sourcing strategy should be based on some restrictions continuing."