Last week a prominent upstate textile manufacturer urged Congress to ensure a new trade agreement won’t stymie the industry’s resurgence.
Smyth McKissick, CEO of Alice Manufacturing Co. in Easley, testified before the Committee on Small Business on behalf of the National Council of Textile Organizations. He told the Subcommittee on Economic Growth, Tax and Capital Access that the proposed Trans-Pacific Partnership (TPP) must maintain textile-friendly rules and strict enforcement.
The United States is the third largest exporter of textiles in the world totaling $53 billion in 2012. The largest trade agreement since NAFTA, McKissick said the TPP “could be the U.S. textile industry’s single greatest threat since the Asian financial crisis,” which he said brought a flood of cheaper foreign textiles into the U.S. market after Asian countries devalued their currency.
The 18th round of negotiations are taking place in Malaysia this week. The TPP’s 11 partners include Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam and the United States.
In addition to challenges that arise from environmental, economic and other policies in competing countries, he said U.S. trade policy posed other potential threats.
“We also face the difficulty of the U.S. government’s tendency to trade U.S. textile manufacturing interests away to competitors for perceived gains in other policy arenas,” he said. “This does nothing more than erode the U.S. industrial base and displace workers and families in small towns and communities nationwide.”
He stressed the need for a yarn forward rule of origin that would require countries to use only member-produced yarn in their textiles in order gain U.S. market access. He was concerned about Vietnam’s involvement, specifically because of its trade and currency practices and opposition to a yarn forward rule.
He said projected job loss after 10 years of a TPP without a yarn forward rule would reach 530,000 jobs in the United States.
The subcommittee chairman, Rep. Tom Rice of South Carolina’s 7th District, also prompted McKissick to discuss the tax rate his company pays, seeking support for an argument that corporate taxes needed to be lowered. McKissick said Alice Manufacturing’s rate was in the “high 30 percent” range.
Three other witnesses addressed the committee: Michael Porter, professor at Harvard Business School; James McConeghy, CFO of Chobani; and Cynthia McIntyre, senior vice president of the Council on Competitiveness.
At the conclusion Rice, who is serving his first term, said, “this is the best panel I’ve had since I’ve been in Congress.”
