Introduction
In 1994 the U.S. textile and apparel industry complex employed about 1.5 million
workers, and they have since then produced output worth at least $50 billion every year (U.S.
Department of Labor). The latest figures from the U.S. Department of Labor’s Bureau of Labor
Statistics show that the U.S. textile industry complex has been losing jobs since 1994 when the
North American Free Trade Agreement (NAFTA) was ratified. In particular, the industry
complex has lost 441,800 jobs from January 2000 through April 2005. The National Council of
Textile Organizations (NCTO) claims that there have been 354 plant closings from 1997 to date,
of which more than half (131 and 80, respectively) have occurred in North and South Carolina.
Both textiles interest groups and the popular press blame job losses and plant closings on import
surges to the U.S. (ATMI, 2001; Patterson, 2004).
Kletzer (2001) analyzed the relationship between rising import shares and job decline and
concluded that for the U.S. textile and apparel complex the costs of import-competing job losses
are high. Gleaning from Figure 1, U.S. exports of textile and apparel grew from $12 billion in
1994 to $15 billion in 2003. At the same time, the U.S. imported $45 billion worth of textile and
apparel in 1994 and $82.8 billion in 2003; contributing to more than doubling the textile and
apparel trade deficit from about $33 billion in 1994 to $68 billion in 2003. Figure 2 also shows
that the share of imports relative to domestic consumption rose from 37% in 1994 to 66% in
2003. Therefore it appears that growth in U.S. textile exports has been relatively miniscule while
imports as a share of domestic demand have continued to spiral.
Trade in textiles has historically been governed by quantitative restrictions. From the
1970s through 1995, the Multifibre Arrangement (MFA) governed the bulk of world textile and
apparel trade, with textile and clothing quotas being negotiated bilaterally between trading
1