Just how serious are imports in US textile downturn?
Like many other basic industries in America, textiles have been blasting an order at the Reagan administration: Clamp down on imports! Last week the administration tried to do just that with the People's Republic of China, but negotiations broke down. For the year ending last November, Chinese textile and apparel exports to the United States increased 21 percent over the previous year.
But although Chinese and other East Asian imports are tearing into American textiles, textiles are still better off than other hard-hit industries in the US. Total US textile sales increased roughly $3.5 billion, at an 8.9 percent annual growth rate, every year from 1978 to 1981. And although some industries are operating at less than 50 percent of capacity, the utilization rate for textiles is 65 to 70 percent.
''The major (textile) companies we're familiar with are not the ones that have been really hurt by imports,'' says Rudy Macher, a textile analyst with Standard & Poor's Corporation. Mr. Macher says ''the larger and more prudent companies'' began to arm themselves against imports in the 1960s by changing their product lines, modernizing plants, and moving some of their manufacturing overseas to get cheaper labor.
It looks as if 1982 profits for major producers will be down significantly, although analysts say this is because of the recession more than anything else, including imports.
Over the years, the major companies have been consolidating operations and modernizing. And while their financial position has benefited from improved cost control, labor has suffered in the process.
Says Mr. Macher, ''Imports are hurting labor, not flexible companies.''
The companies most affected by imports have been apparel producers rather than textile mills. ''If you take domestic consumption of apparel, 42.5 percent of that consumption is imports,'' says Dr. Herman Starobin, director of research at the International Ladies' Garment Workers' Union.
In 1982, unemployment in the textile/apparel industry was 12.1 percent, with 313,600 industry workers off the job, according to the American Textile Manufacturing Institute. The national unemployment average was 9.6 percent.
''The primary cause for the decline in employment in textiles and apparel has been recession, not imports,'' says Richard Newfarmer, senior fellow and economist with the Overseas Development Council.
But others disagree. ''Many small, rural mills in the South are being hurt by imports,'' says Walter Lenahan, deputy assistant secretary for textiles and apparel at the International Trade Administration.
Mr. Lenahan, who was present at the Chinese negotiations last week, said that the smaller plants ''don't have the ability to vary product lines,'' so they can't protect themselves from imports. ''They are in small towns in Georgia, North Carolina, and South Carolina, and they are often the only major employer in that town,'' he says.
But even with this explanation, it's hard to pinpoint where the damage is. ''You're dealing with 20 major lines of apparel and it's hard to zero in and say that this one or that one is doing poorly because of imports,'' says one industry official who was also at the Chinese negotiations.
''All I know is, production is down, imports are up, and the consumer is not buying,'' he said.
The textile/apparel industry argues that it's not being protectionist by pressing for tougher import restrictions. ''We just want to be fair,'' Mr. Starobin says.
He says ''fair'' means limiting growth in imports to match growth in the US textile market. ''Using constant dollars, domestic production declined by about 10 percent last year and imports were up by 61/2.'' That's not fair, he says. For the previous 10 years, the US textile/apparel market had averaged 1.5 percent growth each year.
The Reagan administration has made it clear it agrees with this equalizing policy. But it is not willing to roll back agreements already in place. So for the moment, export growth for the ''big three'' textile/apparel exporters (Taiwan, South Korea, and Hong Kong) is limited to 1 to 2 percent. If the equalizing policy were working the way industry wants, these East Asian imports would have decreased last year, since the US market declined.
Unemployment in the industry and the administration's support of ''equalizing'' trade are major reasons behind America's hard stance with the Chinese. At the negotiating table last week, the US tried to limit China's export growth to 1.5 to 2 percent. China argued for a firm 6 percent. When the talks broke down, the US enforced new quotas, and this week, the Chinese retaliated by banning imports of certain US goods, including cotton, chemical fibers, and soybeans. Now, Chinese textile imports have 11 percent of the US market.
''China is becoming more and more of a factor,'' Mr. Lenahan says. The products from China doing the most damage are printed cloth, wool sweaters, gloves, knit shirts, and trousers, the industry associations say. Mr. Lenahan believes ''some agreement will be made with China,'' but imports are still an issue, because other textile exporters are now more active.