SOURCE: Retail consumption of fibers is estimated by deriving the "net domestic consumption", which is equal to domestic mill use plus cotton textile imports minus cotton textile exports-all expressed on a raw fiber equivalent basis. Mill use and yardage of imports and exports are estimated by the U.S. Bureau of the Census, with the raw fiber equivalent of cotton textile imports and exports is estimated by USDA, ERS, NED. All these data are reported in selected issues of Cotton and Wool Situation and Outlook. CLAIM: Cotton textile imports account for over half of apparel consumption. Furthermore, 68% of men's cotton sport coats are imported, 59% of children's cotton playsuits are imported, and 62% of women's cotton shirts and blouses are imported. SOURCE: Estimates of domestic apparel production in 1986 were taken from the National Cotton Council's Cotton Counts Its Customers, 1987 edition. Estimates of apparel imports in 1986 were taken from the Office of Textiles and Apparel, U.S. Department of Commerce, Major Shippers Report: Selected Import Statistics on Textiles and Apparel by Category and by Country, January 1987. Results indicate that cotton textile imports account for almost 52% of all apparel available in the U.S. market. Note: Due to the unavailability of complete data in pounds of raw fiber, all of the numbers in these calculations were expressed in square yards. CLAIM: In 1986, China's textile exports to the U.S. increased 65%. SOURCE: Office of Textile and Apparel, U.S. Department of Commerce, Major Shippers Report: Selected Import Statistics on Textiles and Apparel by Category and by Country, March 1987. On a square-yard basis, the increase was 65.8%. USDA's conversion to raw fiber equivalent indicated an increase of 66.2%. 2 Mr. GREGG. Mr. Chairman, we would like to introduce a very important member of our coalition, Robert Slosberg, who is chairman of the national affairs committee for the Footwear Industries of America. He is also president of Ripley Industries in St. Louis. Robert. STATEMENT OF ROBERT H. SLOSBERG, CHAIRMAN, NATIONAL AFFAIRS COMMITTEE, FOOTWEAR INDUSTRIES OF AMERICA, AND PRESIDENT, RIPLEY INDUSTRIES, INC., ST. LOUIS, MO. Mr. SLOSBERG. Mr. Chairman, thank you. Chairman GIBBONS. Before you start, I just want you to know I have got on my Made in America shoes. Mr. SLOSBERG. Thank you, sir. We hope that everyone else does, too. Chairman GIBBONS. All the rest of my clothes are made in America, too. Mr. SLOSBERG. That is even a better blessing for all of us. I am Robert Slosberg, president of Ripley Industries. We are a supplier to the domestic footwear industry and to the textile and apparel industry, headquartered in St. Louis, Mo., with facilities in Missouri, New Hampshire, and Maine. As Mr. Gregg said, I also serve as chairman of the National Affairs Committee of the Footwear Industries of America, a trade association representing domestic manufacturers of nonrubber footwear and its suppliers. The nonrubber footwear industry strongly supports the passage of H.R. 1154. No major manufacturing industry in this country has been as hammered by imports as has the nonrubber footwear industry. No other industry has seen so much of the U.S. market lost to imports so rapidly or has lost as much production and as many jobs in proportion to its size because of imports as have we. No other industry has worked so hard or availed itself of as many of the trade statutes to little or no avail as have we. If this industry is to survive, we are left with no other option than H.R. 1154. Let me give you a brief synopsis of what has happened in the last 20 years. After experiencing in the year 1986, where the import penetration level reached 81 percent, the highest level ever, it is hard to believe that imports ever took less than 10 percent of the U.S. market. Yet this was true as late as 1963. Since that time, shoe imports have steadily edged upwards reaching 368 million pair, or 40 percent of the U.S. market in 1977, the year when the orderly marketing agreements with Korea and Taiwan went into effect. When the OMA's were not extended by President Reagan in 1981, U.S. shoe production and U.S. imports were roughly equal, with imports accounting for just one-half of our market. In every year since 1981, however, the U.S. production level has fallen as imports have grown by 100 million pair per year. Clearly, without some action to stem this flood of imports, they will continue until the U.S. industry is entirely eliminated. Domestic production has been forced to shrink. It peaked at 642 million pair in 1968. During the OMA period, production declined at about 3 percent per year. Since the end of the OMA's, the de cline have been much more dramatic: 11 percent between 1983 and 1984; 12 percent between 1984 and 1985; and another 12 percent between 1985 and 1986. Thus, in slightly more than 10 years, domestic production has been cut in half due to the rising level of imports into this country. Since 1981, over 300 plants have been closed. The industry in 1981 employed 146,000 workers in direct manufacturing alone and another 95,000 in support industries. Last year, the industry employed only 93,000 workers in direct manufacturing with concurrent declines among the suppliers. The nonrubber footwear industry employs a large proportion of women and minority workers who, due to the nature of the work involved in making shoes, are generally without the skills required to find new employment readily. Further, many footwear factories are located in rural areas where they provide the main or sole source of employment in that area. We have not sat helplessly by and watched our industry go down the drain. We placed our trust and confidence in the laws of the land and the commitments of our government officials, only to be sadly disabused by failure to deliver effective section 201 import relief, or, indeed, any import relief. Over the years, the domestic footwear industry has utilized existing trade remedy laws in good faith only to be denied justified import relief at critical junctures. Had effective import relief been granted at these times, our industry would most certainly be more vibrant and successful than it is now, and we would probably not be here today asking for passage of this legislation. As it is, we have no alternative but to seek a legislative solution, one which will simply permit us to hold on to the small remaining portion that is left of our industry. Our odyssey here today is strewn with unsuccessful attempts to gain relief under the trade laws. The Reagan administration has twice refused to grant this industry import relief under the "escape clause" following unanimous and affirmative decisions by the International Trade Commission. The overwhelming majority of this industry's petitions under section 301, against eight countries, alleging numerous unfair trade practices, was all but dismissed by this same administration. We have undertaken seven countervailing duty cases-Spain, Brazil, Argentina, Taiwan, Korea, Uruguay, India-against developing countries which subsidize their exports of footwear to the United States market. Relief, when it has come, has been too little and too late. The case of Brazil is illustrative of the problem. The third largest supplier to the U.S. market, Brazil not only violated its commitment to offset its rebate of export taxes on footwear, but has repeatedly violated its commitment under the Subsidies Code to terminate its subsidies. With respect to the latter, Brazil claimed balance of payment problems, the United States failed to act, and Brazil continues to receive the injury test. We could go on and on, but in brevity we will leave it with that. While this administration has surely helped bring about the decline of our industry, former administrations are not blameless. President Nixon provided no import relief for this industry even though he had initiated the case in 1970. The Ford administration responded to another escape clause case by rejecting import relief despite a commitment that he would provide it if the industry petitioned under the escape clause. Only President Carter granted our industry relief through two orderly marketing agreements, but that relief was flawed. And President Reagan, despite a unanimous, affirmative ITC recommendation that relief be continued, turned the industry down in mid-1981. Is it any wonder why we are turning to the Congress for relief that the ITC says we deserve, but the White House has denied? Chairman GIBBONS. You do know that in the new trade bill we change the law on that? Mr. SLOSBERG. Sir, with all due respect, the new bill has not been enacted into full legislation. If we keep going this way, we will not have time. Chairman GIBBONS. I know that. I just wanted to make sure you understood that. Mr. SLOSBERG. Yes, sir. I am aware of that. Chairman GIBBONS. We were concerned about that decision. Mr. SLOSBERG. Despite these almost insurmountable difficulties, real efforts are being made by the industry to become more competitive. Many footwear manufacturers and their suppliers have begun Just in Time programs, a new form of inventory management based on the Japanese, by the way. Our Quick Response Program allows us to take advantage of the proximity to our own market by responding more quickly to retailers' needs, including being tied directly from shoe manufacturers into the retailers so we know exactly what they are selling almost hour by hour and can replenish stocks. Computer-aided design systems and computer-aided manufacturing are revolutionizing the way that shoes are made and helping us compete with third-world manufacturers. The problem for the industry is that the tremendous import surges of the last 5 years have increasingly deprived our firms of profits that can be reinvested in new technology, but also the confidence that the investments will pay off in increased, or even stable, production levels. H.R. 1154 is far from Draconian. It does not roll imports back below the record high 1986 import level. It does provide our industry with the certainty as to what imports will be in the future to permit us to plan for the future, albeit with but 20 percent of the market. We urge the subcommittee to report out H.R. 1154 favorably. I thank you very much. [The statement of Mr. Slosberg follows:] TESTIMONY OF ROBERT H. SLOSBERG, TO SUBCOMMITTEE ON TRADE, COMMITTEE ON WAYS AND MEANS, I am Robert H. Slosberg, President of Ripley Industries, Inc. We are a supplier to the domestic footwear industry based in St. Louis, Missouri, and with facilities in Missouri, New Hampshire and Maine. I also serve as Chairman of the National Affairs Committee of Footwear Industries of America, the trade association representing domestic manufacturers of nonrubber footwear and its suppliers. The nonrubber footwear industry strongly supports the passage of H.R. 1154 by Congress. I: No major manufacturing industry in this country has been as hammered by imports as has the nonrubber footwear industry. No other industry has seen so much of the U.S. market lost to imports so rapidly as has the nonrubber footwear industry. No American industry has lost as much production and as many jobs in proportion to its size because of imports as has our industry. No other industry has worked so hard or availed itself of as many of the trade statutes and to little or no avail as we have. If this industry is to survive, we are left with no other option than H.R. 1154. - - Let me recount for you what has happened to this basic American industry over the last twenty or so years. ever Right now, after experiencing a year where the import penetration level reached 81 percent the highest level it is hard to believe that imports ever took less than 10 percent of the U.S. market. Yet this was true as late as 1963, which was really not so long ago. Since that time, shoe imports have steadily edged upwards, reaching 368 million pairs, or 47 percent of the U.S. market, in 1977, the year when Orderly Marketing Agreements with Korea and Taiwan went into effect. When the OMAs were not extended by President Reagan in 1981, U.S. shoe production and U.S. imports were roughly equal, with imports accounting for just one half of our market. In every year since 1981, however, the U.S. production level has fallen as imports have grown by 100 million pairs per year. In 1986 shoe imports totalled 941 million pairs 12 percent higher than the import level in 1985. If 1987 should see another 12 percent increase in imports, U.S. shoe imports would be well over 1 billion pairs. Clearly, without some action to stem this flood of imports, they will continue until the U.S. industry is wiped out entirely. While this tremendous growth in imports has been occurring, domestic production has been forced to shrink. Domestic production peaked at 642 million pairs in 1968. During the OMA period, production declined at about 3 percent per year. Since the end of the OMAS, the declines have been much more dramatic: 11 percent between 1983 and 1984, 12 percent between 1984 and 1985, and another 12 percent between 1985 and 1986. Thus, in slightly more than ten years, domestic production has been cut in half due to the rising level of imports into this country. Lower production levels and higher import levels have taken their toll on domestic companies, which have been forced to close plants permanently. Since 1981, over 300 plants have been closed. Over one hundred of these closings occurred in one year alone. |