Federal Programs and Policies
How workers, farms, firms, and communities adjust to the change
brought on by expiration of Multifiber Arrangement (MFA) quotas in
2005 depends on many factors. There are several existing programs
that assist workers and communities adversely affected by trade,
and also several policy instruments that may be invoked that could
affect the trade situation. In addition, farm policies affect the
profitability of cotton production.
The U.S. Department of Labor administers the Trade
Adjustment Assistance (TAA) and Alternative Trade Adjustment
Assistance (ATAA) programs. These programs assist workers who
have lost their jobs as a result of increased imports or because
production shifted to a foreign country. TAA benefits include
income support, relocation allowances, job search allowances, a
health coverage tax credit, and occupational training, if desired.
The ATAA program allows older workers to accept reemployment at a
lower wage and receive a wage subsidy. Workers aged 50 and over may
apply for both the TAA and ATAA programs, and then choose which
program they wish to participate in.
To be eligible for benefits, a worker group must first request
certification as workers adversely affected by trade. If a worker
group is certified, then individual workers within that group may
apply for TAA or ATAA benefits.
The U.S. Department of Commerce's Trade Adjustment
Assistance for Firms program provides financial assistance to
manufacturers affected by import competition. This cost-sharing
program pays for half (up to $75,000) the cost of consultants or
other experts for projects to improve a firm's competitiveness.
Project areas include marketing, engineering, information
technology, and quality.
Southern States have taken the lead in funding research to
identify and develop new markets and providing outreach to
modernize textile and apparel plants. Clemson Apparel
Research and Catawba Valley Community College's Hosiery
Technology Center in South Carolina and North Carolina State
University's College of Textiles support a number of
initiatives to revitalize the textile and apparel industry through
the appropriate application of technology and management practices.
Most Southern States have at least one public college or university
with a specialization in the industry. Many of these programs are
linked with the Manufacturing Extension Partnership--a
collaborative program of the Federal Government, State governments,
and industry to increase the competitiveness of small U.S.
manufacturers--which provides assistance in adopting technology or
new management practices, available in all 50 States.
Communities that lose population and employment because of
developments in the textile and apparel industries may need more
help from Federal programs than is provided by general community
assistance. Population loss can lead to problems such as job loss,
declining sales for businesses, declining revenues for local
government, and declining house values. Federal assistance comes in
many forms, including assistance for housing, infrastructure,
transportation, education and training, welfare, and health. Of
particular importance are the following:
Although MFA quotas have been completely phased out, other
policy instruments, such as
tariffs and preferential agreements, will affect the market.
Global tariffs on textiles and apparel remain significantly higher
than for most other manufactured products. Nontariff trade barriers
are also a factor, including anti-dumping duties, import "rules of
origin," safeguards, elaborate custom procedures, stringent
labeling requirements, and outright bans on apparel imports.
Countries with preferential market access typically pay lower
tariffs, which will also influence production and trade.
For more information, see
Textile and Apparel Trade After the Multifiber Arrangement.
Cotton and Farm Policies
Cotton policies affect Southern States because cotton-related
industries, infrastructure, and consequently, employment, have
developed around cotton production. As U.S. production, use, and
trade of cotton have become more efficient and globalization has
taken hold, cotton policies have evolved. Because there is much
overlap between cotton production areas and textile and apparel
plant locations, current and future cotton programs
will be another factor in determining the net effect of the
expiration of the MFA.