Broadwoven Fabrics

USITC Publication 3410

March 2001

OFFICE OF INDUSTRIES

U.S. International Trade Commission

Washington, DC 20436
UNITED STATES INTERNATIONAL TRADE COMMISSION

This report was prepared principally by

Kimberlie A. Freund and

Marjorie J.T. Norton, Professor

Clothing and Textiles

Virginia Polytechnic Institute and State University

Textiles and Apparel Branch

Energy, Chemicals, and Textiles Division

Vern Simpson

Robert A. Rogowsky

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

Director of Operations

Director of Industries

COMMISSIONERS

Marcia E. Miller

Deanna Tanner Okun, Vice Chairman

Stephen Koplan, Chairman

Jennifer A. Hillman

Lynn M. Bragg

Dennis M. Devaney
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ITS: Broadwoven Fabrics
 

1

 The information and analysis provided in this report are for the purpose of this report only. 

Nothing in this report should be construed to indicate how the Commission would find in an

investigation conducted under statutory authority covering the same or similar subject matter.

i

PREFACE

In 1991 the United States International Trade Commission initiated its current Industry and

Trade Summary series of informational reports on the thousands of products imported into

and exported from the United States. Each summary addresses a different

commodity/industry area and contains information on product uses, U.S. and foreign

producers, and customs treatment. Also included is an analysis of the basic factors affecting

trends in consumption, production, and trade of the commodity, as well as those bearing on

the competitiveness of U.S. industries in domestic and foreign markets.1

This report on Broadwoven Fabrics covers the period 1994 through 1999. Listed below are

the individual summary reports published to date on the energy, chemicals, and textiles

sectors.

USITC

publication Publication

number date Title 

Energy and Chemicals:

2458 November 1991 ......... Soaps, Detergents, and

 Surface-Active Agents

2509 May 1992 .............. Inorganic Acids

2548 August 1992 ............ Paints, Inks, and Related

 Items

2578 November 1992 ......... Crude Petroleum 

2588 December 1992 .......... Major Primary Olefins

2590 February 1993 .......... Polyethylene Resins in

 Primary Forms

2598 March 1993 ............ Perfumes, Cosmetics, and

 Toiletries

2736 February 1994 .......... Antibiotics

2739 February 1994 .......... Pneumatic Tires and Tubes

2741 February 1994 .......... Natural Rubber

2743 February 1994 .......... Saturated Polyesters in 

 Primary Forms

2747 March 1994 ............ Fatty Chemicals

2750 March 1994 ............ Pesticide Products and

 Formulations

2823 October 1994 ........... Primary Aromatics
ii

PREFACE–Continued

USITC

publication Publication

number date Title 

Energy and Chemicals--Continued:

2826 November 1994 ......... Polypropylene Resins in

 Primary Forms

2845 March 1995 ............ Polyvinyl Chloride Resins in

 Primary Forms

2846 December 1994 .......... Medicinal Chemicals, except 

 Antibiotics

2866 March 1995 ............ Hose, Belting, and Plastic Pipe

2943 December 1995 .......... Uranium and Nuclear Fuel

2945 January 1996 ........... Coal, Coke, and Related Chemical

 Products

3014 February 1997 .......... Synthetic Rubber

3021 February 1997 .......... Synthetic Organic Pigments

3081 March 1998 ............ Explosives, Propellant Powders, 

 and Related Items

3082 March 1998 ............ Fertilizers

3093 March 1998 ............ Adhesives, Glues, and Gelatin

3147 December 1998 .......... Refined Petroleum Products

3162 March 1999 ............ Flavor and Fragrance Materials

Textiles and apparel:

2543 August 1992 ............ Nonwoven Fabrics

2580 December 1992 .......... Gloves

2642 June 1993 .............. Yarn

2695 November 1993 ......... Carpets and Rugs

2702 November 1993 ......... Fur Goods

2703 November 1993 ......... Coated Fabrics

2735 February 1994 .......... Knit Fabric

2841 December 1994 .......... Cordage

2853 January 1995 . . . . . . .... Apparel 

2874 April 1995 ............. Manmade Fibers

3169 March 1999 ............ Apparel

3170 March 1999 ............ Home Textiles
iii

CONTENTS

Page

Preface ................................................................ i

Abstract .............................................................. 1

Introduction ......................................................... 3

Products and end uses ...................................................... 3

Production process ........................................................ 4

Yarn spinning ......................................................... 4

Weaving and yarn preparation ............................................. 6

Finishing ............................................................. 7

Factors of production ....................................................... 7

U.S. industry profile ............................................... 8

Industry structure ......................................................... 8

Recent trends ............................................................. 10

Business strategies ......................................................... 14

Restructuring ......................................................... 14

Product-focused strategies ................................................ 15

Strategic alliances ...................................................... 16

Global strategies ....................................................... 17

Technology and productivity ................................................. 19

Yarn preparation and weaving ............................................. 20

Dyeing and finishing .................................................... 20

CAD/CAM systems .................................................... 22

Health, safety, and environmental regulations ..................................... 22

U.S. market ..................................................... 23

Consumer characteristics and factors affecting demand ............................. 23

Apparel .............................................................. 24

Home textiles ......................................................... 25

Bed and bath ........................................................ 27

Upholstered furniture .................................................. 27

Carpets and rugs ..................................................... 28

Industrial ............................................................. 28

Medical protection .................................................... 29
iv

CONTENTS–Continued

Page

U.S. market—Continued

Automotive ........................................................ 30

Geotextile ......................................................... 30

Consumption ............................................................. 31

Production ............................................................... 34

U.S. trade ............................................................. 35

U.S. imports ............................................................. 37

U.S. trade measures ........................................................ 40

Tariffs ............................................................... 40

Quotas .............................................................. 40

NAFTA and other preferential trade programs ................................. 43

Trade and Development Act of 2000 ........................................ 45

African Growth and Opportunity Act ........................................ 45

United States-Caribbean Basin Trade Partnership Act ........................... 46

Rules of origin ......................................................... 46

Worsted wool fabrics .................................................... 47

U.S.trade-related Investigations ............................................ 48

U.S. exports ............................................................. 49

Principal markets and export levels ......................................... 49

Foreign trade measures .................................................. 49

Foreign industry profile .......................................... 51

China .................................................................. 54

India ................................................................... 56

European Union ........................................................... 57

Mexico ................................................................. 57

Appendixes

A. Recent restructuring and modernization in the U.S. broadwoven fabric industry ........... A-1

B. Tariff and trade agreement terms .............................................. B-1
v

CONTENTS–Continued

Page

Figures

1. Finished broadwoven fabric production process ................................... 5

2. Broadwoven fabric industry costs as a share of industry shipments, 1998 ................ 7

3. Shuttleless looms: Speed of weaving with five types of looms, 1982, 1989, and 1998 ....... 21

4. Indexes of U.S. shipments of U.S. broadwoven fabrics and apparel, consumer spending

on apparel, and imports of woven apparel, 1994-99 ............................. 25

5. Broadwoven fabrics: Percentage distribution of U.S. imports, by sources, 1994 and 1999 .... 38

6. Broadwoven fabric production costs for selected countries, 1999 ...................... 54

Tables

1. Broadwoven fabrics: U.S. industry profile, 1994-99 ................................ 11

2. Broadwoven fabrics and textile mill products: Industry performance, 1994-99 ............ 13

3. Broadwoven fabrics: Selected industrial market segments, end-use applications,

and estimated market size for North America .................................. 29

4. Broadwoven fabrics: U.S. producers’ shipments, exports of domestic merchandise,

imports for consumption, and apparent consumption, 1994-99 ..................... 31

5. Broadwoven fabrics: U.S. production, imports for consumption, exports of domestic

merchandise, and apparent consumption, by fibers, 1994-99 ...................... 32

6. Broadwoven fabrics: U.S. production, imports for consumption, exports of domestic

merchandise, and apparent consumption, by selected fabrics, 1994-99 ............... 33

7. Broadwoven fabrics: U.S. exports of domestic merchandise, imports for consumption,

and trade balance for selected countries and country groups, 1994-99 ................ 36

8. Broadwoven fabrics: U.S. imports for consumption, by fiber types and principal

countries, 1994-99 ...................................................... 39

9. Broadwoven fabrics: Schedule of integration into the WTO .......................... 42

10. U.S. import quotas and fill rates on selected textile categories, 1999 .................... 44

11. EU and U.S. tariff rates for imports of selected broadwoven fabrics, 2000 ............... 50

12. Installed weaving capacity in 1998 and loom shipments during 1990-99, by selected

regions and countries ................................................... 52

13. Broadwoven fabrics: World exports by principal sources and selected country-group

suppliers, 1994-98 ...................................................... 53

1

ABSTRACT

This report examines trade and industry conditions for broadwoven fabrics, the

materials from which most textile and apparel articles are made, for the period 

1994-99.

# The global broadwoven fabric industry continued to undergo significant

restructuring as a result of keen competition in global markets. Competition has

intensified in recent years, in part because of heavy pricing pressures from Asia

in the aftermath of the 1997-98 Asian financial crisis. Asia is the world’s

largest exporter of broadwoven fabrics. World trade in textiles and apparel will

become less restrictive as World Trade Organization countries eliminate quotas

on such goods by 2005, adding to the competitive pressures facing the global

industry.

# The U.S. broadwoven fabric industry declined according to several measures

during 1994-99, a period of strong U.S. economic growth. Employment fell by

19 percent to 182,000 workers. Industry shipments rose from an average of

$24.5 billion per year during 1994-96 to $25.0 billion in 1997, and then fell to

$23.0 billion in 1999. 

# The U.S. market, valued at $21 billion in 1999, showed little growth during

1994-99. Imports rose from $3.4 billion in 1994 to $3.9 billion in 1997 and

1998, and then fell to $3.6 billion in 1999. Imports supplied 17 percent of the

U.S. market by quantity in 1999 and came primarily from Asia. The U.S.

industry faces shrinking U.S. production of apparel, its major market. The

growth in U.S. apparel imports, which account for about 60 percent of the U.S.

apparel market, limits domestic demand for U.S. fabrics when such imports

substitute foreign cloth for domestic fabrics. Although a significant share of the

apparel imports come from Caribbean countries and Mexico, which use large

quantities of U.S. fabrics, the majority come from other countries, especially

Asian countries, which seldom use U.S. materials.

# In response to difficult market conditions and ongoing trade liberalization, the

U.S. industry restructured and consolidated operations during the 1990s,

reducing its production of basic apparel fabrics and expanding output of higher

value-added fabrics. The industry also invested in new technologies to increase

productivity, operating flexibility, and customer and market responsiveness.

Since the implementation of the North American Free-Trade Agreement

(NAFTA) in 1994, several U.S. fabric producers have invested in operations in

Mexico to make apparel and fabrics for U.S. and Mexican customers. 
2

ABSTRACT—Continued

# U.S. exports of broadwoven fabrics rose at an average annual rate of 7.5

percent during 1994-99 to $2.6 billion, or 13 percent of U.S. shipments of such

fabrics in 1999. Exports to Mexico have quadrupled under NAFTA, rising to

$1.2 billion, or 46 percent of total exports in 1999. New legislation expanding

trade benefits for countries in sub-Saharan Africa and the Caribbean Basin will

likely spur demand for U.S. exports of apparel fabrics.
 

1

 Other fabrics used in significant quantities are knitted and nonwoven fabrics. See K.L.

Gandhi and J.S. Pearson, “Weaving to the Year 2025,” Textiles Magazine (Manchester, United

Kingdom: The Textile Institute International, 2000), issue No. 1-00, p. 6.

 

2

 Broadwoven fabrics are classified in the Harmonized Tariff Schedule of the United States in

chapters 50 (silk), 51 (wool), 52 (cotton), 53 (other vegetable fibers), 54 (manmade filaments), 55

(manmade staple fibers), 58 (pile, chenille, terry toweling, and gauze fabrics), and 70 (glass

fibers). Excluded from this report are narrow woven fabrics (fabrics of a width not exceeding 30

centimeters in their final form) and nonwoven, tufted, knitted, coated, and tire cord fabrics,

which generally are made in separate mills and with different technologies.

3

INTRODUCTION

Woven fabrics are the most common fabrics in the world, reportedly accounting for about 70

to 75 percent of total fabric production by weight in the developed countries and even more

in the developing countries.1 This report covers “broadwoven fabrics,” which are defined for

trade and tariff purposes as woven fabrics made in widths greater than 30 centimeters (i.e.,

greater than approximately 12 inches in width).2 Broadwoven fabrics are the principal fabrics

used in most textile and apparel articles.

This report examines developments in the broadwoven fabric industry during 1994-99. In this

section is a brief overview of the principal types and end uses of broadwoven fabrics, along

with their production processes and factors of production. Next is a discussion of the U.S.

industry structure, performance, and key business strategies. The report then examines the

U.S. market for broadwoven fabrics in terms of consumer characteristics and factors affecting

demand in major market segments, and trends in U.S. consumption and production of

principal fabric types. An analysis of U.S. trade follows, including trends in U.S. imports and

exports and U.S. and foreign trade measures affecting them. The report concludes with an

overview of the foreign industry.

Products and End Uses

Broadwoven fabrics are used extensively in apparel, such as denim, corduroy, and gabardine

in pants; broadcloth and oxford cloth in shirts; and organdy, brocade, and taffeta in formal

dresses. The fabrics are also used in home textiles, such as muslin and percale in bed linens,

terry cloth in towels, and damask in table linens, and in other consumer and industrial goods,

such as tents, luggage, carpet backings, filters, automobile air bags and hoses, and geotextiles

(e.g., soil wall reinforcements). Broadwoven fabrics can be made wholly or in blends of

natural fibers, such as cotton, wool, and silk; artificial fibers, including acetate and rayon; and

synthetic fibers, such as polyester, nylon, and acrylic. The patterns of interlacing include the

three basic weaves (plain, twill, and satin), the more complex weaves (e.g., jacquard, dobby,

and pile), and the many variants of the basic and complex weaves (e.g., crepe, basket, and

herringbone twill).
 

3

 Woven fabrics are made from spun yarn and manmade-filament yarn, the latter of which is

made from filament fibers of indefinite length. Spun yarns are made from staple fibers, which

usually measure 1 inch to 4 inches in length and which include natural fibers (e.g., cotton) and

manmade staple fibers, the latter of which are prepared by cutting manmade-fiber filaments into

staple length. Generally, large broadwoven fabric mills will produce their own spun yarns, but

they will purchase filament yarns from independent producers. 

 

4

 Compared with ring spinning rates, rotor spinning is about 8 times faster and air-jet

spinning about 20 times faster. A trade source estimates U.S. cotton yarn production costs per

kilogram in 1999 were about 18 percent less for rotor spinning than for ring spinning; reduced

waste and lower labor and power usage are major reasons for the cost advantage. See

International Textile Manufacturers Federation, International Production Cost Comparison

1999, Spinning/Texturing/Weaving/Knitting (Zurich, Switzerland), Jan. 2000. 

4

Production Process

The production of broadwoven fabrics can be divided into three broad stages--yarn formation,

fabric weaving, and finishing. Although weaving is the defining step in producing such

fabrics, the process depends critically on the production steps before and after it. Figure 1

illustrates the process in which vertically integrated mills spin cotton or polyester fibers into

yarn, weave yarn into fabric, and dye or otherwise finish these materials at various stages of

production, as discussed below. 

Yarn Spinning3

The yarn spinning process begins with the opening of bales of staple fibers to loosen the fibers

and, especially for cotton, to blend the fibers and remove trash and short fibers. The fibers

undergo “carding” to further clean, align, and form them into thin webs that are then

condensed into a continuous, untwisted rope-like form called “sliver.” Combing is an optional

step to clean and orient the fibers more completely and remove all but the longest fibers,

resulting in a stronger, more compact, and smoother yarn. The sliver undergoes “drawing” to

blend, straighten, and align the fibers, and to impart more uniformity to the sliver. The sliver

is then ready for open-end (rotor) spinning; if destined for ring spinning, the sliver will

undergo “roving,” in which the sliver is drawn into a finer form and given a slight twist. After

the spinning process, the yarn is then wound onto a bobbin; it may also be further processed

(e.g., dyed). The most common methods of spinning are ring spinning and open-end (rotor)

spinning. Ring spinning uses a revolving traveler to insert twist in a yarn, and rotor spinning

uses a rotor to collect and twist individual fibers into a yarn. Ring spinning gives a tighter

twist than the open-end spinning method, but open-end spinning is much faster and usually

lower in cost as it eliminates or combines steps required with ring spinning (e.g., roving).4

However, the open-end method is limited to use in producing certain types and sizes of yarn.

The century-old technology of ring spinning is still common in U.S. mills in its modern form,

largely because it produces a strong, soft yarn with unique surface effects. Rotor and air-jet

spinning, introduced about 30 and 15 years ago, respectively, accounted for more
5

Source: Compiled by the U.S. International Trade Commission.

Figure 1

Finished broadwoven fabric production process
 

5

 Dan J. McCreight et al., Short Staple Yarn Manufacturing, Carolina Academic Press

(Durham, NC: 1997).

 

6

 “Avondale Plans $115 Million Upgrade,” Southern Textile News, June 5, 2000, p. 1, and

Brenda Lloyd, DNR, “Alto Yarns New State-of-the-Art Facility,” June 7, 2000, p. 8, “Denim

Mills Keep Modernizing,” Jan. 28, 2000, p. 13, and “Ring Spinning Is Hot, but Equipment Sales

Are Not,” Mar. 1, 2000, p. 7.

 

7

 Walter N. Rozelle, “Vortex Spinning Gains Strength In U.S. Textiles,” Textile World, Sept.

1999, p. 73.

 

8

 U.S. Census Bureau, Current Industrial Reports (CIR): Broadwoven Fabrics (Gray)

Summary - 1999 (MQ313T(99)-5), June 2000.

6

than one-half of U.S. spun yarn production in terms of poundage by 1996.5 Some mills use

a relatively new “linked ring spinning” process, which improves efficiency, cost effectiveness,

and quality due in part to less handling of the yarn.6 Another relatively new spinning

innovation is vortex spinning, which can spin 100-percent cotton yarns with productivity

levels similar to those of air-jet spinning.

7

Weaving and Yarn Preparation

Weaving is a process in which warp yarns and filling yarns are interlaced at right angles using

looms. Warp yarns run lengthwise on the loom and in the fabric; filling, or weft, yarns run

across the width of the loom and fabric. The preparation of the warp yarns for weaving

involves the accumulation of thousands of yarns wound side-by-side along a warp beam about

the width of the loom in the “warping” process. The warp yarn undergoes “slashing,” in which

a protective coating (“sizing”) is applied to the yarn to help prevent yarn breakage during

weaving. Finally, in the “drawing in” process, the individual warp yarns are threaded through

the loom assembly to the cloth beam, on which the fabric is wound as it is woven. Filling

yarns are wound in packages from which yarn can be drawn off for efficient interlacing during

weaving. 

The means of inserting the filling yarns in the weaving process differ greatly by types of

looms. In shuttle looms, which are still commonly used in many developing countries, the

shuttle holds a bobbin that carries and releases a supply of yarn as the shuttle is slammed back

and forth across the loom to insert the filling yarns in a process called “picking.” In

shuttleless looms, the yarn is inserted by carrying or shooting discrete lengths of yarn across

the loom by means of a projectile, rapier, or high-pressure air or water. Shuttleless looms have

largely supplanted shuttle looms in the U.S. broadwoven fabric industry, accounting for 93

percent of the looms in place in 1999.8 Compared with shuttle looms, shuttleless looms have

much higher levels of productivity and generally produce wider fabrics with fewer defects and

at reduced cost, owing to much faster operating speeds and lower power, space, and labor

requirements per unit area of fabric.
7

 

 1 The “other” category also includes overhead costs and profit.

 

 Source: Estimated by the Commission based on data of the U.S. Census Bureau, Annual Survey of

 Manufactures: Statistics for Industry Groups and Industries (M98(AS)-1, Aug. 20, 2000. 

Finishing

Fabrics come off the loom unfinished, referred to as “in the grey.” They may be finished by

chemical, mechanical, and thermal treatments, which include the necessary removal of the

sizing material applied to the warp yarns before weaving (desizing), as well as dyeing and

printing. Additional finishing may occur to impart specific finished characteristics to the

fabric, such as preshrinking, calendering, mercerizing, and napping.

Factors of Production

Key inputs in broadwoven fabric production include materials and labor. The relative

importance of each has changed over the years, with materials increasing as a share of the

total value of U.S. industry shipments from 56 percent in 1992 to 61 percent in 1998, and the

labor declining from 25 to 21 percent (figure 2). The use of new technology has enabled the

industry to improve productivity (e.g., the value added per production worker hour rose by

32 percent during the period), while employment levels fell. 

U.S. weaving mills purchase raw materials such as fibers and yarns from both domestic and

foreign suppliers, although many of the sources are within North America due to their

proximity and ability to fill orders quickly. Mills often contract with major suppliers to buy

large quantities of fibers or yarns of certain types and quality levels. For example, U.S.

weaving mills that are integrated back to yarn production use large quantities of cotton fiber,

an agricultural product traded on world commodity markets and produced in many countries.

The mills customarily make purchase commitments for cotton fiber several months prior to

anticipated use in production; they often hedge through forward contracts, purchases on the
 

9

 For additional information on cotton, see USITC, Industry & Trade Summary--Cotton,

USITC publication 3391, Feb. 2001. 

 

10 The United States, Canada, and Mexico jointly developed the NAICS to provide a

consistent framework for collecting, analyzing, and disseminating industrial statistics of the three

NAFTA countries. 

8

futures market, options contracts, or combinations of these activities. U.S. mills buy cotton

primarily from U.S. growers under a Federal agricultural program devised to protect the

growers and keep the domestic cotton price competitive to users. Under the program, mills

that purchase U.S.-grown cotton receive payments when the domestic cotton price exceeds the

world price.9 During 1994-99, U.S. mills that spin fibers into yarns benefitted from generally

depressed prices and ample supplies of cotton and polyester, the most widely used fibers in

domestic broadwoven fabrics.

Other key factors of production are energy and water. Mills use large quantities of energy to

run equipment, often around the clock, and in the many processes performed at elevated

temperatures, often with steam. Water is the principal carrier fluid for chemicals used in

applying size to yarns before weaving and in fabric finishing. To improve operating

efficiencies, mills use production equipment that minimize energy and water usage, perform

dyeing or other finishing operations by continuous rather than batch processing to help avoid

unnecessary cooling and reheating and, use dye solutions and other chemical formulations

with reduced water or steam requirements. Mills also employ equipment that reduce water to

be evaporated in drying fabrics by first removing much of the liquid with squeeze rolls or

extractors, and reclaim and recycle water and steam from production processes.

U. S. INDUSTRY PROFILE

Industry Structure

The North American Industry Classification System (NAICS), which replaced the U.S.-based

Standard Industrial Classification (SIC) system beginning with 1997 data, classifies

broadwoven fabric mills by their primary activity--weaving or finishing.10 Mills primarily

weaving fabrics are in Industry 313210 (Broadwoven Fabric Mills) and those primarily

finishing fabrics are in Industry 313311 (Broadwoven Fabric Finishing Mills). The weaving

mill group also includes mills that spin their own yarn and/or finish their own fabric and some

mills that additionally produce end-use goods such as towels, sheets, and pillowcases. The

finishing mill group also includes “converters” that buy domestic or imported grey fabrics,

have them finished on contract, and sell the fabrics at wholesale. 

The U.S. broadwoven fabric industry (NAICS 313210 and 313311) consists of relatively few

large firms, most of which count weaving as their primary activity, and many small ones. In

general, the small firms either weave or finish fabrics, although some may spin their own yarn

or finish their own fabric. Most firms primarily engaged in finishing are small, particularly

the converters, and accounted for about 45 percent of the total number of finishing mills in

1997. Weaving mills tend to operate on a larger scale than finishing mills, partly reflecting the
 

11 For example, Milliken & Company, believed to be the largest U.S. textile firm, produces

apparel fabrics, table linens, laundry products such as mops and shop towels, carpet, and

chemicals in more than 60 plants worldwide. Information is from Milliken’s hompage at

http://www.milliken.com, retrieved Feb. 7, 2000. 

 

12 Company information from 10-K Forms filed with the U.S. Securities and Exchange

Commission (SEC) by Burlington Industries, Inc., Dec. 18, 1998; Dan River Inc., Mar. 15, 2000;

Galey & Lord, Inc., Dec. 30, 1999; Cone Mills Corp., Mar. 29, 2000; Culp, Inc., July 30, 1999;

and Avondale Inc., Nov. 12, 1998. The 10-K Forms are available from the SEC Web site at

<www.sec.gov/Archives/edgar/data>.

9

larger production volume in weaving and the greater number of operations in vertically

integrated weaving mills than in most finishing mills. Based on U.S. Census Bureau data in

the County Business Patterns for 1998, weaving mills on average employ 141 workers per

establishment, compared with 36 in each finishing mill. 

The large U.S. weaving firms generally produce a wide range of products, use multiple plants,

and are vertically integrated from yarn spinning through fabric weaving and finishing, and,

in some cases, even production of end-use goods.11 This description generally fits the firms

whose recent business strategies are summarized in tabular form in appendix A. The large

firms typically finish their own fabrics, though they may contract finishing operations to

independent mills, for example, during particularly busy manufacturing periods or for

specialized applications. Some large firms also finish fabrics on contract for other companies

as a regular activity or during lulls in their own operations. Firms integrated forward into

fabrication of end-use products traditionally have made towels, bed sheets, or other home

textiles whose manufacture requires only a few, highly automated steps after fabric finishing.

Since the implementation of NAFTA in 1994, some U.S. fabric firms have integrated forward

into the production of apparel and industrial products in Mexico. 

The domestic industry is characterized by product specialization. Weaving and finishing mills

each tend to specialize in either cotton, wool, or manmade-fiber fabrics, in part because of

differences in the properties of the fibers and yarns themselves and, in turn, in needed

equipment and manufacturing processes. Thus, no firm dominates the overall U.S.

broadwoven fabric market, although a few firms have leading positions in selected market

segments, such as Burlington Industries in worsted wool fabrics for apparel, Dan River in

fabrics for men’s dress shirts, Galey & Lord in corduroy fabrics, Avondale in fabrics for

uniforms and other work apparel, and Cone Mills and Galey & Lord in denim fabrics.12

U.S. broadwoven fabric firms market their output through several channels of distribution.

In general, weaving mills sell grey fabrics to independent finishing mills and converters. Both

weaving mills and converters sell finished fabrics to producers of end-use products, such as

apparel, home textiles, and industrial goods, mainly through their own sales forces or

independent commissioned sales agents. Weaving mills also sell finished fabrics to distributors

and converters. A major market for some U.S. fabric mills is the U.S. Armed
 

13 Estimate by the Commission based on data from the Defense Logistics Agency,

Philadelphia, PA, and Hardy B. Poole, American Textile Manufacturers Institute, Washington,

DC, interview by USITC staff, July 14, 2000. The “Berry Amendment,” enacted as Title IX of

Public Law 102-396, as amended, requires U.S. military procurement of uniforms and other

textile articles, with some exceptions, to be domestic goods. In addition, U.S. Government

purchases of textiles or other products generally are to favor U.S. goods, as provided under the

Buy American Act of 1933, as amended by Title VIII of Public Law 100-418 in 1988 and Title

IV of Public Law 103-335 in 1994. 

 

14 American Textile Manufacturers Institute (ATMI), Washington, DC, Textile HiLights, Dec.

1998, p. iv.

 

15 Estimated by the Commission based on official statistics of the U.S. Department of

Commerce.

10

Forces, which is estimated to have purchased about $450 million worth of uniforms,

parachutes, and other textile articles made of broadwoven fabrics in 1999.13

Recent Trends

The domestic industry posted little or no growth in shipments during 1994-99, a period of

strong U.S. economic growth. As shown in table 1, industry shipments rose from an annual

average of $24.5 billion during 1994-96 to a high of $25.0 billion in 1997, and then declined

thereafter, to $23.0 billion in 1999. Preliminary data show that the decline continued into

2000. Industry employment fell by 19 percent during 1994-99 to 182,000 workers; it had

totaled as much as 247,000 workers in 1989 and 354,000 in 1979. 19 percent during 1994-99

to 182,000 workers; it had totaled as much as 247,000 workers in 1989 and 354,000 in 1979.

The relative decline of the domestic industry against a backdrop of strong economic growth

during 1994-99 reflected an increasingly competitive domestic market, exacerbated in recent

years by heavy pricing pressures from Asian exporters of fabrics and end-use goods,

especially apparel. According to U.S. industry sources, Asian countries expanded their

exports to the U.S. market in the aftermath of the Asian financial crisis of 1997 and 1998 in

an effort to earn much-needed foreign exchange, aided in large part by the accompanying

significant currency devaluations that effectively reduced dollar prices of their goods in the

U.S. market.14

U.S. imports of broadwoven fabrics rose 6 percent by value during 1994-99, and they

expanded their share of the U.S. broadwoven fabric market from 16 percent in 1994 to about

17 percent in 1999 (see “U.S. consumption” for more information on market conditions). The

direct competition from fabric imports was outweighed, however, by indirect competition from

the larger, more rapidly rising importation of end-use products, especially apparel. The U.S.

broadwoven fabric industry’s major customer, the apparel industry, has lost an even greater

market share to imports. U.S. apparel imports now account for an estimated 60 percent of the

domestic apparel market, up from 45 percent in 199415. The U.S. broadwoven fabric industry

faces a shrinking U.S. apparel manufacturing base as apparel imports continue to increase,

thereby limiting domestic demand for U.S. fabrics. Imported apparel often uses foreign

fabrics, thereby indirectly competing with U.S.-produced fabrics. Weak domestic demand for

U.S. apparel fabrics was offset, to some extent, by the growth in U.S. exports of apparel

fabrics to the Caribbean countries and Mexico.
11

Table 1

Broadwoven fabrics: U.S. industry profile, 1994-991

Item 1994 1995 1996 1997 1998 1999

Establishments:

Weaving mills (number) ............... 899 917 969 930 924 (

2

)

Finishing mills (number) ............... 519 564 681 738 780 (

2

)

 Total (number) ................... 1,418 1,481 1,650 1,668 1,704 (

2

)

Employees:

Weaving mills (1,000) ................ 167.0 163.9 155.4 151.0 146.6 134.5

Finishing mills (1,000) ................ 58.3 58.1 54.6 52.8 50.5 47.4

Total (1,000) ..................... 225.3 222.0 210.0 203.8 197.1 181.9

Industry shipments:

Weaving mills (million dollars) .......... 17,638.0 18,389.3 18,204.4 18,241.1 18,155.2 17,011.4

Finishing mills (million dollars) ......... 6,615.8 6,336.8 6,309.0 6,756.6 6,426.9 6,026.7

Total (million dollars) ............... 24,253.8 24,726.1 24,513.4 24,997.7 24,582.1 23,038.1

Value added by manufacture:

Weaving mills (million dollars) ............ 7,577.0 7,564.0 7,449.9 7,492.2 7,759.7 (

2

)

Finishing mills (million dollars) ........... 2,657.0 2,738.5 2,748.4 4,076.7 3,899.3 (

2

)

Total (million dollars) ............... 10,234.0 10,302.5 10,198.3 11,568.9 11,659.0 (

2

)

New capital expenditures:

Weaving mills (million dollars) ............ 845.2 1,039.3 765.6 894.5 855.1 (

2

)

Finishing mills (million dollars) ........... 205.9 247.3 187.4 311.1 292.3 (

2

)

Total (million dollars) ............... 1,051.1 1,286.6 953.0 1,205.6 1,147.4 (

2

)

Production workers' average hourly earnings:

Weaving mills (dollars) ................. 9.73 10.03 10.25 10.64 10.99 11.25

Finishing mills (dollars) ................. 9.49 9.64 10.06 10.47 10.82 10.94

All manufacturing (dollars) .......... 12.07 12.37 12.77 13.17 13.49 13.91

1

 U.S. Census Bureau industry data used in this table beginning with 1997 are in terms of the NAICS and,

thus, are not always comparable to pre-1997 data, which are based on the old SIC code. Chief among the

differences between the two codes is the classification of converters (establishments that buy grey fabrics, have

them finished on contract, and sell the fabrics at wholesale), which are classified in the NAICS as a fabric finishing

mill (Industry 313311), but which were classified in the SIC as part of the Wholesale Trade: Piece Goods, Notions,

and Dry Goods industry (SIC code 5131). 

2

 Not available.

Source: Data compiled from official statistics as follows: Establishments data from U.S. Census Bureau, County

Business Patterns, 1998 and selected back issues; employment and earnings data from U.S. Bureau of Labor

Statistics, National Employment, Hours, and Earnings; and value of shipments, value added, and capital

expenditures data from U.S. Census Bureau, Annual Survey of Manufactures, M98(AS)-1 and selected back issues,

and 1997 Economic Census - Manufacturing Industry Series: Broadwoven Fabric Mills and Broadwoven Fabric

Finishing Mills. Data for the number of establishments for finishing mills in 1998 and U.S. shipments data for 1999

were estimated by the Commission, based on the sources listed above.
 

16 Richard W. Mason, “Training Backs Burlington’s Maintenance,” Textile World, Feb. 1999,

p. 53.

 

17 S. Gray Maycumber, “New ATMI Chief Sees Brighter 2000 for Textiles,” DNR, Feb. 23,

2000, p. 12, and John W. McCurry, “Textile Firms Face Tight Labor Pool,” Textile World, June

1998, p. 22.

 

18 Information in paragraph is from Christopher H. Delporte, “Textiles On The Edge of 2000,"

America’s Textiles International, May 1999, p. 104; Stella M. Hopkins, “Textile Industry

(continued...)

12

Foreign competition in the U.S. market for fabrics, coupled with growing imports of apparel,

has limited the ability of U.S. mills to pass higher costs on to customers. The ongoing

phaseout of textile and apparel quotas likely will further strengthen the competitive position

of the many textile-exporting countries that have the ability and willingness to establish a

significant presence in the U.S. market for broadwoven fabrics and for apparel, further

shrinking the market for U.S.-made apparel fabrics (see “U.S. trade measures” for further

information on the quota phaseout).

Nevertheless, U.S. mills are among the most productive in the world in weaving high-volume

commodity fabrics, because much of their investments over time have been in high-speed,

automated technology. To respond more quickly to customer requirements and changing

market conditions, mills have invested in new production, information, and service

technologies in an effort to improve productivity, customer service, and their ability to

produce unique products in a diverse range and in smaller lot sizes than in the past. During

1994-98, industry capital expenditures on new plants and equipment averaged about $1.1

billion a year (see table 1); they averaged 4.9 percent of annual shipments for the weavers and

3.8 percent for the finishers. 

As the U.S. industry increased its use of new technologies, required skill levels rose for many

jobs in the mills, such as in maintenance of the increasingly complex machinery.16 Industry

observers noted that, in the tight U.S. labor market of recent years, textile mills experienced

difficulty finding qualified workers.17 This difficulty could be a result of lower wage rates in

the textile industry than for many other manufacturing industries, largely because of intense

competition in textile markets. According to data of the U.S. Bureau of Labor Statistics, in

1999, average hourly earnings were $11.25 in weaving and $10.94 in finishing, compared

with $13.91 for all manufacturing.

Despite the continued modernization of the domestic industry, its profit performance

fluctuated during 1994-99. As shown in table 2, industry profitability generally trended down,

particularly for the weaving mills, whose capacity utilization and return on assets declined,

in some cases by more than those for textile mill products overall. Although post-1998

capacity utilization data for the industry are not available, industry analysts indicate that the

difficult conditions have continued. The analysts attributed the industry difficulties to such

factors as excess capacity for some fabrics, especially denim and basic commodity fabrics,

and pricing pressures, leading to reduced profit margins. The analysts also noted that the

Asian financial crisis and import growth accentuated these problems. During 1994-99, firms

closed plants, shed unprofitable product lines, consolidated operations, reduced U.S. capacity,

or shifted production to lower wage countries. Some relatively large firms filed for

bankruptcy, and some publicly owned firms experienced significant drops in their stock prices

or downgrading of their credit ratings, potentially hindering their ability to obtain new

capital.18
 

18 (...continued)

Hampered by Weak Apparel Sector,” Nov. 14, 1999, found at Internet address

NewscastEmailAlert@emailalert.newscast.com, retrieved Nov. 16, 1999; Peter Krouse,

“Burlington Debt Drops into Junk Bond Category, Textile Industry Troubles Have Turned

Investment Grade Bonds Into Riskier Investments,” Jan. 15, 2000, found at

NewscastEmailAlert@emailalert. newscast.com, retrieved Jan. 18, 2000; Brenda Lloyd, “Textile,

Apparel Stocks Hurt by Industry Woes,” DNR, Dec. 13, 1999, p. 6; Kay Norwood, “Outlook

2000: Better,” Southern Textile News, Jan. 31, 2000, p. 1; and Craig Sirois, “Textile Industry,”

The Value Line Investment Survey, Nov. 19, 1999, p. 1628. 

13

Table 2

Broadwoven fabrics and textile mill products: Industry performance, 1994-99

Percent

Item 1994 1995 1996 1997 1998 1999

Return on sales:1

Weaving mills ......................... 3.6 3.5 1.8 1.9 2.8 2.4

Finishing mills ......................... 3.8 3.1 3.0 3.4 4.0 4.3

Textile mill products .................... 3.7 3.5 2.6 2.9 3.4 2.5

Return on assets:1

Weaving mills ......................... 12.5 9.5 4.6 6.7 6.6 5.5

Finishing mills ......................... 11.8 9.3 9.5 11.0 7.7 14.7

Textile mill products .................... 9.7 10.7 7.1 8.3 8.8 5.7

Sales-to-inventory ratio:1

Weaving mills ......................... 15.7 9.8 9.9 14.3 9.2 10.1

Finishing mills ......................... 14.8 13.7 15.2 15.5 9.7 18.8

Textile mill products .................... 10.6 12.0 11.0 11.5 10.3 9.1

Full-production capacity utilization rate:2

Weaving mills ......................... 92 88 86 89 81 (

3

)

Finishing mills ......................... 89 82 83 82 66 (

3

)

Textile mill products .................... 87 82 81 81 74 (

3

)

1

 Calculated by the Commission based on the ratios for the weaving and finishing mills using summations,

across relevant SIC categories, of the Dun & Bradstreet figures for inventory, total assets, net sales, and net profit

after tax; ratios for textile mill products are as listed by Dun & Bradstreet.

2

 Calculated by the Commission based on the rates for weaving and finishing for 1994-97 by weighting the

official reported rates of relevant SIC categories according to their respective shares of the total value added in

weaving or in finishing; rates for 1998 were estimated by using the value-added percentages for 1997. Rates for

textile mill products are as reported by the U.S. Census Bureau.

 

3 Not available.

Source: Capacity utilization rates were compiled from official statistics of the U.S. Census Bureau, CIR: Survey of

Plant Capacity - 1998 [MQ-C1(98)]. All other data were compiled from statistics of Dun & Bradstreet Information

Services, Industry Norms & Key Business Ratios, Desk-Top Edition 1998-99 and selected back issues, Dun &

Bradstreet (New York, NY).
14

Business Strategies

The difficult conditions faced by the domestic industry in recent years and the prospect of

increased import competition in the future have spurred firms to implement strategies designed

to enhance their competitiveness and profitability. A key factor behind these business

strategies has been the industry’s shrinking domestic customer base, particularly in apparel

manufacturing. Mills have reduced or eliminated production of apparel fabrics, especially

low-profit-margin commodity fabrics made in large quantities here and abroad. Mills have

also expanded production of fabrics that are less sensitive to import competition, such as those

for home textile and industrial products. To the extent that firms are maintaining domestic

production of apparel fabrics, they are seeking to increase the value-added of the fabrics,

while moving production of less value-added fabrics offshore. In particular, U.S. fabric firms

have invested in production in Mexico since the implementation of NAFTA in 1994 in an

effort to benefit from NAFTA trade preferences, along with lower operating costs and closer

proximity to their customers. Some domestic mills that are moving their domestic production

into higher value-added products have curtailed the sale of grey fabrics and are focusing on

marketing finished fabrics. The following discussion on business strategies draws on

information summarized in tabular form in appendix A and obtained from company annual

reports and submissions to the U.S. Securities and Exchange Commission (e.g., Form 10-K

reports).

Restructuring

A number of broadwoven fabric firms have restructured their operations to become more

vertically integrated, while others have sought to increase market share in a particular product

segment or to diversify into more products and markets. Vertical integration enables mills to

secure more control over their yarn supply and quality, improve capacity utilization, reduce

costs, and enhance efficiency, product quality, design innovation, and customer delivery. It

also enables mills to incorporate yarn design into their fabric design process. Downstream

integration has allowed firms to benefit from greater profitability of higher value-added goods,

whether finished fabrics or end-use products such as apparel. For example, Galey & Lord

entered into apparel production through the acquisition of a Mexican apparel producer in 1996

in an effort to offer customers a complete package of fabrics and garments from one source.

Firms have also pursued mergers and acquisitions to increase production capacity and market

share, diversify product lines, and enter new markets and channels of distribution. For

example, Avondale’s acquisition of the Graniteville Co. in 1996 enabled it to enter the market

for utility wear fabrics used in work clothing. Industry analysts noted that increased company

size as a result of mergers or acquisitions may enable firms to provide the volume and variety

sought by their fabric customers, and to reduce unit costs by eliminating duplicate operations,

improving productivity, and achieving economies of scale.

U.S. fabric firms have divested less profitable or noncore operations to increase their focus

on specific product offerings. For example, Springs Industries sold several fabric business

segments during 1996-99 to focus more on home furnishing products, and Thomaston Mills

ceased production of denim fabric and industrial yarns in 1999 to focus on operations with
 

19 Based on 10-K Form filed with the SEC by Cone Mills Corp. on Apr. 1, 1999. The 10-K

Forms are available from the SEC Web site at <www.sec.gov/Archives/edgar/data>.

 

20 Milliken & Company homepage (http://www.milliken.com), retrieved Feb. 7, 2000.

 

21 Based on 10-K Form filed with the SEC by Burlington Industries on Dec. 18, 1998, and

“Burlington PerformanceWear and Galey & Lord to Utilize New Nano-Tex Fabric Technology,”

press release, Dec. 5, 2000, found at http://www.burlington.com/news/, retrieved Dec. 14, 2000. 

 

22 William C. Smith et al., “Industrials: Opportunities to Consider,” Textile World, Feb. 1998,

p. 28.

 

23 Based on 10-K Form filed with the SEC by Quaker Fabric Corp. on Apr. 2, 1999.

 

24 K.G. Melling, “Valdese Weavers Designs for the 21st Century,” Textile World, Feb. 2000, 

p. 45.

15

the most profitability and growth potential. Firms have also streamlined management and

operations to reduce costs, and improve efficiency and customer service. In 1999, Cone Mills

announced a comprehensive downsizing and reorganization plan to achieve savings in its

apparel fabric and commission finishing segments. Along with closing some facilities, Cone

Mills downsized its administrative and manufacturing staffs to better match its sales base and

respond to customer cycle times; merged its denim and sportswear fabric operations to better

serve the growing casual wear market; and downsized its screen-printing operations to reduce

costs and improve efficiency.19

Product-focused Strategies

Although the domestic industry has a history of developing and refining manufacturing

processes and products, such as introducing more effective dyeing methods and new fabric

styles, it has had limited involvement in basic research that engenders breakthroughs or

fundamentally new products and processes. For most innovations, mills have relied on

research and development (R&D) of producers of manmade fibers, dyes and chemical finishes,

machinery, computers, and software. However, several fabric firms have significant R&D

programs. Milliken & Company, believed to be the largest U.S. textile producer, reportedly

has the world’s largest textile research center and has generated more than 1,300 patents.20

Burlington Industries, with an R&D program averaging about $13 million annually, recently

acquired majority ownership of a research firm (Nano-Tex) that uses molecular engineering

to develop fabrics with new textile properties, such as fabrics that do not wrinkle or absorb

water.21

A number of firms focus on making specialty fabrics for high-performance industrial

applications, such as puncture-proof materials. Such firms engineer products, often new,

unique and proprietary, to customer specifications.22 Recognizing that constituent fabrics can

contribute significantly to an end product’s consumer appeal, producers of apparel and home

textile fabrics are offering innovative fabrics that reflect fashion trends, are diverse, and

frequently change. For example, Quaker Fabric has expanded its line of upholstery fabrics to

more than 3,000 styles, with about 700 introduced each year.23 Valdese Weavers, a supplier

of fabrics for upholstery and other applications, reportedly has 80,000 fabric patterns ready

for use and annually adds about 7,500 patterns.24 Denim producers market their fabrics at

multiple price points and differentiate them by fiber content, fabric weight, color, stretch
 

25 Raye Rudie, “The Many Faces of Denim,” Bobbin, Apr. 1999, p. 40.

 

26 ATMI, “FASLINC FACTS,” found at Internet address

http://www.atmi.org/Programs/faslincfacts.htm, retrieved June 21, 2000. The Voluntary

Interindustry Commerce Standards Association (VICS) has established standards for simplifying

product and information flows between retailers and their suppliers (see its homepage at Internet

address http://www.vics.org).

16

properties, and finishes for visual and tactile effects and functional features.25 Some

broadwoven fabric producers have also begun to manufacture end-use goods, such as apparel

and home textiles. Although several large firms have produced home textiles for many years,

a number of firms during the 1990s either augmented their capacity and product selection in

home textiles or newly entered the field, often as an extension of their fabric production. Also,

some fabric producers have entered into apparel production offshore, particularly in Mexico,

in wholly owned operations or through joint ventures with apparel producers in the host

country. As suppliers of apparel or other end-use products, fabric producers offer customers

simplified sourcing, lower costs, and faster time to market through “one-stop-shopping” with

the purchase of the fabric and final product from one supplier. In general, these producers use

their fabrics to make apparel to customer specifications and bearing customer brand names.

Strategic Alliances

Producers have expanded their efforts to forge strategic alliances with major suppliers and

customers, facilitated by the development of information technology to support

communication linkages between firms. Communications and information exchange are key

elements of these collaborative working relationships. Computerized technology enables

producers to communicate with suppliers and customers through electronic data interchange

(EDI); linkages through company Internet homepages, where customers can check order status

or shipping and invoice information; and use of bar codes to track materials from procurement

through production and delivery, combined with electronic records about products and their

status. Producers are also increasing their use of online procurement, marketing, and selling.

To facilitate electronic business between producers and their suppliers, the textile industrysponsored Fabric and Suppliers Linkage Council (FASLINC) has developed voluntary

standards and guidelines for EDI, bar coding, and product identification.26

A number of producers have implemented computer-supported “just-in-time” (JIT)

manufacturing and quick response (QR) programs to manage production, inventory, and

distribution. JIT focuses on relationships with suppliers and QR with customers. Both

programs help to improve service, shorten lead times between order and delivery, and lower

inventory costs, including reducing floor space for inventory. Under a typical JIT program,

inputs from suppliers arrive at the mill ready to enter production with little or no inspection,

testing, or time in inventory. Mills often implement supplier certification programs, under

which JIT suppliers agree to adhere to strict requirements as to quality, delivery, and price.

QR programs use technology and collaboration among firms in the supply chain from textile

producers through retailers to reduce inefficiencies and lead times between order and delivery

of products for consumer markets. According to a 1997 study, QR had resulted in significant

consumer savings due to lower prices and improved service in terms of product availability

and selection. Other cited sources of the consumer savings were industry consolidation,
 

27 Kurt Salmon Associates, “Quick Response: A $13 Billion Success Story,” Bobbin, June

1997, p. 46.

 

28 Peter J. Metz, “Demystifying Supply Chain Management,” Winter 1998, found at Internet

address http://www.manufacturing.net/magaz...gistic/archives/1998/scmr/myst.htm, retrieved

June 15, 2000.

 

29 Based on 10-K Forms filed with the SEC by Culp, Inc. on July 30, 1999; Quaker Fabric

Corp., Apr. 2, 1999; and Cone Mills Corp., Mar. 29, 2000. 

 

30 Based on 10-K or 10-Q Forms filed with the SEC by Galey & Lord, Inc. on Dec. 30, 1999;

Burlington Industries, Dec.18, 1998; Cone Mills Corp., Apr. 1 and May 18, 1999; Dan River

Inc., Mar. 29, 1999; and Tarrant Apparel Group, Mar. 1, 1999; the homepage of Consoltex

Group Inc. (http://www. consoltex.com); and “News Release - AIP/CGI NB Acquisition Corp.

(Canada) American Industrial Partners (U.S.),” Canadian News Wire, found at

http://www.newswire.ca/releases/October1999/18/ c4727.html, retrieved July 20, 2000. 

17

productivity improvement, growth in imports, and mass merchant retailing. A major finding

was that suppliers of end-use product manufacturers (e.g., fabric producers) had contributed

to the QR-related consumer savings primarily through cost and lead time reductions and

product line rationalization relative to the market; firms implementing QR benefitted mainly

through increased sales and market share rather than reduced inventory levels.27 The sales-toinventory ratio of the broadwoven fabric industry fluctuated in recent years but was notably

lower in 1998 than in 1994 (see table 2). The low 1998 level indicates an increase in

inventories relative to sales in 1998, possibly reflecting industry difficulty in moving inventory

in the midst of the Asian financial crisis.

Many firms have recently incorporated JIT and QR programs into a more comprehensive

integrated supply chain management program, which involves coordination and information

sharing among fabric producers and other firms in the supply chain.28 Supply chain

management is being facilitated by a large outgrowth of e-business providers that specialize

in online business-to-business communications tools for the textile and apparel sector. 

Global Strategies

Producers are responding to the progressive dismantling of trade barriers in major world

markets under the WTO and NAFTA by seeking manufacturing, marketing, and sourcing

opportunities in global markets. Some firms have made globalization a key business strategy.

For example, exports accounted for 37 percent of Cone Mills’ denim fabric sales in 1999;

foreign sales represented 23 percent of Culp’s net sales in 1999 and 18 percent of Quaker

Fabric’s gross sales in 1998.29 Many globally oriented firms market their products at

international trade shows and through sales representatives and distributors stationed abroad,

in addition to those in the United States. Other strategies involve the operation of distribution

centers near customers in other countries and the dedication of resources to ensure equal

attention to product development, quality, and service for foreign and domestic customers.

U.S. fabric producers have also invested in operations in other countries, most recently in

Mexico, to be closer to their apparel manufacturing customers. A few of these producers have

also begun to make apparel in Mexico, including Burlington Industries, Dan River, and Galey

& Lord. In addition, in 1999, apparel manufacturer Tarrant Apparel Group announced its

entry into fabric production through an agreement to acquire a denim mill in Mexico.30 The
 

31 Based on 10-K Form filed with the SEC by Cone Mills on Mar. 29, 2000.

 

32 The ISO, established in 1947, is a nongovernmental federation of national standards bodies

from currently about 130 countries that work together to establish international standards, with a

principal purpose the facilitation of international exchanges of goods and services. See ISO

homepage (http://www.iso.ch).

 

33 Information on labeling rule change is from Federal Trade Commission, Threading Your

Way Through the Labeling Requirements Under the Textile and Wool Acts, Dec. 1998, found at

Internet address http://www.ftc.gov, retrieved Mar. 31, 2000, and “New Generic Fiber Names

Added by ISO,” DNR, Sept. 13, 1999, p. 24.

18

types of fabrics that U.S. firms are producing offshore are believed to be largely commodity

fabrics that would sell at lower price points than those they manufacture domestically, or

fabrics that they no longer produce domestically. Cone Mills, for example, produces basic

denim for the mass market at its facility in Mexico, while its U.S. operations focus on

producing fabrics for specialty retailers and department stores.31 U.S. producers have also

invested in other parts of the world to serve those regional markets. For example, Galey &

Lord also has fabric operations in Canada, Italy, and Mexico. The firm’s joint venture in

Tunisia is a leading producer of fabrics for work and career apparel for the European market,

and its European operation is a major producer of denim fabric for sale in Europe, North

Africa, and Asia. Burlington Industries has a joint venture with a denim producer in India and

produces fabrics for apparel and home textiles in Mexico. A U.S. investment firm recently

acquired Consoltex Group, a Canadian producer of woven apparel, home textiles, and

industrial fabrics with plants in Canada, Mexico, Costa Rica, and the United States. 

A growing number of U.S. broadwoven fabric firms have ISO-9000 certification, which

signifies that, according to standards of the International Organization for Standardization

(ISO), management processes are in place and ongoing to ensure conformance of products

with customer requirements.32 Many firms believe the certification (which can apply to any

manufacturing industry) can lead to improved quality management and competitiveness in

global markets. In addition to ISO-9000, the ISO standards for textile products, production

equipment, and labeling are gaining increased importance. Recently, the U.S. Federal Trade

Commission amended its textile product labeling rules on names of fibers used in constituent

fabrics, agreeing also to allow the use of alternative names of manmade fibers recognized by

the ISO (e.g., viscose and elastane for rayon and spandex, respectively). The change is

expected to help firms avoid the expense of different labels for the U.S. and foreign markets.33
 

34 U.S. Census Bureau, CIR: Broadwoven Fabrics (Gray) Summary - 1999 (MQ313T(99)-5),

issued June 2000, and selected back issues.

19

Technology and Productivity

U.S. broadwoven fabric mills have

invested in new technology for each

stage of production, from yarn

manufacturing to fabric weaving

and finishing, and increasingly for

end-use product fabrication. These

investments have enabled further

gains in productivity, greater

flexibility and responsiveness to

diverse and changing customer

needs, and shorter time from order

to delivery. During the 1990s, U.S.

mills invested in the latest

generations of shuttleless looms and

other new technologies, sometimes

replacing equipment less than 10

years old (for example, see text box

titled, “Modernization in the Denim

Industry”). The investments have

helped mills to reduce costs, expand

capacity, enhance product quality,

and meet standards for protecting

workers, the public, and the

environment. Mills have also

invested in communications

technologies to provide effective

networking with both customers and

suppliers, and logistics systems to

control and monitor inventories and

distribution. 

The adoption of new manufacturing technologies enabled U.S. broadwoven fabric firms to

more than double their fabric output per loom-hour during 1989-99, from 16 square meters

to 35 square meters. The increase was in addition to the significant gains achieved during

1977-88, when U.S. mills removed about one-half (or nearly 150,000) of their looms from

production, while doubling their fabric output per loom hour.34 Technological change has been

a force behind the increased productivity and other developments, such as reduced labor input

and heightened entry barriers in the industry due in part to the requisite expense and expertise

to become and stay competitive.

Adoption of new technology in one process has often led to development of complementary

technology in another. For example, efficient operation of shuttleless looms requires stronger,

smoother, more even yarns than do shuttle looms, necessitating technology capable of

Modernization in the Denim Industry

The types of investments of the domestic industry

during the 1990s can be seen from a review of the

extensive modernization undertaken by major denim

producers, as they prepared for present and future

global competition during a period of overcapacity.

New air-jet looms predominated in recent weavingmachine installations, often at the expense of

projectile looms, because the air-jet looms are

believed to provide the best mix of fabric quality, cost

efficiency, and styling versatility by enabling the

production of a wide range of fabric weights and

styles and rapid loom changes from one style to

another. The new looms were part of factory

overhauls that also encompassed updating

equipment for yarn production and preparation, and

fabric finishing. Cone Mills had capital expenditures of

about $180 million during 1994-99, of which $30

million was for top-to-bottom modernization of an

integrated denim mill with computer-monitored

process controls. Cone also augmented jacquard

fabric-weaving capacity and installed computerized

color-mixing systems and new fabric-preparation

machinery in printing plants to ensure product quality

and customer service. Avondale invested more than

$200 million during 1994-99, among other things, to

outfit several areas with new-generation,

technologically advanced machinery, build a new

integrated denim weaving plant, and install new

systems for reclaiming waste fibers and recovering

chemicals used in processing. 

Source: Brenda Lloyd, “Denim Mills Keep Modernizing,” DNR,

Jan. 28, 2000, p. 13, and 10-K Forms filed with the SEC by

Cone Mills, Mar. 29, 2000, and Avondale, Nov. 12, 1999.
 

35 Warren S. Perkins, “New Slashing Technology Offers Big Benefits,” Textile Chemist and

Colorist, May 1999, p. 13.

 

36 Andreas Sherrer, “Benninger: Savesize Pre-Wet Warp Sizing,” Textile World, Apr. 2000, 

p. 42.

 

37 About 55 percent of the shuttleless looms, including the air-jet, water-jet, projectile and

rapier types, have single-insertion capability, meaning that only one filling yarn is interlaced

with the warp yarns at any one time during weaving. Most others, except for certain pileweaving looms, have multiple-filling insertion capability, meaning that 8, 10, or more filling

yarns can be interlaced with the warp yarns in different weave patterns at any one time. U.S.

Census Bureau, CIR: Broadwoven Fabrics (Gray) Summary - 1999, June 2000. Multipleinsertion looms weave much faster than single-insertion looms. 

20

producing such yarns. The larger fabric widths possible with shuttleless looms held limited

advantage until finishing equipment was engineered to handle the wider fabrics. Also, the use

of highly efficient technology in one area can lead to bottlenecks in another, where goods sit

idle for extended periods while in the production sequence, if preceding or succeeding

processes do not keep up with the more productive area.

Yarn Preparation and Weaving

Technological advances in yarn preparation for weaving include such improvements as

automatic, in-process detection of yarn defects and repair of broken yarns, production of

larger yarn packages, and automated removal of yarn packages from machinery. Pre-wet

sizing, recently introduced in some mills reduces the amount of sizing agent needed to be

applied in slashing and, in turn, the amount to be removed after weaving.35 Sizing is estimated

to account for 50 to 70 percent of the textile effluent load.36

The speed of weaving on shuttleless looms has accelerated since 1982, particularly for airand water-jet looms (figure 3). Investments in new loom technology have enabled mills to

increase their productivity, as well as flexibility in the types of fabric produced. Projectile and

rapier looms are the most versatile in terms of the types of fabric woven, and projectile looms

produce the widest fabrics. Partly because of their speed, the air-jet looms account for more

than 50 percent of the single-filling-insertion shuttleless looms in place in the United States.37

Dyeing and Finishing

The ongoing technological changes in dyeing and finishing have focused on improving quality,

speed, and flexibility of these processes, and developing equipment to handle different types

of fabric. Other major concerns include conservation of energy, water, and other processing

materials, and replacement of toxic chemicals with others that are of equivalent efficacy but

less hazardous. Dyeing and finishing have become highly computerized to permit control of

temperature, chemical concentrations, and other processing variables and in-process

monitoring of fabric quality. Digital printing, a process of creating prints generated and

designed by computer, is used currently for small-scale textile applications but appears to be

nearing feasibility for large-scale fabric printing.
 

38 Information in paragraph is from Textile World articles by Fred L. Cook, “AATCC Colors

Its Way to Y2K,” Sept. 1999, p. 91, McAllister Isaacs et al., “ITMA 99's Star: The Computer,”

Sept. 1999, p. 28, and Wayne A. Tincher, “The Jet Age Dawns at ITMA,” Nov. 1999, p. 27; Phil

Owen, “Digital Printing: Realities and Possibilities,” Textile Chemist and Colorist & American

Dyestuff Reporter, Feb. 2000, p. 22; and IT Strategies Inc., “Digital Printing: Prelude to the

Revolution,” Bobbin, Jan. 1997, p. 30.

21

Figure 3

Shuttleless looms: Speed of weaving1 with five types of looms, 1982, 1989, and 19982

 

1

 Weaving speed is measured by weft-insertion rate in yards of filling inserted per minute (ypm), essentially indicating the amount of

fabric woven per minute.

 

2

 The figure shows the highest speeds of each loom type listed in the Textile World shuttleless weaving charts, Oct. 1982, Nov. 1989,

and May 1998. The increases in those speeds from 1982 to 1998 were 53 percent for air jet, 36 percent for water jet, 9 percent for

projectile, 50 percent for flexible rapier, and 167 percent for rigid rapier.

Source: McAllister Isaacs, Textile World, “Air Jets Blow Hot in the U.S. Weaving Market,” Nov. 1989, p. 42, and Loom Makers Get

Ready for ITMA 99,” May 1998, p. 86.

Digital printing holds promise for a new era of textile printing with endless variety in

customized printing and large print patterns unconstrained by printing-screen dimensions.38

Significant change is occurring in tentering, a finishing process at or near the end of the fabric

production sequence that affects fabric quality. In tentering, fabric is pulled through a tenter

frame while under width-wise tension in the presence of heat and moisture to ensure that the

fabric has the desired width and number of yarns per inch in both directions and that the yarns
 

39 McAllister Isaacs and Edward J. Elliott, “Tenterframes: Finishing Plant Workhorses,”

Textile World, Sept. 1999, p. 110.

 

40 Information in paragraph is from Stephen Gray, CAD/CAM in Clothing and Textiles

(Hampshire, England: Gower Publishing Ltd., 1998), and K.G. Melling, Textile World,

“CAD/CAM: Screen to Machine,” Feb. 1998, p. 66, and “Valdese Weavers Designs for the 21st

Century,” Feb. 2000, p. 45. Valdese Weavers reportedly estimates the cost of a fabric pattern

simulated on screen at about $200, compared with $1,500 to $2,500 for a one-yard woven fabric

sample.

 

41 Information on U.S. health and safety regulations and industry practices is available on

homepages of the U.S. Environmental Protection Agency (http://www.epa.gov) and Occupational

(continued...)

22

are perpendicular to each other. Modern tenters run faster and can handle wider fabrics than

in the past, and they contain in-process detectors to measure and correct for specific fabric

parameters, such as the number of yarns per unit length. Some tenters are designed to handle

different fabric widths and types, including knits.39

CAD/CAM Systems

The growing use of computer-aided design/computer-aided manufacturing (CAD/CAM)

systems is revolutionizing textile design and the linkages among suppliers, producers, and

customers in the textile supply chain. The flexibility, productivity, and information-storage

ability of these systems enable mills to use digitized results of optical yarn-evenness testers

for yarn quality control and as input for creating virtual fabrics on screen with different yarn

characteristics, weave structures, colors, prints, and surface textures. CAD/CAM systems

allow designers and customers to view and select from the virtual fabrics before the costly

steps of making up fabric samples or commencing production for sale. Designs selected for

production can be used to speed the development of the weave plan for the loom and of dye

formulations or printing procedures. The CAD/CAM systems reduce cycle times for product

development, and they improve accuracy, fabric quality, efficiency, flexibility, and

responsiveness to customer needs over traditional ways of developing fabrics, in part because

they facilitate coordination among operations. The CAD/CAM system of Valdese Weavers,

for example, links the fabric pattern creation, loom settings, and production scheduling for

weaving and finishing; the coordination reportedly results in loom downtimes of just minutes

between the weaving of one fabric roll and the next.40

Health, Safety, and Environmental Regulations

Mills are subject to Federal, State, and local regulations that involve health and safety issues

in protecting workers, the public health, and the environment. For example, regulations on

workplace safety and worker health address exposure to cotton dust, noise, and formaldehyde

and the handling of hazardous chemicals, and regulations on public health and the

environment address the discharge and disposal of various substances. Industry compliance

with extant and future regulations may affect its costs significantly, such as through installing

new equipment, training workers in safety standards, monitoring effluents from finishing, or

recycling hazardous substances.41 Although U.S. textile industry officials claim that
 

41 (...continued)

Safety and Health Administration (http://www.osha.gov/index.html), both of which have links to

documents specific to the textile industry.

 

42 ATMI, “E3 - Encouraging Environmental Excellence,” found at Internet address

http://www.atmi.org/ Programs/e3.html, retrieved June 29, 2000, and James A. Morrissey,

“Washington: More Attention to Environment,” Textile World, Feb. 1998, p. 61. 

 

43 EPA, Residual Risk Report to Congress (EPA-453/R-99-001), Mar. 1999, found at Internet

address http://www.epa.gov/ttn/oarpg/t3/reports/risk_rep.pdf, retrieved Feb. 4, 2000. 

 

44 James A. Morrissey, Textile World, “Environmental Issues Bear Watching,” Feb. 2000, 

p. 14, and “Washington: More Attention to Environment,” Feb. 1998, p. 61. 

23

producers in developing countries do not incur similar costs, trade sources note that the

technology acquired by U.S. industry to comply with environmental regulations has led to

productivity gains, thereby partly offsetting the cost of compliance.

A program sponsored by the U.S. textile industry, called Encouraging Environmental

Excellence (or E3), promotes environmental preservation through company implementation

of action plans involving work in their plants and with suppliers, customers and communities,

in addition to interaction with regulatory agencies. Company projects under the program,

among other things, have resulted in sharing wastewater and sewage disposal costs with

communities and more recycling of steam and solid waste such as paper and cotton waste.

Reportedly, along with environmental improvements, participating firms have seen economic

payoffs, such as those from conserving water and energy.42

The U.S. Environmental Protection Agency (EPA), acting under the Clean Air Act, has

promulgated technology-based emission standards on hazardous pollutants in the air. Known

as the maximum achievable control technology (MACT) program, the approach is to use

available technology and work practices to reduce emissions. The program will affect many

industries that emit potential air pollutants.43 In the broadwoven fabric industry, the greatest

impact is expected to be in dyeing and printing due to the nature of processing. The textile

industry has worked with the EPA in several areas to develop the MACT standard for

emissions, including gathering survey data on textile plant emissions to identify problem

areas.44

U.S. MARKET

Consumer Characteristics and Factors Affecting Demand

The U.S. market for broadwoven fabrics, as measured by apparent consumption, totaled about

$21 billion in 1999. Although the market showed little growth overall during 1994-99, its

composition changed significantly, as demand for apparel fabrics fell and that for home

textiles and industrial fabrics rose. The domestic market for apparel fabrics, historically the

principal market for domestic broadwoven fabrics, declined during the 1990s, as U.S. apparel

production fell and apparel imports rose. More recently, an increase in imports of finished

home textiles, such as bedsheets, has reduced demand for certain broadwoven fabrics. The

share of the U.S. broadwoven fabric market accounted for by imports averaged about 17
 

45 Based on data from ATMI. The estimate for home textiles includes fabric made for captive

use by vertically integrated mills. According to Kurt Salmon Associates (KSA), “Soft Goods

OutlookK 2000 – and Beyond,” Dec. 1999, one-third of total textile output goes to apparel.

 

46 Calculated based on personal consumption expenditures on apparel for males and females

as reported by the U.S. Bureau of Economic Analysis (BEA) in table titled, “Underlying Detailed

Estimates for PCE,” as reported in Stat-USA at

http://www.stat-usa.gov/online.nsf/NIPANav?OpenNavigator, retrieved Dec. 30, 1999. Base year

for data is 1996.

 

47 Based on shipments data of the U.S. Census Bureau for SIC 23. Data for 1999 are estimated

by the Commission. 

 

48 KSA, “Soft Goods OutlookK 2000,” p. 9. Roughly 36 percent of the market is accounted

for by imports from Mexico and the Caribbean countries, a large share of which are made from

U.S. fabrics.

 

49 For additional information about the apparel industry, see USITC, Industry & Trade

Summary–Apparel, USITC publication 3169, Mar. 1999.

24

percent in 1999, compared with 16 percent in 1994. A U.S. industry source estimates that

most imported broadwoven fabrics are for use in the production of apparel, while roughly onehalf of domestic broadwoven fabrics are for use in the production of home textiles and onethird for apparel.45

Apparel

U.S. demand for apparel fabrics is affected by such factors as trends in domestic woven

apparel production, changes in fashion and consumer tastes, and fluctuations in consumer

spending on apparel. Although the domestic market for apparel has expanded, imports have

supplied all of the growth. As shown in figure 4, real growth in domestic consumer spending

on apparel averaged 7 percent annually during 1994-99,46 while that for U.S. imports of

woven apparel averaged 6 percent annually. In contrast, real growth for both domestic

broadwoven fabric and apparel shipments averaged only about 1 percent annually.47 Kurt

Salmon Associates estimates that imports accounted for 88 percent of the domestic apparel

market in terms of quantity (square meter equivalents) in 1999, compared with 51 percent in

1992.48 U.S. apparel imports are likely to continue to grow as U.S. import quotas are phased

out (see section on “U.S. trade measures” for further information).49

The declining U.S. market for broadwoven apparel fabrics has been offset to some extent by

increases in U.S. apparel fabric exports as a result of NAFTA. It is expected that U.S.

broadwoven fabric producers will also benefit from the Trade and Development Act of 2000,

which authorizes duty-free and quota-free access to the U.S. market for apparel assembled in

countries in sub-Saharan Africa and the Caribbean Basin from U.S. fabrics (see “U.S. trade”

for additional information). In addition, in an effort to recapture some of the apparel fabric

market, some large U.S. apparel fabric manufacturers have begun to offer U.S. retailers and

apparel manufacturers the full apparel “package” in which they use their own fabric in

producing garments made to customer specifications. 
 

50 Estimated by the Conmmission based on data from ATMI. Some of the fabric used in home

textiles include fabric that is produced and consumed by vertically integrated mills.

25

Figure 4

Indexes of U.S. shipments of broadwoven fabrics and apparel, consumer spending on apparel,

and imports of woven apparel, 1994-99

Source: Apparel shipments estimated by the Commission based on official statistics of the U.S. Census Bureau

and the U.S. Bureau of Labor Statistics. All other data compiled from official statistics of the U.S. Department of

Commerce.

Consumer taste is another important factor affecting the market for broadwoven apparel

fabrics. Knit apparel has become increasingly popular among consumers looking for comfort.

For example, in women’s career apparel, knit sweater sets have replaced part of the market

previously held by tailored apparel, which is generally made with broadwoven fabric.

Similarly, some market segments, such as that for wool broadwoven fabrics, have been

particularly affected by the adoption of casual attire in the work place, reducing consumer

demand for tailored apparel using such fabrics. In response to market demand for more

comfortable garments, broadwoven fabric manufacturers have begun offering a larger

selection of woven fabrics made at least in part with fibers and yarns that stretch.

Home Textiles

Demand for broadwoven fabrics in home textiles has reportedly grown significantly since

1994. It is estimated that roughly 7 billion square meters of domestic broadwoven fabrics were

used in the manufacture of home textiles in 1998.50 The market for home textile fabrics is

divided into three broad end-use segments, namely upholstered furniture; carpets and rugs

(e.g., carpet backing); and bed, bath, and other home furnishings (bed and bath). Within each
 

51 In 1998, 11 percent of U.S. shipments of sheets, pillowcases, towels, and washcloths were

made for the institutional market, with most of the remaining share being sold through

traditional channels for residential use. U.S. Census Bureau, CIR: Bed and Bath Furnishings,

Summary 1998, MQ314X(98)-5. 

 

52 U.S. Census Bureau, “Historical Income Tables-Divisions-Households by Median and Mean

Income: 1976-1999,” found at Internet address

http://www.census.gov/hhes/income/histinc/inchhdet.html, retrieved Oct. 29, 2000.

 

53 For more information on the home textiles market, see USITC, Industry & Trade

Summary–Home Textiles, USITC publication 3170, Mar. 1999, p. 15.

 

54 Based on data from U.S. Census Bureau, “Historical Income Tables - Households by

Median and Mean Income: 1967-1998,” found at Internet address

http://www.census.gov/hhes/income/histinc/h10.html, retrieved Oct. 30, 2000. Data reflect

households between ages 35 and 54.

 

55 Culp, Inc., 10-K Form filed with the SEC on July 30, 1999, and National Association of

Realtors, ”NRA Expects Lower Interest Rates and Low Inflation,” news release, June 15, 1999,

found at Internet address http://nar.realtor.com/search/home.htm, retrieved Dec. 30, 1999.

 

56 Based on data from U.S. Census Bureau on the value of construction put in place in the

United States, found at Internet address

http://www.stat-usa.gov/Online.nsf/vwFileLookup/C30TAB1.CE, retrieved Dec. 30, 1999.

 

57 Charles Bremer, ATMI, interview by USITC staff, Washington, DC, Nov. 16, 1999.

26

of these segments, the market can be further split into residential and institutional uses. For

all three market segments, residential uses are believed to be the largest domestic market for

home textile fabrics.51

The residential home textile fabric market has benefitted from favorable demographics,

including the creation of nearly 6 million new households during 1994-99.52 Baby boomers

(those born between 1946 and 1964) are now spending more time at home and seeking to

make their homes more comfortable, often referred to in the trade as the “cocooning effect.”53

Baby boomers account for roughly 43 percent of U.S. households and have the highest

average per capita income.54 In addition, the average size of new homes has increased in recent

years, which has contributed to the increase in purchases of home textiles (and thus home

textile fabrics) per home.55

Institutional home textile fabrics are used in products for the hospitality industry (e.g., hotels

and restaurants), as well as for hospitals, nursing homes, and other institutional facilities. It

is believed that U.S. consumption of institutional home textile fabrics has grown concurrent

with the U.S. economy. New construction of motels and hotels, large users of home textiles,

nearly tripled during 1994-99.56 The products for the institutional market are generally more

homogeneous and experience more import competition than those sold in the residential

market.57 Many institutional products, such as bedsheets, are commodity products that sell at

low price points. 

Demand for broadwoven fabrics in the home textile market also is to some extent determined

by trends occurring in the specific market segment for which the fabric is used. Home fashion

trends, the use of alternative materials, and the relative competitiveness of imported finished

products all affect the demand for fabric. 
 

58 BEA, Personal Consumption Expenditures, as reported in table titled, “Underlying Detailed

Estimates for PCE,” as reported in Stat-USA at

http://www.stat-usa.gov/online.nsf/NIPANav?OpenNavigator, retrieved Oct. 25, 2000.

Semidurable house furnishings also include lampshades, brooms, and brushes. Base year is 1996.

 

59 U.S. Census Bureau, CIR: Bed and Bath Furnishings (MQ314X), Summary for 1994 and

1999. 

 

60 Ibid.

 

61 Culp, Inc., 10-K Form filed with the SEC on July 30, 1999.

27

Bed and Bath

The consumer market for bed and bath articles, including bed linens, comforters, pillows,

towels, and draperies, has been strong, with real personal consumption expenditures for

semidurable house furnishings increasing at an annual average rate of 3 percent during 1994-

99.58 The robust economy, accompanied by new construction and increased interest in home

furnishings, has contributed to growth in this sector. Home fashion trends can significantly

influence demand for broadwoven fabrics in this sector. For example, recent trends favor

streamlined window fashions, which require less fabric than the elaborate window treatments

popular early in the 1990s. The introduction of new bed and bath products also affects fabric

demand. The introduction of high-count cotton sheets and oversized bath towels increased

demand, while the introduction of knit sheets reduced demand for broadwoven fabrics. 

Competition in the U.S. home textile market intensified during 1994-99, resulting in

downward pressure on prices at retail. Imports accounted for an increasingly larger share of

the domestic bed and bath market, generally competing at the lower price points in the market.

For example, the import share of U.S. consumption of terry towels accounted for by imports

in 1999 was 58 percent by quantity and 32 percent by value, compared with 1994 levels of

36 percent and 15 percent, respectively.59

Roughly one-fourth of the bed and bath products produced domestically are made in vertically

integrated textile mills, which produce yarn, fabric, and the end-use product. The production

process for sheets and terry toweling, in particular, is highly automated, and vertically

integrated textile companies supply most of these products. U.S. shipments of sheets,

pillowcases, and terry towels, which together account for an estimated one-third of U.S. bed

and bath textile shipments, increased by slightly more than 20 percent during 1994-99.60 Many

of these products are sold under brand names owned or licensed by the textile companies,

which generally sell their products directly to retailers and, in some instances, even manage

inventories for retail customers. 

Upholstered Furniture

The U.S. upholstered furniture market reportedly increased at an annual average rate of

roughly 8 percent in nominal terms during 1991-99.61 Among the factors affecting demand for

broadwoven upholstery fabric are style trends in the furniture industry. Furniture with a large,

overstuffed design requires more fabric than that with a slim silhouette. Alternative materials,

particularly leather, also compete with broadwoven fabric, although use of leather in furniture

is relatively small. Reportedly, upholstered furniture consumers are increasingly emphasizing
 

62 Culp, Inc., 10-K Form filed with the SEC on July 28, 2000.

 

63 CMI Industries, Inc., 10-K Form filed with the SEC on Apr. 1, 1999.

 

64 U.S. Census Bureau, CIR: Carpets and Rugs (MA314Q(99)-1), Summary 1999.

 

65 “Rugs: State of the Industry,” Floor Covering Weekly, Jan. 3, 2000, p. 1.

 

66 Estimated by the Commission based on data from ATMI. 

28

product quality and quick delivery.62 The competitive market forces for upholstery fabric

generally favor domestic over imported fabrics. Because upholstered furniture is bulky to ship

and is often made-to-order, import competition is less than in the bed and bath segment or the

apparel market overall. According to a major upholstery fabric producer, upholstery fabrics

compete less on price than on product styling and differentiation, quality, and customer

service.63

Carpets and Rugs

Broadwoven fabrics are frequently used as part of the backings of carpets and rugs,

particularly tufted carpets and rugs, which account for most U.S. production. The base

broadwoven fabric is usually made with polypropylene yarn and is a relatively low-value

product. 

Demand for broadwoven fabrics for carpet and rug backing is highly dependent on carpet and

rug production. The U.S. market for carpets and rugs has been strong, despite a trend towards

greater use of alternative flooring materials in the residential market. U.S. shipments of

carpets and rugs increased by 20 percent during 1994-99.64 Like the other home textile

sectors, demand for carpets and rugs is influenced by changes in economic activity, and home

decorating fashions. Carpets, for example, have lost market share to wood, tile, and laminates

in the residential market, but the popularity of area rugs to cover these hard surfaces has

increased.65 The use of other backing techniques and materials, such as the use of foam, can

also influence demand for broadwoven fabric in the carpet and rug market. 

Industrial

The industrial fabric market is much smaller and more fragmented than the apparel and home

textile markets, but it is growing as new fibers and finishes are developed, creating expanded

opportunities for the use of broadwoven fabrics. The industrial fabrics market is estimated to

consume just over 15 percent of U.S. broadwoven fabric production66 and comprises

numerous niche markets, as shown in table 3. Based on data provided from the Industrial

Fabrics Association International (IFAI), it appears that three of the largest markets for

industrial broadwoven fabrics in North America are medical protective products, the

automotive industry, and geotextiles. 

Factors influencing demand for industrial fabrics are generally unique to the market segment

in which they are used, in part because many industrial fabrics are custom designed and

manufactured to customer requirements. Hence, industrial broadwoven fabrics generally

compete less on price and more on product performance compared with apparel and home
 

67 Joe Dieltz, Manager, Market Information, IFAI, telephone interview by USITC staff, Dec.

29, 1999. 

29

Table 3

Broadwoven fabrics: Selected industrial market segments, end-use applications, and estimated

market size for North America

Industrial market segment Selected end uses 

Estimated size of North American market

for all types of fabric and broadwoven

fabric in 1998 

Auto ................. Upholstery, carpet backing, air

bags

Total market: 334 million square meters (msm)

Broadwoven fabric market for airbags and

upholstery applications: 80 msm 

Geotextiles ............ Civil engineering (roads),

construction

Total market: 420 msm

Broadwoven fabric market: 90 msm 

Fabric architecture ....... Awnings, tents, canopies,

temporary buildings, roofs

Total market: 40 msm (all of which is

broadwoven fabric)

Electronics ............. Circuit boards Not available

Agriculture ............. Shade cloth, seed beds,

drainage, ground frost protection

Not available

Marine and truck ........ Boat and truck covers, sails Total market: 38 msm (all of which is

broadwoven fabric)

Medical ............... Bandages, surgical drapes, 

protective barriers, synthetic skin 

Total medical protection market (not including

bandages and other medical): 2.9 billion

square meters

Broadwoven fabric medical protection market: 

900 msm 

Miscellaneous industrial ... Filtration, sorption systems,

textile reinforced adhesives

Not available

Safety and protective ..... Fire, chemical and biohazard

protection, ballistic protection, cut

and slash protection, particulate

protection 

Total market for particulate, ballistic, and

thermal protection: 160 msm. 

Broadwoven fabric market: not available

Source: Estimated by the Commission primarily from IFAI data.

textile fabrics. For commodity types of industrial fabrics that have less specific requirements

for their end uses and can be produced relatively inexpensively in mass quantities, competition

is significant in terms of both fabrics and end-use products, such as tarpaulins.67 For some

end-use industrial applications, broadwoven fabrics compete with other types of fabrics, such

as nonwoven or knit fabrics, and with other materials, such as paper or plastics. The choice

to use broadwoven fabrics when there is an alternative choice is made based on a number of

factors, including performance and, to some extent, price.

Medical Protection

Demand for industrial fabrics used in medical protection products, such as medical protection

apparel, surgical drapes and gowns, and bed pads, has increased during the past decade, in

part because of efforts to protect workers in the healthcare industry from blood-borne

diseases. Broadwoven fabrics account for an estimated 30 percent or less of the fabrics used

for medical protection products; nonwoven fabrics are believed to account for most of the
 

68 IFAI, The North American Market for Protective Clothing - Spring 1997, 1997, p. 51.

 

69 Based on data from Automotive News, ‘99 Market Handbook, p. 17, and ‘98 Market

Handbook, p. 26.

 

70 Wards Automotive Reports, “Wards Reports Record North American Production in 1999,”

as reported by PR Newswire, Dec. 29, 1999. 

 

71 Collins & Aikman Corp., 10-K Form filed with the SEC on Mar. 26, 1999. 

 

72 Joe Dieltz, Manager, Market Information, IFAI, telephone interview by USITC staff, Dec.

29, 1999. The TEA-21 authorized a roughly 35-percent increase in annual funding in 1999 from

1997 levels for the national highway system and the interstate maintenance program. U.S.

Department of Transportation, TEA-21 Fact Sheet, found at Internet address

http://www.fhwa.dot.gov/tea21/factsheets/index.htm, retrieved Jan. 12, 2000.

30

market.68 In general, medical protection products made of broadwoven fabrics are intended

for multiple uses and therefore have a higher initial cost than those made of nonwoven fabrics,

which are often disposable (i.e., one-time use). A major determinant of demand for

broadwoven fabrics in this market segment is total costs, including those associated with the

purchase, laundering (for woven products), and disposal (particularly for nonwoven products).

Automotive

Demand for broadwoven fabrics used in automotive components, such as airbags, upholstery,

convertible tops, tubes, and hoses, closely tracks North American production of motor

vehicles. North American production of cars and trucks increased by 2 percent during 1994-

98,69 and then grew by nearly 10 percent in 1999.70 Broadwoven fabrics compete in the

automotive market with other fabrics, including knit and nonwoven fabrics, and with other

materials, such as leather. One U.S. automotive fabric manufacturer, Collins & Aikman

Corp., partly attributed its recent decline in automotive upholstery fabric sales to stronger

demand for leather automobile upholstery.71

Geotextile

Geotextiles are fabrics used in a wide range of civil engineering applications such as road

construction, both as part of the road structure and for embankments, tunnels, and soil walls

and slopes. Broadwoven fabrics compete with nonwoven fabrics and, to some extent, knit

fabrics for use in geotextile applications. Performance and cost are the major factors affecting

choice of product used. Broadwoven fabrics are used in situations in which stability of the

fabric and strength are important product characteristics. The amount of new road

construction in particular, as well as construction in general, has a significant effect on the

market for geotextile products. The Transportation Equity Act of the 21st Century (TEA-21;

Public Law 105-178) is expected to boost demand for geotextiles as a result of new funding

for highway construction and repair.72
 

73 John S. Pickler and Brenda B. Lowry, Textiles & Apparel Industry Update, Prudential

Securities, May 24, 1999, p. 1, and Cone Mills Corp., 10-K Form filed with the SEC on Apr. 4,

1999. 

 

74 Estimated by the Commission based on official statistics of the U.S. Census Bureau, CIR:

Broadwoven Fabrics, MQ313T, 1999-3, and prior issues. 

31

Consumption

Apparent U.S. consumption of broadwoven fabrics (U.S. producers’ shipments minus exports

plus the customs value of imports) decreased slightly during 1994-99 to an estimated $21.2

billion (table 4). The share of apparent consumption accounted for by imports increased from

15.9 percent in 1994 to 17.1 percent in 1999. The aggregate data mask significant shifts in

the rate of consumption of different fabric types. As shown in tables 5 and 6, the steepest

declines in consumption occurred in fabrics used largely in apparel, such as printcloth,

broadcloth, and wool fabrics. Denim, which accounts for a large share of the domestic apparel

fabric market, benefitted from strong consumer demand for jeans and other denim goods

during 1994-98, when apparent consumption of denim grew at an annual average rate of 3

percent, before declining by 21 percent in 1999. The decline in 1999 was attributed to

overcapacity in the North American and global denim market.73 Apparent U.S. consumption

of fabric made with 85 percent or more manmade filament yarn grew at an annual average

rate of 2.5 percent. Almost 70 percent of this fabric is believed to be used for carpet backing,

a relatively low value-added fabric.74

Table 4

Broadwoven fabrics: U.S. producers’ shipments, exports of domestic merchandise, imports for

consumption, and apparent consumption, 1994-99

Year

U.S. producers’

shipments1 U.S. imports U.S. exports

Apparent U.S.

consumption

 Ratio of imports to

consumption

)))))))))))))))))Million dollars))))))))))))))))) Percent

1994 ......... 19,934 3,413 1,821 21,527 15.9

1995 ......... 20,237 3,518 1,974 21,782 16.2

1996 ......... 19,805 3,448 2,156 21,097 16.3

1997 ......... 20,368 3,863 2,322 21,909 17.6

1998 ......... 21,512 3,864 2,357 23,019 16.8

1999 ......... 20,162 3,618 2,617 21,163 17.1

1

 Shipments data consist of U.S. product shipments of broadwoven fabrics of cotton, manmade fibers, and wool,

plus product shipments for finished broadwoven fabrics (not finished in weaving mills), minus commission finishing.

For 1994-96, the estimated value of converter shipments was added to finishing to make the data correspond more

closely with the data reported under the NAICS. Data for 1999 are estimated by USITC staff based on U.S.

production of broadwoven fabrics as reported by the U.S. Census Bureau in CIR: Broadwoven Fabrics (MQ313T)

and the producer price index for broadwoven fabrics as reported by the U.S. Bureau of Labor Statistics.

Source: Compiled from official statistics of the U.S. Census Bureau, 1998 Annual Survey of Manufactures and

selected back issues, 1997 Economic Census: Broadwoven Fabric Mills and Broadwoven Fabric Finishing Mills,

and official statistics of the U.S. Department of Commerce, except as noted.
32

Table 5

Broadwoven fabrics: U.S. production, imports for consumption, exports of domestic

merchandise, and apparent consumption, by fibers, 1994-99

Item and year

U.S.

production

U.S.

imports1

U.S.

exports

Apparent U.S.

consumption

Ratio of imports to

consumption

)))))))))))))Million square meters-))))))))))))) Percent

Cotton fabric:

1994 ........... 3,740 1,589 247 5,082 31.3

1995 ........... 3,753 1,485 278 4,960 29.9

1996 ........... 4,010 1,326 279 5,057 26.2

1997 ........... 4,246 1,591 301 5,537 28.7

1998 ........... 3,974 1,563 309 5,228 29.9

1999 ........... 3,721 1,441 410 4,752 30.3

Manmade fiber fabric:

1994 ........... 9,999 893 315 10,577 8.4

1995 ........... 9,858 839 335 10,362 8.1

1996 ........... 9,522 888 388 10,023 8.9

1997 ........... 9,794 1,027 442 10,379 9.9

1998 ........... 9,616 1,108 449 10,275 10.8

1999 ........... 9,887 1,087 480 10,494 10.4

Wool fabric:

1994 ........... 149 30 8 171 17.5

1995 ........... 136 27 9 153 17.6

1996 ........... 127 27 11 144 18.9

1997 ........... 147 31 13 165 18.8

1998 ........... 111 33 15 128 25.5

1999 ........... 65 34 13 86 39.5

Total:

1994 ........... 13,888 2,512 570 15,830 15.9

1995 ........... 13,746 2,351 622 15,475 15.2

1996 ........... 13,660 2,241 677 15,224 14.7

1997 ........... 14,187 2,650 756 16,080 16.5

1998 ........... 13,701 2,704 773 15,631 17.3

1999 ........... 13,673 2,562 903 15,332 16.7

 

1

 The import data shown in this table differ from those in table 8 of this report because the data come from two

different sources. The import data in this table (table 5), along with the production, export, and consumption data,

were compiled from a U.S. Census Bureau publication ( as noted below), and are presented here to show the

relative importance of the U.S. market for fabrics, by fibers. The import data in table 8 were compiled by the

Commission, using its own HTS import concordances, from official statistics of the U.S. Department of Commerce.

Source: U.S. Census Bureau, CIR: Broadwoven Fabrics (MQ313T, formerly MQ22-T), 1994-99, table 11. 
33

Table 6

Broadwoven fabrics: U.S. production, imports for consumption, exports of domestic

merchandise, and apparent consumption, by selected fabrics, 1994-99

Item and year

U.S.

production1

U.S.

imports

U.S.

exports2

Apparent U.S.

consumption

Ratio of

imports to

consumption

))))))))))))))))))Million square meters))))))))))))))) Percent

Manmade fiber, 85 percent or more

of filament yarn:

1994 ........................... 5,070 443 170 5,343 8.3

1995 ........................... 5,103 445 187 5,361 8.3

1996 ........................... 5,074 565 223 5,416 10.4

1997 ........................... 5,365 581 251 5,695 10.2

1998 ........................... 5,186 586 250 5,522 10.6

1999 ........................... 5,668 643 257 6,054 10.6

Cheesecloth and batistes of cotton and 

manmade-fiber spun yarn:

1994 ........................... 801 46 29 818 5.6

1995 ........................... 839 46 29 856 5.4

1996 ........................... 1,183 53 28 1,207 4.4

1997 ........................... 1,245 66 33 1,277 5.1

1998 ........................... 727 83 29 781 10.6

1999 ........................... 733 60 26 767 7.8

Printcloth of cotton and manmade-fiber

spun yarn:3

1994 ........................... 1,255 445 41 1,659 26.8

1995 ........................... 1,133 401 43 1,491 26.9

1996 ........................... 987 313 42 1,258 24.9

1997 ........................... 962 399 36 1,324 30.1

1998 ........................... 912 384 57 1,239 31.0

1999 ........................... 732 335 64 1,003 33.0

Sheeting of cotton and manmade-fiber

spun yarn:

1994 ........................... 2,121 371 72 2,420 15.3

1995 ........................... 2,168 316 70 2,414 13.1

1996 ........................... 2,103 265 72 2,295 11.5

1997 ........................... 2,107 273 82 2,298 11.9

1998 ........................... 2,244 263 80 2,428 10.8

1999 ........................... 2,252 238 90 2,400 9.9

Poplin and broadcloth of cotton and

manmade-fiber yarn:3

1994 ........................... 866 456 265 1,057 43.1

1995 ........................... 856 306 49 1,113 27.5

1996 ........................... 810 243 32 1,021 23.8

1997 ........................... 800 243 30 1,013 24.0

1998 ........................... 757 434 55 1,136 38.2

1999 ........................... 708 369 58 1,019 36.2

Twills and sateens (except denim) of cotton

and manmade-fiber spun yarn:

1994 ........................... 911 282 41 1,152 24.4

1995 ........................... 873 239 46 1,066 22.4

1996 ........................... 867 209 56 1.020 20.5

1997 ........................... 1,068 273 70 1,270 21.5

1998 ........................... 1,097 283 80 1,300 21.8

1999 ........................... 1,066 293 113 1,246 23.5

See footnotes at end of table.
 

75 Production data for sheeting fabric include large quantities used internally by mills to make

bedsheets and other home furnishings. Therefore, much of the sheeting fabric that is included in

production data for the broadwoven fabrics industry is not included in the data on broadwoven

fabric shipments.

34

Table 6–Continued

Broadwoven fabrics: U.S. production, imports for consumption, exports of domestic

merchandise, and apparent consumption, by selected fabrics, 1994-99

Item and year

U.S.

production1

U.S.

imports

U.S.

exports2

Apparent U.S.

consumption

Ratio of

imports to

consumption

)))))))))))))))))Million square meters-

))))))))))))))))

Percent

Blue denim of cotton:

1994 ........................... 687 109 87 709 15.4

1995 ........................... 729 174 97 806 21.5

1996 ........................... 707 176 109 774 22.7

1997 ........................... 703 167 122 748 22.3

1998 ........................... 794 153 135 812 18.9

1999 ........................... 675 139 172 642 21.7

1

 Production data for fabrics of manmade-fiber spun yarns were based on data from CIR: Broadwoven Fabrics,

(MQ313T), 1999 and prior issues, table 3.

2

 Exports of manmade fiber fabrics estimated by the Commission.

3

 Includes spun filament yarn combinations.

Source: U.S. Census Bureau, CIR: Broadwoven Fabrics, (MQ313T, formerly MQ22-T), 1994-1999, table 11, unless

otherwise noted.

Production

U.S. producers’ shipments of broadwoven fabrics increased by about 1 percent during 1994-

99 to $20.2 billion.75 Slightly more than 70 percent of U.S. broadwoven fabric production by

quantity is chiefly of manmade fibers. Although aggregate production levels remained

relatively steady during1994-99, significant changes occurred among fabrics. Production of

blue denim and other twills increased during 1994-98, reflecting consumer demand for more

casual wear. Production of certain other fabrics used chiefly in apparel, such as printcloth,

poplin and broadcloth, and wool fabric, declined during 1994-99. During this period, U.S.

companies decreased domestic apparel fabric production capacity, either by shutting down

certain apparel fabric operations or shifting production to other types of fabric. Production

of manmade-filament yarn fabric increased by 12 percent during the period.
 

76 See, for example, ATMI, “International Trade,” Textile HiLights, Dec. 1998, pp. i-v, and

“Low Cost Imports Still Staggering Industry,” Southern Textile News, June 7, 1999, p. 12.

35

U.S. TRADE

Total U.S. trade in broadwoven fabrics increased continually during 1994-99, rising by 19

percent to $6.2 billion. The increase largely reflected steady growth in exports, which grew

by 44 percent to a high of $2.6 billion. Imports remained fairly stable at an average of about

$3.5 billion per year during 1994-96, accelerated to a record $3.9 billion in 1997 and 1998,

and then fell to $3.6 billion in 1999. As a result, the U.S. trade deficit in broadwoven fabrics

narrowed significantly in 1999, to $1.0 billion, after averaging $1.5 billion in 4 of the

preceding 5 years (table 7). 

The pattern of U.S. trade in broadwoven fabrics during 1994-99 mainly reflected shifts in

trade with NAFTA partners Canada and Mexico, the principal export markets, and Asia, the

largest import source. These trading partners together accounted for 71 percent of the trade

in 1999. Since the implementation of NAFTA in 1994, the U.S. trade surplus with the

NAFTA partners more than doubled to $1.2 billion in 1999, as both U.S. exports and U.S.

imports more than doubled to $1.7 billion and $0.6 billion, respectively. The Caribbean Basin

Economic Recovery Act (CBERA) countries make up the only other region with which the

United States posted a trade surplus in broadwoven fabrics ($185 million in 1999). U.S.

broadwoven fabric exports to Mexico and CBERA countries (e.g., Costa Rica, the Dominican

Republic, Guatemala, El Salvador, and Honduras) consisted mostly of fabrics for use in the

production of apparel for export to the United States.

The U.S. trade deficit in broadwoven fabrics with Asia widened from $1.6 billion in 1994 to

$1.9 billion in 1998, and then narrowed to $1.7 billion in 1999. Imports from Asia rose from

$1.8 billion a year during 1994-96 to highs of almost $2.1 billion in 1997 and 1998, before

declining to $1.9 billion in 1999. 

Exports to Asia fell sharply from an average of about $245 million a year during 1994-97 to

$179 million in 1999. The record U.S. import levels of 1997-98 and the reduced U.S. export

levels of 1998-99 largely reflected the effects of the Asian financial crisis of mid-1997 to early

1998, as weak economic activity in East Asia led to reduced demand for foreign goods and

increased efforts to boost exports to earn much needed foreign exchange.76 At the same time,

the significant currency devaluations of several Asian countries effectively reduced U.S.

dollar prices of their goods in the U.S. market, but increased U.S. export prices in Asian

markets.
36

Table 7

Broadwoven fabrics: U.S. exports of domestic merchandise, imports for consumption, and trade balance

for selected countries and country groups, 1994-99

(1,000 dollars)

Item 1994 1995 1996 1997 1998 1999

U.S. exports of domestic merchandise:

Italy .......................... 26,346 27,449 34,343 34,135 39,373 32,944

Canada ....................... 415,393 455,873 481,931 553,479 574,409 528,116

Korea ........................ 35,332 36,485 24,432 19,794 17,646 21,543

China ........................ 9,777 13,570 13,157 18,131 16,802 20,156

India ......................... 1,942 2,252 3,381 5,416 7,423 6,191

Mexico ........................ 305,794 309,715 433,787 479,175 593,980 1,216,884

Pakistan ...................... 131 307 233 158 137 368

Japan ........................ 47,550 45,647 39,647 33,311 26,097 21,970

Hong Kong .................... 66,306 63,712 65,053 81,855 63,883 54,858

Taiwan ....................... 21,692 22,419 20,906 22,755 17,669 9,290

All other ....................... 890,462 996,501 1,039,268 1,073,979 999,633 704,759

Total ....................... 1,820,725 1,973,930 2,156,138 2,322,188 2,357,052 2,617,079

EU-15 ........................ 370,882 409,030 411,626 399,476 389,136 264,900

Asia .......................... 240,148 251,579 234,370 252,843 196,110 179,191

NAFTA ....................... 721,187 765,588 915,718 1,032,654 1,168,389 1,745,000

CBERA ....................... 176,927 195,392 222,708 242,565 280,012 189,359

U.S. imports for consumption:

Italy .......................... 448,569 434,323 429,077 421,872 422,135 382,804

Canada ....................... 207,163 262,927 293,794 333,308 350,589 335,727

Korea ........................ 374,746 403,976 389,094 380,403 342,186 333,963

China ........................ 233,808 222,727 232,236 377,822 318,122 314,572

India ......................... 169,364 212,321 230,776 266,936 258,182 222,133

Mexico ........................ 51,961 140,944 196,650 255,674 248,881 242,902

Pakistan ...................... 128,004 152,928 138,117 200,098 240,202 192,481

Japan ........................ 378,746 273,584 260,775 274,300 240,139 215,365

Hong Kong .................... 122,146 118,281 108,201 115,932 143,377 151,471

Taiwan ....................... 166,965 172,785 167,050 143,028 136,918 170,565

All other ....................... 1,131,694 1,123,385 1,002,006 1,093,689 1,163,177 1,056,133

Total ....................... 3,413,166 3,518,181 3,447,778 3,863,063 3,863,908 3,618,116

EU-15 ........................ 864,291 835,607 818,791 829,174 842,511 786,358

Asia .......................... 1,850,836 1,830,773 1,780,427 2,086,418 2,052,288 1,925,576

NAFTA ....................... 252,665 398,707 486,074 583,350 595,190 575,044

CBERA ....................... 13,232 11,096 8,392 6,056 4,961 4,302

U.S. trade balance:

Italy .......................... -422,223 -406,874 -394,734 -387,737 -382,762 -349,860

Canada ....................... 208,230 192,946 188,137 220,171 223,820 192,389

Korea ........................ -339,414 -367,491 -364,662 -360,609 -324,540 -312,420

China ........................ -224,031 -209,157 -219,079 -359,691 -301,320 -294,416

India ......................... -167,422 -210,069 -227,395 -261,520 -250,759 -215,942

Mexico ........................ 253,833 168,771 237,137 223,501 345,099 973,892

Pakistan ...................... -127,873 -152,621 -137,884 -199,940 -240,065 -192,113

Japan ........................ -331,196 -227,937 -221,128 -240,989 -214,042 -193,395

Hong Kong .................... -55,840 -54,569 -43,148 -34,077 -79,494 -96,613

Taiwan ....................... -145,273 -150,366 -146,144 -120,273 -119,249 -161,275

All other ....................... -241,232 -126,884 37,262 -19,710 -163,544 -351,374

Total ....................... -1,592,441 -1,544,251 -1,291,640 -1,540,875 -1,506,856 -1,001,037

EU-15 ........................ -493,409 -426,577 -407,165 -429,698 -453,375 -521,458

Asia .......................... -1,610,688 -1,579,194 -1,546,057 -1,833,575 -1,856,178 -1,746,385

NAFTA ....................... 486,522 366,881 429,644 449,304 573,199 1,169,956

CBERA ....................... 163,695 184,296 214,316 236,509 275,051 185,057

Source: Compiled from official statistics of the U.S. Department of Commerce.
 

77 Data estimated by the Commission based on information from Charles Bremer, Director,

International Trade, ATMI, telephone interview by USITC staff, Feb. 29, 2000.

37

World trade in textiles, including fabrics, will become less restricted as a result of the

phaseout of quotas by the United States and other importing countries (see “U.S. trade

measures” for further information). Such trade liberalization will likely strengthen the

competitiveness of developing countries that have the capability to establish a significant

presence in the U.S. fabric market. These developing countries benefit from access to low-cost

labor inputs.

U.S. Imports

U.S. imports of broadwoven fabrics declined by 12 percent by quantity but remained

relatively steady by value during 1994-96. U.S. imports rose in terms of both quantity and

value in 1997 and 1998, before falling again in 1999. The drop in import volume during 1994-

96 is thought to reflect a drop in U.S. demand for apparel fabrics. The increases in U.S.

imports in 1997 and 1998 are largely attributable to an increase in domestic demand for home

textile fabrics and, most importantly, the effects of the financial crisis in Asia, which supplied

53 percent of the value but 69 percent of the quantity of U.S. broadwoven fabric imports in

1999. The greatest changes in trade occurred with the East Asian countries that had devalued

their currencies, led by the Association of Southeast Asian Nations (ASEAN), whose

shipments grew by 48 percent in quantity during 1996-98. Imports from other Asian

countries, especially India, Pakistan, and China, also increased. In particular, the quantity of

U.S. imports from Pakistan nearly doubled, making Pakistan the leading U.S. supplier of

broadwoven fabric in 1998.

Other major sources of U.S. broadwoven fabric imports are the NAFTA countries, whose

shipments nearly doubled in quantity during 1994-99, while their share of the total import

quantity doubled to 16 percent (figure 5). The increase can be attributed to the preferential

trade status enjoyed by NAFTA countries (see Preferential Trade Programs) and to increased

investment in fabric production in Mexico (see Foreign Industry Profile). In contrast, U.S.

broadwoven fabric imports from the European Union (EU) declined during 1994-99. In

general, the price of EU fabrics is significantly higher than that of fabrics from most Asian

countries. For example, broadwoven fabrics from Italy averaged $5.09 per square meter in

1999, compared with less than $1 for those from Pakistan, China, and India.

An estimated 70 percent of U.S. imports of broadwoven fabrics were intended for the apparel

market in 1999. The remainder is split roughly between the home textile and industrial

markets. U.S. apparel fabric imports have been declining in response to decreased U.S.

demand for apparel fabrics. Since 1996, the decline in apparel fabric imports has been offset

in part by increases in fabric imports intended for other markets, particularly home textiles.

In fact, some imported fabrics traditionally used for apparel are now increasingly being used

for home textile applications. For example, imported broadcloth, a fabric traditionally used

for men’s shirts, is now being used to make bedsheets.77

Broadwoven fabrics of cotton made up 56 percent of the total volume of U.S. broadwoven

fabric imports in 1999, compared with 27 percent of U.S. production (see table 5). China,

Pakistan and India were the top three foreign suppliers, together accounting for 47 percent 
 

78 Similar data are not available for manmade-fiber and wool fabric.

 

79 Only those fabrics that meet the NAFTA rules of origin requirements are eligible for dutyfree treatment. As of January 1, 2001, the only “non-originating” fabrics from Mexico still

subject to a designated consultation level (a type of quota limitation) are woven fabrics of wool

and of artificial staple fibers.

38

1994 total imports: 2.9 billion square meters

Figure 5

Broadwoven fabrics:1 Percentage distribution of U.S. imports, by sources, 1994 and 1999

 

1

 Includes fabrics of cotton, other vegetable fibers, manmade fibers, wool, silk, and glass fibers.

 

2

 Big Three are Hong Kong, Taiwan, and Korea.

Source: Compiled from official statistics of the U.S. Department of Commerce.

of U.S. cotton fabric imports in 1999 (table 8). Slightly more than two-thirds of the total

volume of U.S. broadwoven cotton fabric imports were grey (unfinished) fabrics,78 which

afford the importer or end-user flexibility in finishing the fabric based on market demand.

Wool fabrics account for a relatively small share of the total volume and value of broadwoven

fabric imports (1 percent and 6 percent, respectively, in 1999). In general, U.S. tariff rates on

wool fabrics are higher than those for fabrics of other fibers (see tariff measures) and the

quotas are generally smaller than those for other fibers. Nevertheless, there are no quotas on

U.S. wool fabric imports from the top three suppliers, Italy, Mexico and Canada, and U.S.

tariffs have been eliminated on originating goods of Canada and of Mexico under NAFTA.79

The average unit value for U.S. imports of wool fabrics is generally higher than for most other

imported broadwoven fabrics, with the unit value for imported wool fabrics averaging almost

$7 per square meter, compared with about $1 per square meter for imported cotton and

manmade fiber fabrics.
39

Table 8

Broadwoven fabrics: U.S. imports for consumption, by fiber types and principal countries, 

1994-99

1,000 square meters

Product and country 1994 1995 1996 1997 1998 1999

Cotton fabrics ............. 1,590,778 1,487,269 1,320,148 1,592,462 1,629,654 1,540,035

China ................. 303,165 257,853 210,342 286,890 225,144 285,937

Pakistan ............... 172,511 193,402 192,574 268,995 304,970 260,520

India .................. 139,743 152,968 203,711 220,019 197,204 171,742

Thailand ............... 84,913 66,116 69,643 87,596 132,439 126,342

Mexico ................ 24,778 69,443 91,078 129,474 140,003 151,581

Manmade fiber fabrics ....... 1,011,885 945,399 937,361 1,118,086 1,213,141 1,148,288

Canada ................ 115,343 155,559 154,937 165,410 175,208 192,992

Korea ................. 114,033 129,868 129,052 125,784 123,219 133,206

Japan ................. 169,608 89,766 92,695 106,508 111,403 102,251

Pakistan ............... 90,280 60,904 41,606 105,233 146,024 97,839

Thailand ............... 71,050 67,605 62,676 64,465 77,429 75,864

Wool fabrics .............. 27,349 25,512 25,461 29,671 30,438 31,615

Italy .................. 6,710 6,589 6,962 7,873 8,158 7,286

Mexico ................ 673 1,243 2,134 3,053 3,144 6,858

Canada ................ 3,056 3,540 3,621 5,069 4,437 4,222

Korea ................. 2,477 1,874 1,049 992 1,705 2,338

India .................. 292 338 450 1,277 1,600 1,450

Silk and vegetable fiber

fabrics ................... 218,163 240,744 159,899 235,258 214,926 213,186

India .................. 63,442 92,641 74,018 158,473 101,953 81,206

Bangladesh ............. 89,378 90,015 27,583 10,434 39,490 56,234

China ................. 18,647 14,429 19,058 25,673 26,184 27,056

Russia ................ 2,246 1,637 2,618 4,660 6,587 12,418

Belarus ................ 517 835 836 3,680 7,740 7,423

Glass fiber fabrics .......... 42,991 42,234 109,639 43,056 49,049 76,851

Canada ................ 21,442 19,682 24,722 26,444 35,846 47,133

Belarus ................ 141 19 52 420 1,853 13,424

France ................ 6,710 6,108 66,791 4,550 5,185 5,482

Germany ............... 5,579 4,556 6,144 3,288 664 4,610

Japan ................. 3,331 4,276 4,412 4,220 2,455 3,082

Source: Compiled from official statistics of the U.S. Department of Commerce.
 

80 See appendix B for an explanation of tariff and trade agreement terms.

 

81 The URA represented the culmination of negotiations among 125 countries over an 8-year

period launched in Punta del Este, Uruguay in 1986. On April 15, 1994, the URA was signed in

Marrakesh, Morocco by 111 countries, including the United States. The URA, among other

things, cut global tariffs by more than one-third and will reduce or eliminate nontariff measures

such as quotas. See U.S. House of Representatives, Committee on Ways and Means, Overview

and Compilation of U.S. Trade Statutes, 105th Cong., 1st sess. (Washington, DC: U.S.

Government Printing Office, 1997), WMCP 105-4, pp. 195-199.

 

82 For example, the year 2000 tariff rates for cotton oxford cloth, typically used for men’s

dress shirts, range between 7 percent and 14.7 percent ad valorem, depending on the yarn

number, the finish, and whether or not the fabric was made entirely of cotton or a blend of cotton

and manmade fibers. 

 

83 The NAFTA countries were excluded for the purposes of this calculation, because most

broadwoven fabric imports from these countries entered free of duty in 1999 under the provisions

of NAFTA.

 

84 The MFA, negotiated under auspices of the General Agreement on Tariffs and Trade

(GATT), provided a general framework and guiding principles for negotiation of bilateral

agreements between textile importing and exporting countries for the purpose of setting quotas,

or for unilateral action by an importing country if an agreement could not be reached. The MFA

was designed to deal with problems of market disruption in textile trade in developed countries,

while permitting developing countries to share in expanded export opportunities.

40

U.S. Trade Measures

The primary U.S. trade measures affecting broadwoven fabrics are import tariffs and quotas.80

The United States is reducing tariffs and phasing out quotas over a 10-year period, as required

under the Uruguay Round Agreements (URA) that entered into force as part of the World

Trade Organization (WTO) agreements in 1995.81

Tariffs

Broadwoven fabrics are classified for tariff purposes under 220 subheadings of the

Harmonized Tariff Schedule of the United States (HTS), depending on such factors as fiber

content, yarn size and type, and fabric weight, finish, and weave.82 The rates of duty in effect

during 1999 ranged from a trade-weighted average of less than 1 percent ad valorem for silk

and linen fabrics to 9.0 percent for cotton fabrics, 15.2 percent for manmade-fiber fabrics, and

24.4 percent for wool fabrics.83 The trade-weighted rate of duty for all broadwoven fabrics

averaged 10.8 percent ad valorem in 1999, down from 12.4 percent in 1994. Under the URA,

the United States agreed to reduce tariffs on these fabrics by a trade-weighted 27 percent, to

an average duty rate of 8.7 percent ad valorem by 2004. The average tariffs for wool fabrics

(which have the highest tariffs among broadwoven fabrics) will be reduced from more than

36 percent ad valorem in 1994 to 25 percent ad valorem in 2004. 

Quotas

World trade in textiles and apparel had been largely governed by the terms of the 1974

Multifiber Arrangement (MFA), which permitted the use of quotas without compensation.84

On January 1, 1995, the Uruguay Round Agreement on Textiles and Clothing (ATC) entered
 

85 As products are integrated into the WTO regime, quotas on the integrated articles

automatically become void and no new quotas may be imposed upon such goods unless there has

been a determination of serious injury under GATT article XIX, the safeguards provision. See

U.S. House of Representatives, Committee on Ways and Means, Overview and Compilation of

U.S. Trade Statutes, 105th Cong., WMCP 105-4, p. 120.

 

86 The growth-on-growth provision applies to quota growth rates specified in the bilateral

MFA agreements in place on Dec. 31, 1994. The base rates by which the quotas could grow

annually vary by country and product, but usually ranged from less than 1 percent to 6 percent;

some countries had base rates of 7 percent. Assuming a base rate of 6 percent for a major

supplier, the quota would be increased by 6.96 percent a year in stage one (1995-97), 8.7 percent

a year in stage two (1998-2001), and 11.05 percent a year in stage three (2002-04).

41

into force as part of the WTO agreements and replaced the MFA. The ATC provides for the

elimination of the quotas and complete “integration” of textiles and apparel into the WTO

regime (i.e., subject to the same rules as trade in other sectors) over a 10-year transition period

ending on January 1, 2005. All WTO countries are subject to ATC disciplines, and only WTO

countries are eligible for ATC benefits, including quota elimination. The WTO countries with

import quotas to phase out under the ATC are the United States, EU, Canada, and Norway.

The phaseout of quotas under the ATC involves (1) the integration of products into the WTO

regime, including the removal of quotas on those goods,85 and (2) the acceleration of growth

rates for expanding quotas still in place during the transition period on goods not yet

integrated into the WTO regime (the “growth-on-growth” provision). The ATC required WTO

members to integrate at least 16 percent of their textile and apparel trade into the WTO regime

on January 1, 1995, and an additional 17 percent on January 1, 1998 (based on their

respective 1990 import volumes). The countries are to integrate at least another 18 percent

of the trade in 2002 and the remainder on January 1, 2005. Table 9 shows the schedule of

integration for broadwoven fabrics. The growth-on-growth provision required importing

countries to increase existing quota growth rates for major supplying countries by 16 percent

in 1995 and by an additional 25 percent in 1998; it requires them to increase the growth rates

by another 27 percent in 2002.86 For small suppliers (i.e., countries accounting for 1.2

percent or less of an importing country’s total quotas in 1991), quota growth rates were

accelerated by one stage–that is, they were increased by 25 percent in 1995 and by 27 percent

in 1998. 

During the 10-year transition period, the ATC also allows WTO members to set new quotas

on imports of articles not yet integrated into the WTO regime by applying a “transitional

safeguard” when imports cause or threaten serious damage to a domestic industry. These

quotas may remain in place for up to 3 years during the transition period or until the item is

integrated into the WTO regime. The United States did not initiate any safeguard actions

under the ATC for broadwoven fabrics during 1995-99.
 

87 The agreement incorporates the text of an agreement contained in a Memorandum of

Understanding (MOU) between the United States and China of February 1, 1997, which provides

that should China become a member of the WTO, the United States would grant China the same

benefits on the same schedule accorded other WTO textile-exporting countries under the ATC.

42

Table 9

Broadwoven fabrics: Schedule of integration into the WTO

Integration phase Date of integration Description of fabrics integrated in each phase 

Phase 1 ............ January 1, 1995 •Hand-loomed cotton fabric

•Silk fabric

•Coarse animal hair fabric

•Fabric of jute or other bast fibers 

•Fabric of paper yarn 

Phase 2 ............ January 1, 1998 •Fabric of metallized yarn

Phase 3 ............ January 1, 2002 •Fabrics of other vegetable fibers (including linen fabric)

•Silk-blended fabric

•Glass fiber fabric

•Typewriter ribbon fabric

Phase 4 ............ January 1, 2005 •All remaining broadwoven fabrics (e.g., most cotton, wool,

 and manmade fiber fabrics)

Source: Committee for the Implementation of Textile Agreements (chaired by the U.S. Department of Commerce),

First Integration of Textile and Apparel Products into GATT 1994 and Final List of Products for Second, Third, and

Final Phase Integration of Textile and Apparel Products into GATT 1994, found at Internet address

http://otexa.ita.doc.gov/fedreg/, retrieved Oct. 12, 1999.

In 1999, the United States had import quotas on broadwoven fabrics from 25 countries, which

together accounted for 59 percent of the total value of MFA-covered broadwoven fabric

imports. Of these quota countries, 22 are WTO members for which the United States is

phasing out quotas, under either NAFTA (Mexico) or the ATC. The three non-WTO countries

subject to U.S. quotas, China, Taiwan, and Belarus, are ineligible for quota liberalization

under the ATC. In November 1999, the United States signed a market access agreement with

China which, should China accede to the WTO, obligates the United States to phase out

quotas on imports of Chinese textiles and apparel as of January 1, 2005, the same date as that

for other WTO members.87 However, the agreement allows the United States to apply selective

safeguards (quotas) on imports of such goods for four additional years beyond the termination

of textile quotas for WTO members–that is, from January 1, 2005 to December 31, 2008. The

agreement also states that no safeguards established during the 4-year period will remain in

effect beyond 1 year, without re-application, unless both countries agree.

Broadwoven fabrics are reported for quota purposes in 31 textile categories, depending on

fiber content and fabric type. Although no country is subject to quota under each of the

categories (e.g., China was subject to quotas in 14 categories in 1999), some countries,

including two of the largest suppliers, China and India, are subject to group quotas that cover

a wide range of goods, including fabrics. Table 10 shows the quota levels and fill rates by

supplier country for broadwoven fabrics of cotton (category 313, cotton printcloth), manmade

fiber (category 620, other synthetic filament fabric) and wool (category 410, woven wool
 

88 Committee for the Implementation of Textile Agreements, “Settlement of a Call and

Establishment of an Import Limit for Certain Man-Made Fiber Textile Products Produced or

Manufactured in Belarus,” Federal Register (65 F.R. 15315), Mar. 22, 2000, p. 15315.

 

89 NAFTA trade preferences apply to goods that “originate” in the United States, Canada, and

Mexico–that is, the goods meet the NAFTA rules of origin to be eligible for tariff preferences.

For most broadwoven fabrics, the NAFTA origin rule is a “yarn forward” rule, whereby the

fabrics must be made in a NAFTA country from the yarn-formation stage forward to receive the

tariff preferences. For some fabrics, a fiber forward rule applies.

 

90 The phaseout of tariffs on trade between the United States and Canada began in 1989, when

the United States-Canada Free-Trade Agreement (CFTA) entered into force. With the

implementation of NAFTA in 1994, the CFTA was suspended and its duty phaseout schedule

was incorporated into NAFTA.

43

fabric), which accounted for the largest volume of broadwoven fabric imports in 1999 within

their respective fiber classifications. As shown in table 10, the quota levels vary considerably

by type of fabric, and by country. 

The United States initiated one request for consultations with a foreign supplying country

during 1994-99 for the purpose of establishing a quota on certain broadwoven fabrics. In

1999, the United States requested consultations under the authority of section 204 of the

Agricultural Act of 1956 with Belarus, a non-WTO country, for the purpose of establishing

a quota on U.S. imports of glass fiber fabric (textile category 622) from that country. An

agreement was reached in February 2000, which limits U.S. imports of glass fabrics from

Belarus at an annual level of 11.5 million square meters for the year 2000.88 In addition, the

parties agreed to a sublimit of 1,000,0000 square meters on glass fabric weighing 185 grams

or less. U.S. imports of glass fabrics from Belarus reached 13.4 million square meters in

1999, up from 1.8 million square meters in 1998.

NAFTA and Other Preferential Trade Programs

NAFTA entered into force on January 1, 1994, and provided for the elimination of duties on

“originating” goods traded among the United States, Canada, and Mexico.89 As of January

1, 1998, the United States and Canada phased out all tariffs on bilateral trade in originating

textile articles.90 For Mexico, U.S. tariffs on most originating fabrics were phased out as of

January 1, 1999; the remainder will be phased out in 2003. The United States eliminated

quotas on all originating textile articles from Mexico upon implementation of NAFTA, and

will eliminate quotas on “nonoriginating” goods (goods that do not meet NAFTA origin rules)

as of January 1, 2004.
44

Table 10

U.S. import quotas and fill rates on selected textile categories, 1999 

Country

Category 313-Cotton printcloth

Category 620-Other

synthetic filament

fabric

Category 410-Woven

wool fabric

Quota Fill rate Quota Fill rate Quota Fill rate

Square

 meters Percent

Square

meters Percent

Square

meters Percent

Brazil ............... 27,894,932 2.4 (

1

) (

1

) 2,735,601 27.2

Bulgaria ............. (

1

) (

1

) (

1

) (

1

) 850,058 2.5

China ............... 137,772,168 94.3 (

2

) 1,078,970 373.3

Colombia ............ 25,919,294 0.1 (

1

) (

1

) (

1

) (

1

)

Czech Republic ....... (

1

) (

1

) (

1

) (

1

) 1,616,155 6.3

Egypt ............... 32,844,943 0 (

1

) (

1

) (

1

) (

1

)

Hong Kong .......... 10,469,698 3.0 (

1

) (

1

) (

1

) (

1

)

Hungary ............. (

1

) (

1

) (

1

) (

1

) 950,751 0

India ............... 14,508,208 46.1 (

1

) (

1

) (

1

) (

1

)

Indonesia ............ 29,512,104 61.1 410,472,294 76.1 (

2

) (

1

)

Korea .............. 18,670,186 248.2 4104,534,26

5

291.1 3,603,292 263.7

Macau .............. 3,927,934 0 (

1

) (

1

) (

1

) (

1

)

Malaysia ............ 37,384,140 14.7 7,467,484 91.5 (

2

) (

1

)

Mexico5............. 6,966,904 0 (

1

) (

1

) 397,160 16.4

Pakistan ............ 87,320,778 50.8 (

1

) (

1

) (

1

) (

1

)

Poland .............. (

1

) (

1

) (

1

) (

1

) 2,731,797 1.5

Romania ............ 3,575,141 0 (

1

) (

1

) 99,740 8.3

Slovak Republic ....... (

1

) (

1

) (

1

) (

1

) 422,051 1.6

Taiwan ............. 21,741,546 (

6

)(2)

415,490,147 292.4 (2

) (

1

)

Thailand ............ 34,440,612 77.8 7,899,539 87.7 (

1

) (

1

)

Turkey .............. 47,739,262 0.5 (

1

) (

1

) 885,669 75.4

United Arab Emirates ...

70 0 (1

) (

1

) (

1

) (

1

)

Uruguay ............. (

1

) (

1

) (

1

) (

1

) 2,950,531 27.8

1

 No quota in effect.

2

 Imports under this textile category were subject to a group quota that was 90 percent or more filled in 1999.

3

 A sublimit on category 410-B, wool fabric made with combed wool (worsted wool fabric) was more than 90

percent filled in 1999.

4

 Represents quota for merged categories 619/620, polyester filament fabric and other synthetic filament fabric.

5

 The quota for imports from Mexico is a designated consultation level and applies to imports from Mexico of

non-originating textile goods. 

6

 Less than 0.5 percent.

7

 The quota was agreed to as part of a bilateral agreement between the United States and the UAE in an effort to

prevent transshipments of this product from a third country through the UAE to the United States. The UAE

reportedly does not produce this fabric.

Note.–The quota shown reflects the quota level in place as of December 31, 1999, as reported by the U.S. Customs

Service. The quota may have been increased or decreased from the original level to accommodate requests for

flexibility from the supplying country.

Source: Compiled from data in “U.S. Customs Service Textiles Status Report” for 1999, found at Internet address

http://www.customs.ustreas.gov/quotas/1999/trtxtrpt.htm, retrieved Feb. 17, 2000.
 

91 The U.S. Congress is expected to begin consideration of implementing legislation for the

agreement in the 107th Congress, beginning in 2001. 

 

92 As noted earlier, the United States will eliminate quotas on textiles and apparel from all

WTO countries as of January 1, 2005. Imports of textiles and apparel from non-WTO countries

will continue to be subject to control under section 204 of the Agricultural Act of 1956. 

45

The United States also has a free-trade agreement with Israel and, on October 24, 2000,

signed one with Jordan. Under the 1985 United States-Israel Free-Trade Area Agreement, the

two countries phased out all tariffs and quotas on eligible bilateral trade in textile and other

industrial products over a 10-year period. U.S. imports of broadwoven fabrics under the

agreement were valued at $30 million in 1999, accounting for 0.8 percent of total broadwoven

fabric imports. Under the agreement with Jordan, which is scheduled to enter into force 2

months after both parties exchange written notification that they have completed the necessary

domestic legal procedures for implementing the agreement,91 the two countries will eliminate

duties on eligible trade between them over a 10-year period. The United States agreed to phase

out tariffs on most broadwoven fabrics over 5 years; tariffs on most wool fabrics will be

phased out over a 10-year period. U.S. imports of broadwoven fabrics from Jordan totaled

just $43,000 in 1999. 

U.S. imports of most textile articles are ineligible for duty-free entry under the Generalized

System of Preferences (GSP), the Caribbean Basin Economic Recovery Act (CBERA), and

Andean Trade Preference Act (ATPA), except as provided by the Trade and Development Act

of 2000 (see below). U.S. imports of broadwoven fabrics under these programs, consisting

mostly of silk fabrics, totaled $21 million in 1999, or 0.6 percent of total U.S. broadwoven

fabric imports.

Trade and Development Act of 2000

In May 2000, the President signed into law the Trade and Development Act of 2000, which

provides for expanded trade benefits for 48 eligible countries in sub-Saharan Africa (SSA)

under Title I, the African Growth and Opportunity Act, and 24 CBERA beneficiary countries

under Title II, the United States-Caribbean Basin Trade Partnership Act. Among the trade

benefits in the legislation is preferential treatment for qualifying apparel made in SSA and

CBERA beneficiaries countries from U.S. fabrics and yarns. The legislation also suspends or

reduces U.S. tariffs on imports of worsted wool fabrics and their inputs, and changes the rules

of origin for certain textile articles. The key textile and apparel provisions are summarized

below.

African Growth and Opportunity Act 

The African Growth and Opportunity Act (AGOA) authorizes unlimited duty-free treatment

to imports of apparel made in SSA countries from fabrics produced in the United States of

U.S. yarns, eliminates existing U.S. quotas on imports of textiles and apparel from SSA

countries, and allows imports of such goods from all SSA countries to enter free of quota

during the 8-year period beginning October 1, 2000.92 The only SSA countries subject to such

quotas in 2000 were Kenya and Mauritius; however, there were no quotas on
 

93 The AGOA defines a lesser developed SSA country as one that had a per capita gross

national product of less than $1,500 in 1998, as measured by the World Bank. All but six SSA

countries (Botswana, Gabon, Mauritius, Namibia, Seychelles, and South Africa) meet the

definition of a lesser developed country.

 

94 For example, see ATMI presentation, “American Mill’s Prospects in the CBI,” found at

Internet site http://www.atmi.org/newsroom/bestbets.asp, retrieved Oct. 31, 2000. 

46

broadwoven fabrics. The AGOA also provides for preferential treatment for a specified

amount of imports of SSA apparel made from fabrics that are produced in SSA countries of

U.S. or SSA yarns (regional fabrics). A special rule also allows apparel entered under this cap

from “lesser developed” SSA countries to be made of third-country fabrics (other than U.S.

or SSA fabrics) for the first 4 years, through September 30, 2004.93

United States-Caribbean Basin Trade Partnership Act

The United States-Caribbean Basin Trade Partnership Act allows imports of qualifying

apparel from CBERA beneficiary countries to enter free of duty and quota for 8 years, from

October 1, 2000, through September 30, 2008, or if earlier the date on which a Free-Trade

Area of the Americas enters into force. The Act authorizes preferential treatment essentially

equivalent to that provided under NAFTA for similar goods from Mexico, which competes

with CBERA countries for apparel assembly work from U.S. firms; however, full NAFTA

parity has not been proclaimed to date. The Act authorizes unlimited preferential treatment

to apparel assembled in CBERA countries from fabrics made in the United States of U.S.

yarns. Unlimited preferential treatment is also available for textile luggage assembled in these

countries from such U.S. fabrics. The U.S. textile industry expects that the trade benefits will

encourage a shift in sourcing away from Asian countries to CBERA countries and, in turn,

will result in increased U.S. fabric export sales.94

Rules of Origin

Section 405 of the Trade and Development Act of 2000 changes the rules of origin for certain

dyed and printed fabrics and “flat goods” (e.g., bed sheets and scarves). Under the rules of

origin that were implemented on July 1, 1996, as required by section 334 of the Uruguay

Round Agreements Act, the country of origin for fabrics and flat goods is the country in which

the base fabric was made, regardless of any further finishing operations performed in other

countries. For non-wool fabrics and flat goods made from non-wool and non-cotton fabrics

(containing less than 16 percent by weight of cotton), the legislation restores the rules of origin

in effect before July 1996, which permitted the processes of dyeing and printing to confer

origin, when accompanied by two or more finishing operations.

The Clinton administration requested the rules change to implement the terms of an August

1999 agreement with the EU settling a dispute over the section 334 rules. In May 1997, the

EU had filed a request with the WTO for consultations with the United States, claiming that

the rules adversely affected its exports of dyed and printed fabrics and flat goods to the U.S.

market. The EU stated that as a result of the U.S. rules change, its exports of these articles

had lost their quota-free access to the U.S. market, and EU exporters had to comply with any

U.S. quota or visa requirements applicable to the country of origin of the base fabric. In
 

95 Also in response to EU concerns about the section 334 rules, statistical provisions were

created in the HTS in 1999 for “discharge printed fabrics” in order to facilitate the exemption of

the fabrics from visa and quota requirements applicable to selected countries in which the base

fabric was made.

 

96 NAFTA contains a tariff preference level that permits specified amounts of wool apparel

from Canada to enter the United States free of duty even though the garments do not meet the

NAFTA rules of origin (e.g., the suits are made of European fabric). See additional U.S. note 3 to

section XI of the HTS.

 

97 In 1999, the fabrics were classifiable in HTS subheadings 5112.11.20 and 5112.19.90.

 

98 The 19.3-percent ad valorem rate will be subject to the same staged duty reductions as those

agreed to by the United States in the Uruguay Round of multilateral trade negotiations for men’s

and boys’ wool suit-type jackets (HTS subheading 6203.31.00). The tariff on these items will be

reduced to 18.8 percent in 2001, 18.4 percent in 2002, and 18 percent in 2003 (the last year of

the temporary duty reductions for the fabrics). 

 

99 The President is authorized to reduce the 6-percent ad valorem rate, as necessary, to

equalize the rate with that of Canada.

 

100 The duty reductions temporarily eliminate the “tariff inversion” that exists for the fabrics,

(continued...)

47

addition, EU silk accessories such as scarves had to be marked as a product of the country in

which the base fabric was formed (mainly China), rather than as a product of the EU country

in which the fabric was printed, dyed, and otherwise finished (e.g., Italy or France), as was

the usual case under the previous rules. On June 25, 1999, the President signed the

Miscellaneous Trade and Technical Corrections Act of 1999 (PL-106-36), which exempts silk

woven fabrics and scarves from country-of-origin marking requirements under section 304 of

the Tariff Act of 1930.95

Worsted Wool Fabrics

Title V of the Trade and Development Act of 2000 reduced U.S. tariffs on worsted wool

fabrics suitable for use in making men’s and boys’ tailored clothing for 3 years beginning on

January 1, 2001. The tariff changes are intended to improve the competitiveness of the U.S.

tailored clothing industry relative to its counterpart in Canada, whose lower fabric duties have

enabled the industry there to greatly expand its exports of men’s suits to the U.S. market

under NAFTA.96 Since implementation of the United States-Canada Free-Trade Agreement

in 1989, which was suspended in 1994 and its duty phaseout schedules incorporated into

NAFTA, U.S. imports of men’s and boys’ wool suits from Canada have grown sixfold, to 1.3

million suits valued at $157 million in 1999.

Title V created two tariff-rate quotas (TRQs) for the purpose of granting duty reductions on

worsted wool fabrics certified by the importer as suitable for use in making men’s or boys’

suits, suit-type jackets, and trousers.97 One TRQ permits 2.5 million square meters equivalent

(SMEs) of fabrics having average fiber diameters greater than 18.5 microns to enter each year

at 19.3 percent ad valorem, the same rate as that for men’s and boys’ suit-type jackets made

of worsted wool fabrics.98 The other TRQ allows 1.5 million SMEs of fabrics having average

fiber diameters of 18.5 microns or less (the lower the number, the finer the fabric) to enter

each year at 6 percent ad valorem, the same as Canada’s rate on the finer fabrics.99 Imports

in excess of the TRQ limits are subject to the normal trade relations rate (28.3 percent in

2001).100 Title V also suspended the tariffs for 3 years on certain fine grades of wool yarns,
 

100 (...continued)

where the tariff is higher on the fabric than on the finished garment made of such fabric.

 

101 The duty suspension applies to wool yarns under HTS subheading 5107.10.00 (normal

trade relations rate of 6.9 percent ad valorem in 2001) and to wool fibers and tops under headings

5101.11 - 5101.30, 5103.10, 5103.20, 5104.00, 5105.21, and 5105.29. Wool tops are used in the

manufacture of worsted yarn and are a loose, untwisted rope of fibers that have been combed to

straighten the fibers and remove the short fibers.

 

102 U.S. International Trade Commission, Likely Impact of Providing Quota-Free and DutyFree Entry to Textiles and Apparel from Sub-Saharan Africa (investigation No. 332-379),

USITC publication 3056, Sept. 1997.

 

103 The term “greige” means “grey” or unfinished fabric. 

 

104 U.S. International Trade Commission, Greige Polyester/Cotton Printcloth from China,

Investigation No. 731-TA-101 (Review), Apr. 1999.

 

105 64 F.R. 424661.

48

fibers, and tops (having average fiber diameters of 18.5 microns or less) for use in the

manufacture of the worsted wool fabrics.101

Title V authorizes the President to modify the TRQ limits in response to requests from U.S.

producers of men’s and boys’ worsted wool tailored clothing, subject to a review of U.S.

market conditions, but by not more than 1.0 million SMEs in any of the 3 years. Title V also

provides, among other things, for a partial refund of duties paid by specified U.S.

manufacturers on imports of the wool fabrics, yarns, fibers, and tops (without regard to

micron level) in each of the years 2000, 2001, and 2002.

U.S. Trade-Related Investigations

In January 1997, the House Committee on Ways and Means requested that the U.S.

International Trade Commission conduct a factfinding investigation under section 332 of the

Tariff Act of 1930 concerning the likely impact of providing quota-free and duty-free entry

to textiles and apparel from SSA countries.102 In its report to the Committee, the Commission

estimated that duty-free and quota-free entry for imports of textiles from SSA countries would

result in a negligible effect on U.S. textile shipments.

In February 1999, the Commission determined that the revocation of the antidumping order

issued in 1983 on U.S. imports of greige103 polyester/cotton printcloth from China would be

likely to lead to continuance or recurrence of material injury to the domestic industry in the

foreseeable time.104 The investigation was initiated as part of the “sunset” reviews required

by the Uruguay Round Agreements Act which requires the U.S. Department of Commerce

and the Commission to conduct independent reviews, no later than 5 years after an

antidumping or countervailing duty order is issued, to determine whether revoking the order

would be likely to lead to continuation or recurrence of dumping or subsidies (Commerce) and

of material injury (Commission) within a reasonably foreseeable time. Commerce continued

the antidumping order on the printcloth from China for another 5 years, effective as of April

26, 1999.105
 

106 Information in paragraph is from Carlos Moore, executive vice president, ATMI, interview

by USITC staff, Nov. 16, 1999.

 

107 For Mexico, most imports of broadwoven fabrics from the United States under NAFTA

became free of duty as of January 1, 1999; however, the duties on a few fabrics are still being

phased out. There are no duties on U.S. exports of qualifying fabrics to Canada under NAFTA.

49

U.S. Exports

Principal Markets and Export Levels

U.S. broadwoven fabric exports increased at an average annual rate of 7.5 percent during

1994-99 to $2.6 billion and accounted for 13 percent of domestic shipments in 1999, up from

9 percent in 1994. Mexico and Canada are the largest U.S. export markets for these fabrics,

largely resulting from NAFTA trade benefits. U.S. fabric exports to Mexico are believed to

be used mostly in the production of apparel for export to the United States. U.S. fabric

exports to Mexico grew by roughly 100 percent in 1999, or more than $620 million over the

1998 level. The substantial increase is believed to be a result of new apparel production in

Mexico for the U.S. and Latin American markets, as well as displacement of some U.S.

exports to Mexico of cut apparel pieces, which are classified as unfinished or unassembled

apparel for export purposes. U.S. exports of woven apparel to Mexico, which are believed to

consist mostly of cut apparel pieces, declined by 13 percent, or by $174 million in 1999. 

U.S. broadwoven fabric exports to CBERA countries, which are also used mostly in the

production of apparel for export to the United States, increased at an annual average rate of

12 percent during 1994-98, before declining by 32 percent in 1999, to $189 million. U.S.

exports of broadwoven fabrics to most other regions of the world declined during 1994-99.

Export expansion is a key element of the U.S. broadwoven fabric industry’s business

strategies to adjust to a shrinking domestic customer base, especially for apparel fabrics.106

The industry is looking in particular to establish a strong market presence in Mexican and

CBERA countries, for which they feel they have a competitive advantage. Proximity to these

countries, along with trade preferences under NAFTA and new trade legislation for CBERA

countries, is seen as bolstering U.S. fabric exports to those countries. 

Foreign Trade Measures

Detailed information is not readily available on all foreign trade barriers for U.S. broadwoven

fabrics. For the major U.S. export markets, Mexico and Canada, most products enter free of

duty under NAFTA and are not subject to quantitative restrictions.107 In general, EU tariff

rates on most wool and manmade fiber fabrics are lower than U.S. rates
 

108 For EU tariffs for the year 2000, see Commission Regulation (EC) No. 2204/1999 of 12

October 1999, amending Annex I to Council Regulation (EEC) No. 2658/87 on the tariff and

statistical nomenclature and on the Common Customs Tariff, Official Journal, No. L 278 (Oct.

25, 1999).

 

109 Office of the United States Trade Representative, “U.S. and India Reach Landmark

Agreement to Lift Longstanding Indian Import Restrictions,” press release 00-1, Jan. 10, 2000. 

 

110 Office of the United States Trade Representative, “United States and India Reach

Agreement on Textile Tariff Bindings,” press release 00-61, Sept. 15, 2000.

 

111 U.S. Department of State telegram No. 40894, “Textiles/China: Exchange of Notes,”

(continued...)

50

for comparable products (table 11).108 EU tariffs for most cotton fabrics are 8.8 percent ad

valorem, which is comparable to a 1999 trade-weighted average duty of 9 percent ad valorem

for U.S. imports of cotton fabrics.

Table 11

EU and U.S. tariff rates for imports of selected broadwoven fabrics, 2000

Percent ad valorem

Product EU tariff rate U.S. tariff rate

Worsted wool fabric typically used in men’s suits ................. 11.2 29.4

Cotton blue denim fabric ................................... 8.8 8.6

Manmade-fiber sheeting fabric used in apparel and home textiles .... 9.2 15.7

Source: Harmonized Tariff Schedule of the United States, 2000, and the European Union, Commission Regulation (EC)

No. 2204/1999 of 12 October 1999, amending Annex I to Council Regulation (EEC) No. 2658/87 on the tariff and

statistical nomenclature and on the Common Customs Tariff, Official Journal, No. L 278 (Oct. 25, 1999).

In general, the ATC required WTO countries to reduce trade barriers on textiles in their home

markets. It called on countries to cut and bind their tariffs, reduce or eliminate nontariff

barriers, and facilitate customs, administrative, and licensing procedures. In this regard, the

United States reached market access agreements with China and India which, as the world’s

most populous countries, offer the U.S. broadwoven fabric industry opportunities to establish

and expand exports.

In November 1999, the United States and India reached an agreement whereby India would

lift import bans and import licensing requirements on a large number of products, including

textiles. The agreement came after the United States successfully challenged India’s

restrictions in the WTO.109 In September 2000, the United States and India reached an

agreement that establishes legally binding tariff ceilings on a wide range of textiles and

apparel items for imports into India. The agreement fulfills several of India’s market opening

commitments made under a 1994 agreement, in which the United States and India agreed to

reciprocal market access commitments in anticipation of the WTO Agreement on Textiles and

Clothing.110

In 1997, the United States and China concluded a Memorandum of Understanding (MOU),

whereby “the United States obtained significant market opening commitments from China for

export of U.S. manufactured apparel and textile products.”111 In January 1999, China reduced
 

111 (...continued)

Washington, DC, Mar. 5, 1997.

 

112 U.S. Department of State telegrams No. 321, “China Cuts Tariffs on 1,014 Products,” Jan.

12, 2000, and No. 530, “More on Tariff Cuts,” Jan. 19, 2000, both prepared by U.S. Embassy,

Beijing.

 

113 For more information on China’s NTBs, see USITC, Assessment of the Economic Effects

on the United States of China’s Accession to the WTO (investigation No. 332-403), USITC

publication 3229, Sept. 1999.

 

114 ITMF is a Switzerland-based group whose members include trade associations in many

countries representing producers of textile articles and of textile machinery. ITMF conducts

textile-related industry surveys, among other things. The Commission compiled individual

country data for Asia, which includes Bangladesh, Burma, China, Hong Kong, India, Indonesia,

Japan, Korea, Malaysia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand,

and Vietnam.

 

115 Shuttleless looms generally are much more efficient than shuttle looms; one industry

observer assumed that one shuttleless loom equals three shuttle looms for purposes of estimating

broadwoven fabric production capacity. See Robin Anson, Managing Editor, “World Capacities

and Shipments of Textile Machinery,” Textile Outlook International (Cheshire, United

Kingdom: Textiles Intelligence Ltd.), July 2000, p. 94.

 

116 The cotton system refers to a process originally used for spinning cotton fiber into yarn,

and now also used for making spun yarns of manmade fibers (staple fiber) and blends of cotton

and manmade fibers. Filament weaving looms are used for weaving filament yarn (fiber of

indefinite length) of manmade fibers or silk.

51

the tariff rates on a large number of textile products, including fabrics. The tariff rates for

most cotton fabrics ranged from 18 to 22 percent ad valorem, though a few fabrics had tariffs

as low as 12 percent ad valorem. Wool fabrics were subject to a rate of 28 percent ad

valorem, and most manmade fiber fabrics had tariff rates ranging from 31 to 34 percent ad

valorem.112 China still maintains a number of nontariff trade barriers (NTBs), which affect

all industries, including textiles.113

FOREIGN INDUSTRY PROFILE

The world broadwoven-fabric industry has been undergoing significant restructuring and

modernization as a result of the introduction of advanced weaving technology and keen

competition in global markets. Asia is believed to be the world’s largest producer and exporter

of broadwoven fabrics, and it accounted for most of the new investments in looms during the

1990s. Other major producers are the EU and the NAFTA countries (United States, Mexico,

and Canada). With the ongoing phaseout of textile and apparel quotas under the WTO

scheduled to be completed by 2005, producers of broadwoven fabrics in developed and

developing countries are likely to undergo further restructuring and upgrading in an effort to

ensure their competitive position in markets both at home and abroad. 

According to data of the International Textile Manufacturers Federation (ITMF) for 1998,114

Asia accounted for 30 percent of the shuttleless looms and 95 percent of the shuttle looms115

for weaving fabrics from yarns spun on the “cotton system,” 96 percent of the filament

weaving looms, and 39 percent of the wool weaving looms (table 12).116 Asia was also the
 

117 The seven countries are Brazil, India, Indonesia, Italy, Korea, Turkey, and the United

States, all of which are ITMF members that actively participate in international textile trade as

exporters and/or importers.

 

118 According to data of Virginia-based Werner International, Inc., “Hourly Labor Cost in the

Textile Industry,” Spring 1998, hourly labor costs (including social benefits and fringes) in the

textile industry for 1998 averaged $0.60 for India, $0.24 for Indonesia, $15.81 for Italy, $3.63 for

Korea, and $12.97 for the United States. 

52

Table 12

Installed weaving capacity in 1998 and loom shipments during 1990-99, by selected regions and 

countries

Country/region

Installed capacity, 1998

Cotton system Filament Shipments, 1990-99

weaving

looms

Wool

weaving

looms

Shuttleless

looms

Shuttle

looms

Shuttleless

looms

Shuttle

looms

World ................ 674,690 2,950,540 1,253,830 138,920 489,001 105,398

 Asia1............... 205,460 2,793,030 1,207,740 54,470 289,822 101,705

China ............ 45,800 687,500 196,440 31,050 90,719 48,476

 India2............ 10,750 1,513,320 701,500 7,600 7,646 16,466

 United States3........ 58,600 4,630 - 1,440 26,464 41

 Mexico .............. 14,500 35,000 - 1,150 6,163 51

 Canada3............ 3,000 - - 350 887 -

 EU-15 .............. 58,690 10,230 21,210 33,710 61,984 81

 Other ............... 334,440 107,650 24,880 - 103,681 3,520

1

 In addition, Bangladesh had 25,000 powerlooms in the non-mill sector and 500,000 handlooms in the handloom

sector. Pakistan had 200,000 powerlooms in the non-mill sector and 80,000 handlooms in the handloom sector.

2

 In addition, India has about 3.9 million handlooms in the handloom sector.

3

 Data for the United States and Canada include filament weaving.

Note.–World and Asia data were estimated by the Commission based on ITMF data.

Source: International Textile Manufacturers Federation, International Textile Machinery Shipment Statistics, 1999,

and prior issues.

largest buyer of shuttleless looms during 1990-99, accounting for 59 percent of world

shipments. The EU accounted for 9 percent of the cotton-system shuttleless looms in place in

1998 and the NAFTA countries 12 percent (NAFTA data also include filament weaving

looms). Russia and the former Soviet Republics, along with Eastern Europe, accounted for

one-third of the cotton-system shuttleless looms in place. 

Asia accounted for about 48 percent of world exports of broadwoven fabrics in 1998, or $26

billion (table 13). The EU supplied 44 percent, or $24 billion. The NAFTA countries supplied

6 percent of the world exports, or $3 billion; the United States alone accounted for almost 5

percent of the world total. The relative importance of Asia in the production and export of

broadwoven fabrics largely reflects its low operating costs, particularly labor costs. According

to ITMF data on production costs for seven countries,117 total manufacturing costs for

weaving broadwoven fabrics of spun yarn (ring and open-end) was lowest in Indonesia,

Brazil, and India and highest in the United States and Italy (figure 6). Most of the overall cost

differential stemmed from the labor cost component, which was much higher for the United

States and Italy than for the other five countries in the study.118
 

119 Estimated by the Commission based on data of the United Nations, Industrial Commodity

Statistics Yearbook, 1996; OECD, PR China: Textile and Clothing Sector and its Export

Potential, June 1999, p. 70; and the Government of India, Ministry of Textiles, “Annual Report

1999-2000,” found at Internet address http://texmin.nic.in/annualrep/arch03.htm, retrieved Mar.

8, 2000. 

53

Table 13

Broadwoven fabrics: World exports by principal sources and selected country-group suppliers, 

1994-98

Million dollars

Country 1994 1995 1996 1997 1998

Italy ........................................ 6,307 7,299 7,232 7,003 7,135

China ....................................... 5,963 7,024 5,872 6,638 6,201

Korea ..................................... 6,717 7,508 7,256 6,863 5,361

Germany ................................... 5,377 5,987 5,412 5,051 5,121

Taiwan ..................................... 3,099 3,451 3,607 3,500 3,680

France ...................................... 2,879 3,444 3,369 3,270 3,423

Japan ...................................... 3,881 4,051 4,024 3,879 3,297

United States ................................. 1,887 2,043 2,232 2,408 2,448

Belgium and Luxembourg ....................... 1,733 2,013 2,058 2,223 2,302

Pakistan .................................... 1,617 1,576 1,923 1,877 1,899

United Kingdom ............................... 1,469 1,642 1,710 1,760 1,697

India ....................................... 1,471 1,582 1,650 1,618 1,511

Spain ....................................... 685 945 1,063 1,154 1,282

Indonesia .................................... 1,436 1,505 1,504 1,160 1,202

Turkey ...................................... 710 984 947 1,075 1,137

Other ....................................... 9,013 10,428 11,017 10,682 10,272

World total ................................. 51,500 58,400 57,100 56,150 53,850

Selected country groups:

NAFTA ..................................... 2,393 2,723 3,007 3,279 3,353

Asia ........................................ 27,300 29,925 29,400 28,550 25,750

EU-15 ...................................... 21,043 24,418 23,779 23,276 23,890

Source: Compiled from unpublished data of the United Nations (U.N.) for Standard International Trade

Classification (SITC) subgroups 652, 653, and 654; data for selected countries estimated by the Commission based

on unpublished U.N. data for SITC 65 and Harmonized System headings 5007, 5111-5112, 5208-5212, 5309-5311,

5407-5408, 5512-5515, 5801, 5803, and 5809. Data for world total partly estimated by the Commission. 

The United States had a comparative cost advantage compared with India in terms of capital

and power costs. For the same reasons, the cost of weaving fabric in Korea was less than that

for India, even though Korea’s labor costs were several times larger than those for India. 

The remainder of this section provides a brief overview of the textile (including fabric)

industries in China and India, the largest producers of broadwoven fabrics estimated to

account for slightly more than one-halfof global production by quantity;119 the EU, a major

producer of value-added fabrics; and Mexico, the only NAFTA country to experience growth

in weaving capacity during the past half decade. 
 

120 Information in paragraph is mainly from U.S. Department of State telegram No. 2711,

“SOE Reform: China Textile Industry Leads the Way!?” Mar. 24, 2000. For further information

on China’s textile industry, see USITC, Assessment of the Economic Effects on the United States

of China’s Accession to the WTO (investigation No. 332-403), USITC publication 3229, Sept.

1999, ch. 8.

54

Figure 6

Broadwoven fabric production costs for selected countries, 1999

Source: International Textile Manufacturers Federation, International Production Cost Comparison, 1999

China

China’s textile industry has been undergoing extensive restructuring since 1998, when the

Government of China began a 3-year plan to improve operations of the state-owned

enterprises (SOEs), many of which had been incurring losses since 1993.120 Under the plan
 

121 Ibid.

 

122 See, for example, “China, Hit By Crisis,” Textile Asia (Hong Kong: Business Press Ltd.),

Aug. 1999, p. 83.

 

123 Unless otherwise noted, information in paragraph is from U.S. Department of State

telegrams No. 2711, “SOE Reform: China Textile Industry Leads the Way!?” and No. 2716,

“China/Textiles: WTO’s Challenges and Opportunities,” both dated Mar. 24, 2000.

 

124 Based on data from Source World Trade Atlas® - Canada Edition, a product of Statistics

Canada and Global Trade Information Services, Inc. Copyright 1993, 2000, Global Trade

Information Services, Inc. 

55

for the SOEs, which dominate the textile industry, unprofitable SOEs were closed or allowed

to go bankrupt, or merged with profitable SOEs. The Government established a $1.5 billion

reserve fund in 1998 to help write-off bad debt and reduce the impact of industry losses; it

reportedly replenished the fund by an unspecified amount in 1999. The Government also

called for the elimination of nearly one-fourth of the spindles in the cotton sector in an effort

to reduce yarn spinning capacity and to increase yarn quality. 

The restructuring has led to the elimination of nearly 1.2 million jobs in China’s textile

industry, while its fabric production fell by almost 30 percent in 1999 from the 1998 level.

However, in 1999 the textile industry became profitable for the first time in 5 years. The

Government of China attributed the profit turnaround to many factors, including lower

production costs following the structural reform of the industry; deregulation of domestic

cotton prices, which subsequently fell sharply from their 1997 high; and increased

international and domestic demand for Chinese textiles and apparel.121

The Government of China continues to restructure and modernize the textile industry,

reportedly committing $2.4 billion in grants to its top 200 firms and another $1.7 billion in

loans for the next few years for technological upgrades. The Government has set

modernization goals for the entire textile supply chain, including having 50 percent of yarn

spinning capacity and 40 percent of fabric production capacity operating at advanced

international levels by 2005. The Government also seeks to have shuttleless looms make up

at least 25 percent of the total number of looms in place by 2005; they accounted for just 6

percent of the total in 1998. In the dyeing and finishing sector, a weak link in China’s textile

supply chain, the goal is to have 40 percent of the dyeing equipment meet advanced

international levels by 2005.122 By 2005, China’s goal is to have 80 percent of the country’s

apparel exports made with fabric produced domestically.123

China’s imports of broadwoven fabrics of $5.7 billion in 1999 were slightly less than its

exports of $5.8 billion. Its largest import sources are Japan, Taiwan, Korea, and Hong Kong,

which together accounted for more than 80 percent of China’s broadwoven fabric imports in

1999. Hong Kong is the largest export market, accounting for 34 percent of China’s

broadwoven fabric exports in 1999, followed by Korea, Bangladesh, and Japan, together

accounting for another 18 percent. The United States is the fifth-largest export market with

about 3 percent of the total.124
 

125 For detailed information on India’s textile industry, see USITC, India’s Textile and

Apparel Industry: Growth Potential and Trade and Investment Opportunities, Staff Research

Study No. 27, USITC publication 3401, Mar. 2001.

 

126 Based on data of the Government of India, Ministry of Textiles, “Annual Report 1999-

2000,” found at Internet address http://texmin.nic.in/annualrep/ar00_con.htm, and The Cotton

Textiles Export Promotion Council, Monthly Statistics, found at

http://www.texprocil.com/texprocil/monthly/t-2.htm#t2, both retrieved Oct. 3, 2000.

 

127 Government of India, Ministry of Textiles, “Annual Report 1999-2000.” 

 

128 Prodipto Roy, “Competitiveness of the Indian Textile Supply Chain,” Textile Outlook

International (United Kingdom: Textiles Intelligence Ltd.), Sept. 1999, p. 116.

 

129 Government of India, Ministry of Textiles, “Annual Report 1999-2000.”

 

130 Textile industry and trade association officials in Mumbai, Coimbatore, and New Delhi,

India, interviews by USITC staff, Jan. 31-Feb. 11, 2000. 

 

131 Government of India, Ministry of Textiles, “Annual Report 1999-2000.”

56

India

India is the world’s second-largest producer of broadwoven fabrics after China, but only the

12th largest exporter by value in 1998. India’s textile industry consists of the organized mill

sector and the “decentralized” powerloom and handloom sectors.125 The organized mill sector

comprises medium- to large-sized units that are either vertically integrated “composite mills”

that perform spinning, weaving, and finishing operations or mills that specialize in certain of

these operations. The organized mill sector accounted for about 5 percent of India’s fabric

production by quantity, but 30 percent of its exports of machine-made cotton fabrics.126

Capacity utilization in the organized mill sector is low, averaging only 51 percent in fiscal

year 1998 (the 12-month period beginning on April 1, 1998).127

The decentralized sectors generate 95 percent of India’s fabric production by quantity, with

the powerloom sector accounting for 73 percent of the total and the handloom sector 22

percent. These sectors comprise thousands of small fabric-weaving and processing (dyeing

and finishing) units, with a typical powerloom sector unit having 12 to 44 power-driven

shuttle looms and a handloom sector unit having 2 to 6 manually operated looms.128 Although

the decentralized sectors use technology that lags considerably behind that of the organized

mill sector, some powerloom weavers have invested in shuttleless looms.129 The decentralized

sectors, unlike the organized mill sector, benefit from favorable government policies, such as

exemptions from various taxes and labor regulations.130

India’s weaving capacity is huge in terms of the number of looms in place, but most of them

are outdated. High capital costs have discouraged new investment in the textile industry.

During the last 10 years, India received less than 2 percent of world shipments of new

shuttleless looms (see table 12). To upgrade the technological base in the textile industry, the

Government of India has established a special fund to give it access to capital at

internationally comparable interest rates.131 Indian textile firms are investing in new

technology and entering into joint ventures with foreign firms to obtain technical and

marketing assistance and expand and upgrade manufacturing operations and product quality.
 

132 Information on the EU textile and apparel industries is from Eurostat, Panorama of

European Business, 1999, pp. 145-146, and L’Observatoire Européen du Textile et de

L’Habillement (OETH), Brussels, The EU Textile and Clothing Sector 2000, May 2000, table 15,

and The EU Textile and Clothing Sector 1999, Apr. 1999, table 1. Data in euros converted at an

exchange rate of $1.066 per euro in 1999. See European Central Bank, Monthly Bulletin, June

2000, table 10, found at internet address http://www.ecb.int/pub/pdf/mb200007en.pdf, retrieved

Sept. 19, 2000.

 

133 Calculated by the Commission based on data in OETH, Benchmarking EU Export

Performance in Textiles and Clothing, Feb. 2000, p. 178. 

 

134 OETH, Benchmarking EU Export Performance in Textiles and Clothing, Feb. 2000, p. 87.

 

135 Data from Cámara Nacional de la Industria Textil (CANAINTEX), found at Internet

address http://www.canintex.org.mx//informac/textiles/textil4.html, retrieved Sept. 27, 2000. 

 

136 Data on hourly labor costs, including fringe benefits, from Werner International, Inc.,

“Hourly Labor Cost in the Textile Industry,” Spring 1998.

57

European Union

EU production of broadwoven fabrics fell by 11 percent during 1994-99 to $19 billion, which

is roughly equivalent to estimated U.S. shipments of broadwoven fabrics in 1999.132 Much of

the decline occurred in apparel fabrics, largely reflecting the growth in EU imports of finished

apparel products. The share of the EU broadwoven-fabric market accounted for by imports

rose from 27 percent in 1994 to 39 percent in 1999. Import market shares also rose from 34

to 46 percent for apparel and from 15 to 26 percent for home textiles during the period. As

imports of finished goods mainly from low-cost countries rose, prices of these goods fell,

putting further pressure on the EU broadwoven fabric industry. To maintain its competitive

position in the home market, the EU industry is focusing on developing innovative fabrics, and

brand and product design, and forming strategic alliances with suppliers and customers.

Despite the growth in EU imports of broadwoven fabrics during the 1990s, the EU maintains

a favorable balance of trade in these goods. In 1999, EU exports to non-EU countries of

nearly $11 billion were more than double imports. In 1997, the latest year for which detailed

data are readily available, the United States was the fifth-largest market for EU woven fabric

exports, after Tunisia, Poland, Morocco, and Romania, major outward processing sites for

EU textile firms.133 In general, EU exports of broadwoven fabrics to non-EU countries

compete less on price than on the kind of product, the quality, and the reliability of the

exporter.134

Mexico

The Mexican textile industry has grown significantly since the implementation of NAFTA in

1994, in large part to serve a rapidly growing apparel industry in Mexico. Industry

employment rose by 32 percent during 1995-98 to 175,730 workers.135 The industry consists

mostly of relatively small firms, with more than 85 percent of the roughly 2,900

establishments having less than 100 employees each in 1999. The national wage rate for

textile workers in Mexico in 1998 averaged $2.23 per hour, compared with an average of

$12.97 for U.S. textile workers.136
 

137 Based on data from Source World Trade Atlas® - Canada Edition, a product of Statistics

Canada and Global Trade Information Services, Inc. Copyright 1993, 2000, Global Trade

Information Services, Inc. 

 

138 U.S. Department of State, FY 2001 Country Commercial Guide: Mexico, p. 8.

 

139 “Mexico Weaves More Ties with the U.S.,” Wall Street Journal, Aug. 21, 2000, p. 7.

 

140 For more information on U.S. investment in Mexico, see USITC, Production Sharing: Use

of U.S. Components and Materials in Foreign Assembly Operations, 1995-1998 (investigation

No. 332-237), USITC publication 3265, Dec. 1998, pp. 3-22 through 3-27.

 

141 “News Briefs,” Pacific Trade Winds (Santa Barbara, CA: Pacific Trade Winds Co.), Jan.

2000, p. 3.

 

142 “Taiwan Textile Industry,” China External Trade Development Council, 1998, found at

Internet address http://www.tptaiwan.org.tw/tto/exitem/textex.htm, retrieved Oct. 2, 2000.

58

The United States is Mexico’s largest trading partner in broadwoven fabrics, accounting for

roughly three-fourths of both its imports of $1.4 billion and its exports of $510 million in

1999.137 Several U.S. broadwoven fabric producers have either established or are in the

process of investing in apparel fabric operations in Mexico in order to be closer to the apparel

markets that they supply. U.S. mills are also expected to use Mexico as a platform upon

which to export goods to countries and regions with which Mexico has free trade agreements.

Besides the NAFTA countries, Mexico has free-trade agreements with a number of Latin

American countries, signed a free-trade agreement with the EU in March 2000, and has

entered into free-trade negotiations with the European Free-Trade Association (Norway,

Switzerland, Iceland, and Liechtenstein) .138

Among the U.S. firms that have invested, or announced plans to invest, in broadwoven fabric

production in Mexico include Burlington Industries (denim and worsted wool fabrics), Cone

Mills (denim), Galey and Lord (denim), and Dan River, Inc. (apparel fabrics).139 Several U.S.

firms have invested in upstream and downstream production facilities, thereby effectively

vertically integrating their production in Mexico. For example, Burlington Industries has a

joint venture with Parkdale Mills to make ring-spun cotton yarn and a jeans sewing facility

in Mexico.140 Some Asian firms reportedly are also establishing or planning textile operations

in Mexico. According to a trade source, Worldbest, a state-owned textile firm in China,

recently announced that it is investing in a $96 million plant in Mexico to make cotton fabrics

for the North American market.141 Two Taiwan firms have reportedly invested in vertical

textile and apparel operations in Mexico, with one firm having spinning, weaving, cutting, and

sewing operations for the production of denim apparel, while the other firm announced plans

to set up operations to produce polyester staple fiber, yarn, fabric, and apparel.142
APPENDIX A

RECENT RESTRUCTURING AND

MODERNIZATION IN THE U.S.

BROADWOVEN FABRIC INDUSTRY

(Information in this appendix was compiled by the Commission as of July 2000.)
A-2

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY

Firm and products Foreign activity Recent restructuring and modernization

Avondale Inc.

Monroe, GA

Vertically integrated producer of

finished woven apparel fabrics (70

to 75 percent of net sales),

including indigo-dyed denim and

other fabrics, especially for jeans,

sportswear, outerwear, and

uniforms. Also makes and sells

yarns (7 percent of sales) for

apparel and home furnishing

fabrics, though in-house weaving

consumes most yarn output; grey

fabrics for apparel, home

furnishings, and industrial uses;

and specialty fabrics, such as

coated materials for awnings,

tents, boat covers, and life vests.

No information available. Restructured and modernized over the past

5 years to improve productivity, reduce unit

costs, lead times and inventory levels, and

maximize flexibility in responding to

customer needs. Acquired Graniteville

Co., an integrated producer of woven

fabrics for uniforms and other garments;

built a state-of-the-art integrated denim

weaving mill; in other plants, expanded or

modernized operations for producing yarn

and weaving, finishing and inspecting

fabric; installed systems for reclaiming

waste fibers and recovering chemicals

used in processing; and, commensurate

with consuming more of its yarn and grey

fabric output to improve capacity

utilization, consolidated facilities and

closed a yarn plant.

Burlington Industries, Inc.

Greensboro, NC

Vertically integrated producer of

finished or grey woven fabrics for

apparel (about 50 percent of net

sales), including outerwear,

uniforms, and athletic and

protective garments, and for home

furnishings (45 percent of sales),

including mattresses, draperies,

and upholstered furniture. Also

makes and sells such end-use

products as draperies, table

linens, tufted carpets and rugs,

and customer-specified garments.

In Mexico, operates five

plants producing carpet and

woven fabrics for apparel

and home furnishings and

two plants assembling

garments. Also has joint

venture plants abroad: one

for yarn production and

another for garment

processing in Mexico; and

one for denim fabric

production in India. Markets

products in Canada and

countries of Latin America,

Europe, and Asia. Exports,

of which about half go to

Canada and Mexico, provide

about 15 percent of

revenues.

Focused recent capital spending and

systems improvements on raising

productivity and quality, lowering costs,

and implementing production techniques

and electronic linkages with customers and

suppliers to reduce lead times and improve

service. Acquired majority interest in a

firm developing novel chemistry for fabric

applications. Currently restructuring to

modernize, focus on value-added products,

and reduce U.S. apparel fabric production

capacity by 25 percent: consolidated the

various apparel fabric business units into

two; disposed of a yarn division; and is

closing or selling several plants producing

fabrics.
A-3

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY–Continued

Firm and products Foreign activity Recent restructuring and modernization

Cone Mills Corp.

Greensboro, NC

Vertically integrated producer of

woven fabrics, primarily finished

denim and khaki (about 70

percent of net sales) for apparel

and jacquard fabrics for home

furnishings. Also dyes and prints

apparel and home furnishing

fabrics on commission (15

percent of sales) and functions as

a converter in designing and

distributing woven fabrics for

upholstery, draperies, and

bedspreads.

Has a joint-venture plant in

Mexico producing yarn and

denim marketed and

distributed by Cone. Has

announced plans to expand

production in Mexico with a

denim mill and with joint

ventures to develop and

operate a textile and apparel

industrial park and a yarn

mill. Has a sales office in

Brussels and sales agents in

Japan, Hong Kong, and

countries of Africa, Europe,

and Central and South

America. Exports represent

about 25 percent of sales

overall and 37 percent for

denim fabric.

Focused recent capital projects in such

areas as replacing all looms for weaving

denim to maintain modern, flexible

production facilities; modernizing rotary

screen printing plants to ensure customer

service and product quality; and expanding

capacity in jacquard fabric production. 

Sold several non-core businesses. To

lower costs and improve efficiency and

market responsiveness, has launched a

comprehensive downsizing and

reorganization program, with such facets

as merging the denim and sportswear

fabric businesses; ceasing production of

ring-spun yarn and of yarn-dyed and

chamois flannel shirting fabrics; and

reducing and reorganizing staffs in

manufacturing, sales, and administration.

Culp, Inc.

High Point, NC

Vertically integrated producer of

finished woven and tufted

upholstery fabrics (about 78

percent of net sales), including

printed and flock-coated fabrics,

for residential and commercial

furniture and other upholstered

products, such as baby car seats. 

Also produces finished ticking

fabric used in mattresses.

Has a plant in Canada

producing mattress ticking. 

Foreign markets accounted

for 23 percent of net sales in

1999 and 29 percent in

1998, accomplished through

international sales agents. 

Non-U.S. sales predominate

in North America, the Middle

East, Europe, the Far East,

and elsewhere in Asia. 

During the past 5 years, increased capacity

for weaving jacquard, dobby, and velvet

fabrics by acquiring Rossville/Chromatex,

Rayonese, and Phillips Mills, and improved

control of yarn supply and design by

acquiring Artee Industries. Enhanced

fabric design capability with a new design

center; improved efficiency, customer

service, and effectiveness of design

resources by reorganizing from six

business units to four divisions; augmented

efficiency, capacity, and product scope

through capital investments in production

facilities and machinery; and achieved

ISO-9002 certification in 6 of its 17 plants.
A-4

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY–Continued

Firm and products Foreign activity Recent restructuring and modernization

Dan River Inc. 

Danville, VA

Vertically integrated producer of

finished or grey woven fabrics

(about 25 percent of net sales) for

apparel, upholstery applications,

decorating, crafts, and home

sewing and of home textiles (70

percent of sales), such as sheets,

comforters, decorative pillows,

and draperies. Also manufactures

customer-specified yarns and

woven fabrics for high-pressure

hoses, conveyor belts, and other

industrial products.

During 2000, made

agreements with Grupo

Industrial Zaga, S.A. de C.V.

to build and operate two 

jointly owned plants in

Mexico expected to be fully

operational during 2000-01,

one for apparel fabric

production and the other for

apparel production. Has

agreed to purchase Import

Specialists, Inc., an importer

of home fashion products

primarily from China and

India. Exports represent

less than 6 percent of

apparel fabric sales and less

than 3 percent of home

textile product sales.

Restructured and modernized during the

past 5 years to increase capacity,

efficiency, and capacity utilization; reduce

costs and dependence on outside

manufacturers; improve service,

communication with customers, and

coordination of production schedules with

orders; and meet customers’ quick

response delivery requirements. Acquired

The New Cherokee Corp., a producer of

shirting and sportswear fabrics. Merged

with The Bibb Co., a supplier of home

fashion products. Has agreed to purchase

Wes Tek Inc., a producer of yarns and

fabrics for industrial applications. 

Achieved ISO-9001 certification in

engineered product facilities. 

Delta Woodside Industries, Inc.

Greenville, NC

Vertically integrated producer of

finished woven fabrics primarily

used in pants, blazers, and

uniforms, including civilian career

wear and battle dress camouflage

military uniforms. 

Sells and distributes fabric in

Canada and Mexico, along

with the United States,

through a marketing office in

New York City. Also has

sales agents operating in

Mexico.

Since 1997, restructured to discontinue or

reduce unprofitable or non-core businesses

and operations. Exited the knit fabric

business by liquidating Stevcoknit Fabrics

Co. and the fitness equipment business by

selling Nautilus International; and is

spinning off the Delta Apparel and the

Duck Head Apparel divisions. 

Discontinued sales of grey woven fabrics

to sell only the more profitable finished

fabrics; and downsized production of

synthetic-fiber fabrics. 
A-5

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY–Continued

Firm and products Foreign activity Recent restructuring and modernization

Galey & Lord, Inc. 

New York, NY

Vertically integrated producer of

finished apparel fabrics (about 90

percent of net sales), such as

denim, corduroy, flannel, and

sueded materials used in pants,

shorts, uniforms and other

garments, and of finished or grey

home furnishing fabrics (3 percent

of sales) used in bedspreads,

comforters, curtains and

upholstery applications. Also

cuts, sews, and finishes

garments.

Operates one apparel fabric

plant each in Canada and

Italy, seven apparel factories

in Mexico, and sales offices

in Asia, Europe, and South

America. Has joint venture

apparel fabric plants in

Tunisia and the Philippines

and has contracted for one

in Mexico. Its Swift Europe

business is a leading denim

supplier to Europe, Asia,

and North Africa; its

Klopman International

business is the leading panEuropean fabric supplier for

work and career apparel. 

Overall, non-U.S. sales

represent 20 to 25 percent of

net sales.

During 1994-99, acquired Burlington

Industries’ decorative prints division,

enabling entry into home furnishing fabric

production; Dimmit Industries and another

apparel factory, enabling the offering of

finished fabric and garment packages; and

Dominion Textiles’ apparel fabric business,

expanding international operations and

improving service to customers operating

abroad. Closed the printed apparel fabric

business; reduced garment style selection

to lower production inefficiencies due to

frequent style changes; and modernized to

reduce costs and improve flexibility in

producing a wide range of fabrics.

Johnston Industries, Inc.

Columbus, GA

Vertically integrated producer of

finished or grey woven or

nonwoven fabrics, such as denim

and other apparel fabrics,

upholstery face and backing

fabrics, mattress ticking and filler

cloth, hosing, and coated filtration

fabric. Also makes and sells

multi-axial and composite

reinforced fabrics used in

reinforced products and

structures, such as skis, baseball

bats, roof panels, oil well

platforms, sea walls, and utility

poles; and yarns, fiber batts, wiper

cloths, towels, and sheets made

from reprocessed waste fibers

and off-quality fabrics. Home

furnishing products account for 51

percent of sales; automotive and

industrial products, 27 percent;

and yarn, recycled fibers, and

composite reinforced fabrics, 17

percent. 

Employs a sales force to

market outside the United

States, mainly in Europe,

Canada, and Mexico. 

Towels and sheets made

from reprocessed waste

fiber and off-quality fabric

are sold mainly in Africa. In

1999, foreign direct sales

represented about 6 percent

of total sales. Also,

customers often resell

fabrics in foreign markets,

either in original form or as

product components; for

example, eastern Europe

has been an important

market for resold upholstery

substrate fabric bought from

Johnston.

Modernized in the last few years by

investing in state-of-the-art, vertically

integrated, flexible, low-cost manufacturing

capabilities. In 1997, began major

restructuring with such components as

reduction of centralized management and

re-assignment of operational and sales

management to the separate business

units; cost reduction by consolidating or

selling unprofitable non-core operations

and redesigning products to simplify

production processes; improvement of

information management with an

integrated system for procurement,

inventory, marketing management, and

customer orders; and improvement of

product line management for greater

profitability by exiting product lines and

other means. In 2000, made an

agreement for Covington Industries, a

home textiles fabric converter and

manufacturer, to merchandise Johnston’s

upholstery fabrics. Is in the process of

being acquired by an investment firm. 
A-6

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY–Continued

Firm and products Foreign activity Recent restructuring and modernization

JPS Industries, Inc.

Greenville, SC

Vertically integrated producer of

grey woven fabrics (50 to 55

percent of net sales), for use in

blouses, dresses and sportswear,

and of fiber-glass and other

specialty-fiber woven fabrics

finished to customer

specifications (24 percent of

sales), for use in circuit boards,

filtration bags, cargo liners and

other industrial applications. Also

extrudes films and sheets from

resins, for use in roofing, reservoir

liners, landfill caps and other

industrial and consumer products

(24 percent of sales).

Has a sales office in the

United Kingdom and an

extensive distribution

network in Europe. Licenses

roofing technology to Protan

A/S of Norway for

manufacturing and

marketing roofing products

in Scandinavia. Licenses

roofing and geomembrane

compound and

manufacturing technologies

to Tsutsunaka Plastics

Industries of Japan for

producing membranes in

Japan.

To reflect repositioning to a diversified

industrial and specialty products firm,

adopted the present name in 1999 in place

of JPS Textile Group. Focused recent

capital projects largely on increasing

capacity and productivity and reducing

costs in industrial product segments. 

Since 1993, sold several business units,

such as ones producing home fashion

woven fabrics, manmade-fiber industrial

fabrics, automotive and cotton commercial

products, and carpet; and established a

technical services center to develop new

industrial products and manufacturing

processes.

Quaker Fabric Corp. 

Fall River, MA

Vertically integrated producer of

woven finished upholstery fabrics

(about 90 percent of net sales). 

Also produces and sells chenille

and other specialty yarns used in

apparel and home furnishing

fabrics, though in-house weaving

consumes a high proportion of

specialty-yarn output. 

Reflecting the strategy of

global distribution, has

developed fabrics for

international markets,

simplified customers’

purchasing, and continues to

build a sales and distribution

network focused on Mexico

and other Latin American

countries, Australia, New

Zealand, and parts of

Europe, the Far East, and

the Middle East. Has a

distribution center in Mexico

and plans to set up a

subsidiary in Brazil to

market and distribute

fabrics. In 1998, exports

accounted for slightly more

than 18 percent of gross

sales.

Over the past 5 years, invested in

manufacturing equipment to expand

capacity, improve efficiency, and support

product quality (e.g., defect-free),

marketing, and distribution objectives. Put

about 300 new looms into fabric production

during the 1990s. Introduced bar coding in

all manufacturing areas to electronically

track materials from receiving to shipping. 

Achieved ISO-9001 certification in all

operations. Recently announced

implementation of a new supply chain

management system to reduce lead times

and inventories and enhance customer

service by improving on-time delivery

performance.
A-7

APPENDIX A

RECENT RESTRUCTURING AND MODERNIZATION IN THE U.S. BROADWOVEN FABRIC

INDUSTRY–Continued

Firm and products Foreign activity Recent restructuring and modernization

Springs Industries, Inc.

Fort Mill, SC

Vertically integrated producer of

finished or grey woven or

nonwoven specialty fabrics (8

percent of revenues in 1997-98)

for apparel, home textiles, and

industrial products through 1998. 

Also produces, purchases for

resale, and markets a range of

textile and nontextile home

furnishing products (100 percent

of revenues in 1999 and 92

percent in 1997-98), including

home-sewing fabrics, bed linens,

comforters, infant apparel, and

many other products.

Foreign sales accounted for

nearly 7 percent of total

sales in each of the last 3

years, with sales in Canada

comprising the bulk. A

subsidiary, Springs Canada,

markets and distributes to

Canadian retailers bath and

bedding products purchased

primarily from a Canadian

manufacturer.

In 1996, adopted a plan to focus on

offering a wide array of home furnishing

products. As a result, increased

purchasing, and scaled back production, of

grey fabrics; divested several plants and

business units producing fabrics for

apparel, furniture, and industrial products;

and exited the apparel fabric and industrial

product businesses. Also, acquired two

firms that supply home textiles;

consolidated and replaced information

systems to improve internal operations and

customer service; and partnered with

several other textile companies in an ecommerce marketplace for buying and

selling products throughout the fiber-tofinished goods supply chain. 

Thomaston Mills, Inc.

Thomaston, GA

Vertically integrated producer of

finished woven home furnishing

fabrics and products made from

them (65 percent of net sales),

such as bed linens and

comforters. Also dyes and

finishes, on commission, grey

woven fabrics (35 percent of

sales) used in casual and career

apparel.

Handles foreign sales, which

account for 4 to 5 percent of

net sales, through the

corporate office and

commissioned sales agents

and distributors in Canada,

Europe, the Middle East,

and Central and South

America. In 2000, launched

a joint venture with an

Austrian producer of home

textiles. 

Restructured and modernized during the

past 5 years to expand capacity in home

textiles production, lower costs, inventory

levels and lead times, and improve

productivity and on-time product deliveries

to customers. Also downsized and

discontinued the denim and sales-yarn

businesses.

Source: Compiled by the Commission mainly from the 10-K and 10-Q Forms filed with the SEC by the listed

companies during 1998-2000, found on the Internet and retrieved August 1999 through July 2000; and from

other industry sources, such as company news releases and annual reports. The 10-K Forms are available from

the SEC Web site at <www.sec.gov/Archives/edgar/data>.

APPENDIX B

TARIFF AND TRADE AGREEMENT

TERMS
B-2

TARIFF AND TRADE AGREEMENT

TERMS

In the Harmonized Tariff Schedule of the United States(HTS), chapters 1 through 97 cover

all goods in trade and incorporate in the tariff nomenclature the internationally adopted

Harmonized Commodity Description and Coding System through the 6-digit level of product

description. Subordinate 8-digit product subdivisions, either enacted by Congress or

proclaimed by the President, allow more narrowly applicable duty rates; 10-digit

administrative statistical reporting numbers provide data of national interest. Chapters 98 and

99 contain special U.S. classifications and temporary rate provisions, respectively. The HTS

replaced the Tariff Schedules of the United States (TSUS) effective January 1, 1989.

Duty rates in the general subcolumn of HTS column 1 are normal trade relations rates, many

of which have been eliminated or are being reduced as concessions resulting from the Uruguay

Round of Multilateral Trade Negotiations. Column 1-general duty rates apply to all countries

except those listed in HTS general note 3(b) (Afghanistan, Cuba, Laos, North Korea, and

Vietnam) plus Serbia and Montenegro, which are subject to the statutory rates set forth in

column 2. Specified goods from designated general-rate countries may be eligible for reduced

rates of duty or for duty-free entry under one or more preferential tariff programs. Such tariff

treatment is set forth in the special subcolumn of HTS rate of duty column 1 or in the general

notes. If eligibility for special tariff rates is not claimed or established, goods are dutiable at

column 1-general rates. The HTS does not enumerate those countries as to which a total or

partial embargo has been declared.

The Generalized System of Preferences (GSP) affords nonreciprocal tariff preferences to

developing countries to aid their economic development and to diversify and expand their

production and exports. The U.S. GSP, enacted in title V of the Trade Act of 1974 for 10

years and extended several times thereafter, applies to merchandise imported on or after

January 1, 1976 and before the close of September 30, 2001. Indicated by the symbol "A",

"A*", or "A+" in the special subcolumn, the GSP provides duty-free entry to eligible articles

the product of and imported directly from designated beneficiary developing countries, as set

forth in general note 4 to the HTS. A related program (see general note 16) established under

the African Growth and Opportunity Act (AGOA), effective from October 2, 2000, through

the close of September 30, 2008, provides duty-free entry to other eligible goods the product

of and imported directly from qualified, designated sub-Saharan African beneficiary countries,

as indicated by the symbol “D” in the special subcolumn; additional tariff benefits are

authorized for specified textile and apparel products under subchapter XIX of chapter 98 of

the HTS.

The Caribbean Basin Economic Recovery Act (CBERA) affords nonreciprocal tariff

preferences to developing countries in the Caribbean Basin area to aid their economic

development and to diversify and expand their production and exports. The CBERA, enacted

in title II of Public Law 98-67, implemented by Presidential Proclamation 5133 of November

30, 1983, and amended by the Customs and Trade Act of 1990, applies to merchandise

entered, or withdrawn from warehouse for consumption, on or after January 1, 1984.

Indicated by the symbol "E" or "E*" in the special subcolumn, the CBERA provides duty-free
B-3

entry to eligible articles, and reduced-duty treatment to certain other articles, which are the

product of and imported directly from designated countries, as set forth in general note 7 to

the HTS. A related program (see general note 17) enacted in the United States-Caribbean

Basin Trade Partnership Act and known as the CBTPA is effective from October 2, 2000,

through the close of September 30, 2008 (unless beneficiary countries earlier join a possible

Free Trade Area of the Americas). Indicated by the symbol “R” in the special subcolumn in

chapters 1 through 97 of the HTS, the CBTPA provides duty-free or reduced-duty entry

(identical to the rate of duty in effect for like goods of Mexico under the terms of general note

12) to certain products of qualified, designated CBTPA beneficiary countries imported

directly therefrom; such tariff treatment is also provided to specified textile and apparel

products under the provisions of subchapter XX of chapter 98 of the HTS.

Free rates of duty in the special subcolumn followed by the symbol "IL" are applicable to

products of Israel under the United States-Israel Free Trade Area Implementation Act of

1985 (IFTA), as provided in general note 8 to the HTS. 

Preferential nonreciprocal duty-free or reduced-duty treatment in the special subcolumn

followed by the symbol "J" or "J*" in parentheses is afforded to eligible articles the product

of designated beneficiary countries under the Andean Trade Preference Act (ATPA), enacted

as title II of Public Law 102-182 and implemented by Presidential Proclamation 6455 of July

2, 1992 (effective July 22, 1992), as set forth in general note 11 to the HTS.

Preferential free rates of duty in the special subcolumn followed by the symbol "CA" are

applicable to eligible goods of Canada, and rates followed by the symbol "MX" are applicable

to eligible goods of Mexico, under the North American Free Trade Agreement, as provided

in general note 12 to the HTS and implemented effective January 1, 1994 by Presidential

Proclamation 6641 of December 15, 1993. Goods must originate in the NAFTA region under

rules set forth in general note 12(t) and meet other requirements of the note and applicable

regulations.

Other special tariff treatment applies to particular products of insular possessions (general

note 3(a)(iv)), products of the West Bank and Gaza Strip (general note 3(a)(v)), goods

covered by the Automotive Products Trade Act (APTA) (general note 5) and the Agreement

on Trade in Civil Aircraft (ATCA) (general note 6), articles imported from freely

associated states (general note 10), pharmaceutical products (general note 13), and

intermediate chemicals for dyes (general note 14).

The General Agreement on Tariffs and Trade 1994 (GATT 1994), pursuant to the

Agreement Establishing the World Trade Organization, is based upon the earlier GATT 1947

(61 Stat. (pt. 5) A58; 8 UST (pt. 2) 1786) as the primary multilateral system of disciplines

and principles governing international trade. Signatories' obligations under both the 1994 and

1947 agreements focus upon most-favored-nation treatment, the maintenance of scheduled

concession rates of duty, and national treatment for imported products; the GATT also

provides the legal framework for customs valuation standards, "escape clause" (emergency)

actions, antidumping and countervailing duties, dispute settlement, and other measures. The

results of the Uruguay Round of multilateral tariff negotiations are set forth by way of

separate schedules of concessions for each participating contracting party, with the U.S.

schedule designated as Schedule XX. Pursuant to the Agreement on Textiles and Clothing

(ATC) of the GATT 1994, member countries are phasing out restrictions on imports under
B-4

the prior "Arrangement Regarding International Trade in Textiles" (known as the Multifiber

Arrangement (MFA)). Under the MFA, which was a departure from GATT 1947

provisions, importing and exporting countries negotiated bilateral agreements limiting textile

and apparel shipments, and importing countries could take unilateral action in the absence or

violation of an agreement. Quantitative limits had been established on imported textiles and

apparel of cotton, other vegetable fibers, wool, man-made fibers or silk blends in an effort to

prevent or limit market disruption in the importing countries. The ATC establishes

notification and safeguard procedures, along with other rules concerning the customs

treatment of textile and apparel shipments, and calls for the eventual complete integration of

this sector into the GATT 1994 over a ten-year period, or by Jan. 1, 2005.