The Trans-Pacific Partnership Agreement (TPP) is a proposed regional free trade agreement (FTA) currently under negotiation among 12 Pacific Rim countries. Initiated under President George W. Bush, the TPP concept has wide bipartisan support. As the negotiations progress, provisions concerning textile trade have become a major point of contention, attracting considerable congressional attention and debate. This report examines the potential implications of a TPP agreement, if one is reached, for the U.S. textile manufacturing industry. In 2013, the United States exported about $14 billion in yarns and fabrics worldwide. More than half of this output was shipped to Western Hemisphere nations that are members of the North American Free Trade Agreement (NAFTA), the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), and the Caribbean Basin Initiative (CBI). These FTAs provide that certain exports from member countries may enter the U.S. market duty-free only if they are made from textiles produced in the region. This has encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and fabrics in apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR countries contributed to a U.S. trade surplus of $2.4 billion in yarns and fabrics in 2013. The TPP marks the first FTA negotiation for the United States initiated since the complete end of quotas on textile and apparel trade. Duty-free access to the U.S. market under TPP could be of considerable benefit to Asian manufacturers, which now face U.S. import duties on textiles and apparel of up to 32%. Textile industry trade groups have warned that, if approved, the TPP could lead to domestic job loss if it results in apparel producers in the Western Hemisphere, which often use U.S.-made textiles, losing U.S. market share to producers in Vietnam and other TPP countries. Aligned against them are retailers and apparel companies that want to be able to import apparel from producers wherever they are located, regardless of whether U.S. textiles are used; they urge full inclusion of textiles and apparel in any TPP agreement and favor preferential access for apparel cut and sewn from fabric made in countries not included in the TPP, such as China. With nearly $57 billion in industry shipments in 2013, textile manufacturing, which produces yarns and fabrics from raw materials such as cotton and various man-made fibers, is a supplier industry to three industrial sectors. The apparel industry, which transforms textiles into clothing, consumed only 12% of U.S.-manufactured fibers in 2012. About 40% of textile output went into home textiles and floor coverings, while almost half was used in technical textiles such as conveyor belts and automotive floor coverings. Textile manufacturing occurs largely in highly automated factories, whereas apparel manufacturing is characterized by decentralized, globally dispersed production networks that are coordinated by lead firms that control design, branding, and other activities. Many of the world's largest apparel retailing and marketing firms are headquartered in the United States, but because it typically costs less to manufacture apparel abroad, the United States imports far more clothing than it makes domestically. U.S. apparel shipments totaled more than $13 billion, and apparel manufacturers directly employed 143,600 workers in 2013 (see Appendix A ). Unlike textile manufacturers, most U.S.-headquartered apparel firms have limited or no U.S. manufacturing capabilities. Some manufacture through a combination of facilities they own and third-party arrangements, often with foreign factories. Others rely entirely on arrangements with third-party suppliers, mostly in Asia. Large retailers frequently contract directly with apparel sourcing companies, which in turn portion out the production work to independent manufacturers. The United States was responsible for approximately 1% of the $460 billion of global apparel exports in 2013, according to statistics from the World Trade Organization. China, Vietnam, Indonesia, Bangladesh, and Mexico rank as the top apparel suppliers to the United States. Beyond apparel manufacturing, countless other functions related to apparel are done domestically, such as design, branding, and marketing of finished products. The U.S. home furnishings industry has fared far better against import competition than the apparel industry, mainly because manufacturing of carpets, curtains, and tablecloths is highly automated. For example, the development of larger, faster carpet-tufting machines contributed to a decline in employment at U.S. carpet and rug mills, from 49,000 workers in 2003 to 31,200 in 2013. Shipments from U.S. carpet and rug mills totaled $8.9 billion in 2012. The health of the carpet and rug mills industry is tied in large part to conditions in the domestic housing and commercial building markets, raw material prices, and competition from foreign producers. The output of technical textile mills is used across various industrial sectors. According to one recent estimate, automotive manufacturers use more than 200,000 tons of textiles for automotive interior fabrics, including upholstery, headliners, and door panels, excluding textiles for carpets, floor mats, tire cords, seat belts, or air bags. The Industrial Fabrics Association International (IFAI) estimated that in 2013 about 160,000 workers in the United States produced fabrics specifically for the technical textile market. Textile manufacturing begins with fiber, which can be harvested from natural resources (e.g., cotton, wool, silk, or ramie), manufactured from cellulosic materials (e.g., rayon or acetate), or made of man-made synthetic materials (e.g., polyester, nylon, or acrylic). After the raw fibers are shipped from the farm or the chemical plant, they pass through four main stages of processing (see Figure 1 ): yarn production, in which fiber is spun into filament or yarn; fabric production, which can take place at very small mills or large textile mill operations, and involves primarily either weaving or knitting; finishing, which prepares the textiles for further use by processes such as bleaching, printing, dyeing, and mechanical or wet finishing; and, fabrication, where the finished cloth is converted into apparel, household, or industrial products. Worldwide, in 2013, the textile industry produced 86.6 million metric tons of textiles. Man-made fibers accounted for more than two-thirds of total production, compared to the share of natural to man-made fibers at about half in the 1990s. Most of the global growth in man-made textile manufacturing has taken place in China, which by 2013 accounted for about two-thirds of total production. The United States was responsible for 5% of global production of man-made fibers in 2013. No other country produced more than 4% of the global total in 2013. Cotton is the most important natural fiber. In the 2013-2014 marketing year, China ranked as the world's largest producer of cotton at 7 million metric tons, followed by India and the United States. Other large cotton producers include Pakistan, Brazil, Uzbekistan, and Turkey. Many of the leading cotton producers are also leading mill users of raw cotton. The top four consumers of cotton are China, India, Pakistan, and Turkey, which together account for more than two-thirds of world consumption. Consumption of cotton by U.S. textile mills peaked in 1997. Since then, due to the decrease in domestic textile production caused by competition from imported textile and apparel products, U.S. mill use of cotton has dropped about 70%. As for other natural fibers, two TPP negotiating partners, Australia and New Zealand, are among the world's leading wool-growing nations. Vietnam is a top 10 producer of silk, but accounts for only a small portion of global production. China and India are the world's two largest silk producers. U.S. textile output has not recovered from the severe downturn in 2008 and 2009. Production at textile mills remains about 25% below the 2007 level, and production at textile product mills is approximately 30% less than in 2007. The value of shipments totaled nearly $57 billion in 2013, a 5% increase over 2012. This amounted to 1% of total U.S. manufacturing shipments (see Appendix A ). According to government data, there were 2,555 fewer establishments manufacturing textiles in 2012 than in 2003. Appendix B provides an overview of selected U.S.-headquartered textile manufacturers. Although the National Council of Textile Organization (NCTO) reported in recent congressional testimony that "the textile industry has invested over $3 billion in new technologies, machinery, and manufacturing facilities since 2010," the most recent data, for 2012, show a continued drop in the number of establishments producing textiles. Domestic textile manufacturers have invested heavily in technology to reduce operating costs. For example, modern industrial looms incorporate air-jets to weave at speeds of 2,000 picks per minute (compared with 200 picks in 1980, which at the time was considered fast). Some modern textile mills have become almost completely automated, churning out thousands of square yards every hour with as few as 10 or 20 employees. According to the U.S. Census Bureau, the U.S. textile industry invested $18.9 billion in new plants and equipment between 2001 and 2012. Since then, several manufacturers, including Gildan Activewear, Parkdale Mills, Zagis USA, and Keer, have announced plans to increase U.S. production of yarns, nonwoven and technical fabrics, and other types of textiles by building new textile plants or expanding current facilities. Because yarn and fabric production are capital- and scale-intensive, they demand higher worker skills than apparel production. As a consequence, the textile industry has been less prone to relocation to lower-wage countries than apparel manufacturing.