Textile Trade Liberalization Brings Difficulties
to Some Rural Communities
Stephen
MacDonald and Karen
Hamrick
On January 1, 2005, the quotas that governed
world textile and apparel trade for decades were
removed, the culmination of a 10-year global liberalization
process under the aegis of the World Trade Organization
(WTO). With this relaxation of import protection,
U.S. clothing imports from Asia have risen and clothing
prices have fallen. While both rural and urban communities
across the United States have benefited from lower
clothing prices, they have also felt the sting of
a large number of textile plant closings. U.S. textile
and apparel employment has fallen by more than 900,000
jobs since 1994, nearly a 60-percent decline. Nonmetro
counties in the Southeast have taken the brunt of
the losses, with some rural communities hit especially
hard.
After the expiration of the 1974
Multifiber Arrangement, WTO members agreed to eliminate
textile and apparel trade quotas in four stages
between 1995 and 2005 and to expand the import quantities
permitted by quotas in the years leading up to their
removal (see “The
World Bids Farewell to the Multifiber Arrangement,”
in Amber Waves, February 2006). In the
United States, the quota removal was “backloaded,”
that is, 80 percent of the effective quotas—quotas
that were limiting imports from major Asian producers—remained
in place through 2004. Despite that measure, U.S.
textile and apparel employment declined steadily
over the 10-year period, in large part as a result
of a rise in nonquota imports from Mexico and the
Caribbean Basin.
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These changes have been difficult
for many U.S. textile and apparel workers. Compared
with displaced workers in other industries, textile
and apparel workers were more likely to drop out
of the labor force, and those who found new jobs
took longer to do so, with three-fourths earning
less in their new jobs. Rural areas have been disproportionately
affected by the job losses—45 percent of
all displaced textile and apparel workers between
1997
and 2003 were nonmetro residents, more than double
the nonmetro population’s share of the
U.S. labor force. Rural communities, as well
as workers,
have been hurt by these plant closings, as the
losses of these long-established businesses
can take a
large bite out of an area’s tax base. With
many of these communities already operating with
low budgets, those faced with plant closures may
be hard-pressed to maintain public service levels.
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