INVESTMENT CRUCIAL TO U.S. TEXTILE RECOVERY
With more private investment, not more
protection, the U.S. textile industry could become competitive
with the most modern foreign producers, analysts from two
congressional agencies said today.
    The Office of Technology Assessment, a nonpartisan arm of
Congress told a House Ways and Means Trade Subcommittee hearing
there was still concern for the future of parts of the U.S.
textile and apparel industry, but there was more reason for
optimism than a few years ago.
    "While textile producers are making significant
investments, they could do more," OTA analyst Henry Kelly said.
    The Congressional Budget Office (CBO), the nonpartisan
budget analysis arm of Congress, said federal loans or loan
guarantees would be preferable options for Congress rather than
increased trade protection which could lead to foreign
retaliation.
    CBO analyst Edward Gramlich said past trade protections,
first imposed in the 1950's have had only a small benefit for
profits and investments of domestic firms.
    Trade Subcommittee chairman, Rep. Sam Gibbons, said the
agencies analyses seemed to agree with his opinion against
congressional approval of protectionist textile quota
legislation aimed mainly at Western Europe, Japan and other
Asian textile producing countries.
    President Reagan last year vetoed a textile protection bill
but it was reintroduced in this session of Congress and is
expected to be voted on in the House this year.
    However, approval this year is in doubt because passage of
a major trade bill without specific protections for textiles
showed a weakening of support for the legislation.
    Most U.S. producers have fallen behind other foreign
producers in the use of modern textile and apparel production
equipment and net imports are growing faster than the domestic
markets, Kelly said.
    He added that private investment in the textile and
clothing industry in 1983 of 0.5 pct was less than one-seventh
the average manufacturing investment of 3.9 pct.
    Despite existing import quotas and tariffs, imports of
textiles grew 26 pct in 1986 and imports of apparel grew 14 pct
while U.S. production rose only 1.9 pct.
    "The traditional industry seems destined to be replaced by
new technology, imports, or some combination of both. While the
industry may not be able to compete in all domestic markets
that it enjoyed twenty years ago, the results of our research
indicate that portions of the domestic market can be recovered,
and that exports can be expanded," Kelly said.
 Reuter
