Textile Exports to Trade Preference Regions

Publication Date: May 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Manufacturing and industry; Trade

Type:

Abstract:

With Congress currently debating approval of a free trade agreement with five Central American countries and the Dominican Republic (CAFTA-DR), it may be useful to know how successful existing trade preference programs have been in terms of spurring U.S. exports of textiles to the designated regions. Congress has eased trade terms on a variety of products from Andean, Caribbean, and sub-Saharan region nations -- especially on textiles and apparel -- in moves to stimulate economic growth in poorer regions of the world. To provide markets for U.S. manufacturers of yarn and fabric, however, the trade preference programs for the most part require U.S.-made yarn and/or fabric as inputs for textile and apparel end-products for them to qualify for trade preference.

This report examines the dollar value of U.S. yarn, fiber, and fabric exports to countries covered by U.S. trade preference programs before and after textile trade preferences went into effect. The trade preference programs covered are the African Growth and Opportunity Act (AGOA), the Andean Trade Promotion and Drug Eradication Act (ATPDEA), and the Caribbean Basin Trade Preference Act (CBTPA) -- including any subsequent amendments.

Dominated by trends in exports to CBTPA countries, U.S. exports of fiber, yarn, and fabric to the three trade preference regions increased steeply in the early 2000s. Among the above three trade preference regions, CBTPA countries as a group constitute the largest market by far for U.S. fiber, yarn, and fabric, with ATPDEA countries second, and AGOA countries third.

U.S. domestic exports of fiber, yarn, and fabric to CBTPA countries, which had been rising at least since the mid-1990s, increased sharply in 2001 and have risen further since then, although not as rapidly. U.S. domestic exports of fiber, yarn, and fabric to ATPDEA countries also increased markedly between 2002 and 2003, but less rapidly than exports to CBTPA countries, with each of the major categories registering sharp gains. And such exports rose again in 2004. However, U.S. exports of fiber, yarn, and fabric to ATPDEA countries for the most part did not re-attain their levels of the late 1990s. U.S. domestic exports of the items in question to AGOA countries are the lowest by far among the three trade preference regions covered by this report; have not reattained their levels of the late 1990s; and have experienced no increase of note in the 2000s. Such exports actually fell in 2001, the year after AGOA textile trade preferences became effective.

Cotton or cotton blend intermediate textile items account for about half of U.S. domestic exports of fiber, yarn, and fabrics to the three trade preference regions combined. As in the case of overall domestic exports of fiber, yarn and fabric, trends in exports of cotton fiber, yarn, and fabric to the three regions are dominated by trends in exports to CBTPA countries. However, in contrast to the case of overall exports, exports of cotton fiber, yarn, and fabric to two of the three regions after 2000 have exceeded levels of the late 1990s. This report will be updated as warranted.