Come Jan. 1, much of what remains of the Southeastern textile industry will be in jeopardy.
That's the day all of the last import quotas on textiles and clothing will be eliminated. Workers in Virginia, North Carolina, South Carolina, Georgia and Alabama will wake up to an era of stiffer - some say unfair - competition.
"As many as 600,000 jobs could be lost in the United States in textiles, apparel and related jobs," said Robert DuPree, the vice president of the National Council of Textile Organizations, the industry's trade association. "It means a decimation of the bulk of the industry."
These jobs produce the fabric that goes into clothing worldwide. In decline in the Southeast for 20 years because of increased foreign competition and mechanization, these jobs may be about to disappear here altogether.
"There will be some survivors," DuPree said, "but if you lose the overwhelming majority of your industry, it won't be a pretty day in the Carolinas."
New Year's Day 2005 will mark the end of a 10-year plan by the World Trade Organization to phase out quotas on textiles. The goal is to allow developing nations greater access to American and European markets. International trade in textiles and apparel is a $495 billion business annually.
China is prepared to take advantage of the change. After it joined the WTO in 2001, China aggressively built its manufacturing base, especially in textiles, with help from foreign investment and its big domestic market and labor force. It has been able to undercut competitors each time a quota was lifted.
American manufacturers want the federal government to grant at least a temporary reprieve.
Congress created safeguards for the textile industry when it granted China Most Favored Nation status. American manufacturers have filed a series of appeals with the Commerce Department's Committee for the Implementation of Textile Agreements.
That committee is expected to rule by February on whether the growth of textile imports from China can be limited to 7.5 percent a year. Commerce Department officials declined to comment on possible safeguards.
"It's vital to the United States to impose the safeguards in order to protect a portion of the U.S. textile industry," said Jerry Rowland, the chief executive of National Textiles, a Winston-Salem company that employs 3,600 people in five states. "All of the companies are writing letters to support the safeguards."
But powerful retailing and importing interests oppose the safeguards.
"They are just going to create a lot of short-term havoc," said Erik Autor, the vice president of the National Retail Federation. "By getting rid of this whole system of government-managed trade, it will make it easier for retailers to provide products consumers want at prices they can afford."
But textile manufacturers said that China is not playing fairly.
In 2002, quotas were eliminated on several categories of clothing, DuPree said. By manipulating its currency and subsidizing its companies with loans that aren't repaid, China was able to slash its apparel price 53 percent.
"How in the world can a free-market business compete with a 53 percent price cut and an unlimited supply?" DuPree said.
As a result, he said, China's market share in those categories went from 9 percent in 2001 to 72.3 percent in June 2004, undercutting American manufacturers and every other country that exports clothing to the United States.
Late last year, the Commerce Department imposed safeguards on some of the clothing categories, slowing the growth of the Chinese imports.
Many American manufacturers now produce cloth that goes to Caribbean and Central American countries to be turned into clothing that is then sent back to the United States for sale.
"In a lot of cases, the prices that China can make the goods and ship it over here is lower than we can make the fabric and ship it to Central America," Rowland said. "When quotas go off, that would mean the majority of the U.S. textile industry would disappear over the next three or four years."
Take the production of bras, for example. U.S. textile manufacturers had a thriving business producing the cloth and elastic that were shipped to Haiti, Dominican Republic, Costa Rica and Mexico to be turned into bras that could be shipped back to the United States duty free.
But in the first 18 months after quotas were lifted on bras from China in 2002, its exports to the United States grew 362 percent, even though China had to pay a tariff, while exports from Haiti, Dominican Republic, Costa Rica and Mexico dropped.
"Once the controls were lifted, China took over the market," DuPree said.
That's why the textile industry wants the Commerce Department to impose safeguards before the Chinese have had a chance to overwhelm U.S. markets when the last of the quotas is lifted.
Asked if he had confidence in the Commerce Department, Rowland laughed derisively.
"It's encouraging that they accepted our petitions," he said. "But the retailers and importers are very powerful people. Wal-Mart is importing $18 billion worth of goods from China" this year.
Retailers are tired of being portrayed as greedy businessmen forcing American manufacturers to close, Autor of the National Retail Federation said.
"What's driving all this is the American consumer," he said. "The 'greedy' retailer is making the huge profit margin of 2 percent on sales. If you do not provide your customers with what they want at the lowest prices, you're going to go out of business."
Some economists also have little sympathy for the textile industry.
"The textile people have seen this coming for 10 years," said Robert Barfield, a trade specialist with the American Enterprise Institute. "The government should do something about trade adjustment assistance for workers whose jobs are put in jeopardy, but I don't think we ought to re-institute quotas."
Even if the safeguards are implemented, they are only a temporary fix, some economists say.
"I don't think it changes the fundamental story that there's going to be a huge restructuring of imports of apparel into this country and the European Union," said Nicholas Lardy, a Chinese trade expert with the Institute for International Economics. "The best they can do is slow it down for a few years."
