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Policy challenges and opportunities for U.S. textile manufacturing

November 3rd, 2020 / By: / Expo News

The U.S. textile industry worked “swiftly and impressively” to pivot to produce personal protective equipment (PPE) this spring, leveraging existing manufacturing know-how and equipment and making new investments to shift production, according to Sara Beatty, president of Whitehaven Trade Advisors.

“However, clearly the U.S. would have been in a much better position had we had the right procurement and trade policies going into this crisis that supported domestic PPE manufacturing instead of allowing it to overconcentrate in a few countries in such a dangerous way,” she told attendees of ATA Virtual Expo 2020 on Tuesday. “We’ve unfortunately learned the hard way that as a nation we’ve become almost completely dependent on PPE mainly from China…. They had their own domestic needs during the pandemic and received priority, and rest went to the highest bidder. Unfortunately, we saw that the existing PPE supply chains were basically a house of cards.”

The crisis now presents the industry with a unique opportunity, she added. The pandemic “opened eyes” in Washington for the need to reshape U.S. policy with regard to reshoring and safeguarding U.S. domestic PPE manufacturing.

Beatty and Auggie Tantillo, SRG & Associates, represent the Narrow Fabrics Institute (NFI) and the U.S. Industrial Fabrics Institute (USIFI) of ATA in their Washington advocacy work. The pair provided Expo attendees with a Washington policy update, covering efforts around PPE, the FY2021 National Defense Authorization Act (NDAA), the Miscellaneous Tariff Bill, how the outcome of the presidential race might affect trade policies, and how members can get involved in advocacy efforts.

Numerous proposals are circulating on Capitol Hill that incorporate many of the principles outlined in a joint statement put forth by a coalition of trade associations and related organizations in July, Beatty said. She outlined a few of the proposals that “rise to the top” in terms of addressing critical reforms.

“There is a concern that memories will be short when things return to normal, and it’s critical that we use this window to achieve a policy response that will support U.S. manufacturers and ensure that we don’t find ourselves back in this position in the future,” she said. “And we don’t want to lose those supply chains that we worked so hard to create overnight in response to the emergency. We want to have those endure after the emergency is over.”

Tantillo noted that the PPE proposals are modeled on the Berry Amendment. The Pentagon procures about $1.8 to $2 billion worth of textile and apparel product each year, he said, but the ‘Buy American’ rules of the Berry Amendment shouldn’t be taken for granted.

“You can imagine that off-shore manufacturers, foreign governments and distributors have a strong dislike for that rule,” he said. “They are in Washington on a consent basis trying to undermine ‘Buy American’ provisions such as the Berry Amendment, and we are serving as a counterweight to that to make the Berry Amendment not only secure, but that it isn’t bit by bit eroded through amendments.”

A current priority is to lower the price point at which the Berry Amendment kicks in for textiles and apparel. The simplified acquisition threshold (SAT) to comply with the Berry Amendment was raised from $150,000 to $250,000 in 2018 as part of a mandatory inflation adjustment mechanism that applies to all defense purchases.

“We argue that $250,000 is much more binding on those of us in the U.S. textile sector than it is on say, the aircraft sector, which generally doesn’t sell anything at that price point,” Tantillo said. “We’ve asked our allies in Congress to delink textiles and apparel from that broader grouping and have a separate SAT level … based at the $150,000 amount, and that any future increases be tied to the Consumer Price Index.”

The $150,000 proposal made it into the Senate version of FY2021 NDAA, but not the House version. The two bodies are negotiating the final bill, with results expected later this year. If the proposal is left out of the final version, it will be a priority for industry advocates in the coming year.

“Like everything, today’s election will have an impact on how easy or complicated this will become,” he said.

Registration for ATA Virtual Expo 2020 is open through Nov. 12. All Expo sessions will be posted on the Virtual Expo platform for viewing during Expo and for 30 days after Expo has concluded.