North Carolina has been one of America's leading manufacturing
states in textiles and apparel for years. Consequently, many policies
have been enacted that both help as well as hurt the industry.
Free Trade Agreement, signed in November of 1993, helped to
establish free-trade guidelines between America, Canada, and Mexico.
The effect of NAFTA has been felt throughout the state; however
the nature of the outcome is still under debate.
The report by the Council of the Americas and the U.S. Council
of Mexico-U.S. Business, NAFTA Delivers for North Carolina
shows that the state has increased its exports of textiles and apparel
to Mexico (560.1 million in 2001) and Canada (453.4 million in 2001).
Although exports have increased, job losses continue to mount in
the sector. Since NAFTA went into effect in 1994, the state has
lost half its textile and apparel industry jobs. In an open letter
to President Bush, Governor Mike Easley states that "the effects
of past trade agreements have been devastating for the textile and
apparel industries throughout the Southeast."
The Multi-Fibre Arrangement (MFA) has regulated the international
sector for over thirty years. Originally negotiated for a four-year
period, the MLA's intent was to help both developed and developing
countries prosper. Limits were placed on exactly what quantity of
textile and apparel goods could be exported from one country to
another. Although the quotas were supposed to lessen as the years
went on, the over time the limits became more restrictive to deloping
The World Trade Organization has recently incorporated textiles
and apparel into its trade policy. Under pressure to eliminate trade
barriers, the WTO negotiated the
Agreement on Textiles and Clothing in 1994. That pact was designed
to gradually phase out the MFA quotas in a three-step process over
a ten-year period:
- 16% of tariff lines to be integrated into the Gatt (1995-1998)
- 17% of tariff lines to be integrated (1998-2002)
- 18% to be integrated after 2002 followed by the final 49% by
the end of 2004 (2002-2004)
State Incentives and Programs
North Carolina Department of Commerce has designed incentives
and programs to help revitalize the sector. These include the William
S. Lee Quality Job and Expansion Act, the Industrial Development
Fund, and the Business Energy Improvement program. There are also