What Does TDA 2000 Mean for Cotton?

As apparel imports from the Caribbean Basin have grown, cotton's share of these imports also has grown. The Caribbean exports a wide range of apparel products to the United States, but especially T-shirts and undergarments for both sexes. T-shirts and undergarments accounted for over 53% of the 3.4 billion square-meter equivalents in U.S. apparel imports from the Caribbean in 1999 (see Figure 3). Of apparel imported from the Caribbean Basin over the last 11 years, 61% was knits, the bulk of which were of cotton. The percentage of cotton in knits has been growing, and this growth is expected to continue under TDA 2000. 

In 1989, U.S. cotton apparel imports from the Caribbean Basin amounted to 312 million square-meter equivalents of fabric, roughly 46% of all apparel imported from the region. By 1999, cotton apparel imports had increased to 2.3 billion square-meter equivalents, and cotton's share had grown to 68%. Thanks in part to TDA 2000, U.S. apparel imports from the Caribbean are projected to reach approximately 7.9 billion square-meter equivalents by 2005 (see Figure 4). If cotton just maintains its present 68% share, it will account for approximately 5.3 billion square-meter equivalents.

The CBI will promote U.S. investment in the Caribbean Basin and help to strengthen the international competitive position of the U.S. textile industry. The provisions of the CBI bode well for U.S. cotton, in that they encourage increased U.S. exports of cotton fabric and yarn to the Caribbean, and they will stimulate U.S. domestic consumption of cotton for fabric and thread for export. As a result of the CBI, cotton apparel imported by the United States from Caribbean countries will be substantially more likely to be made of U.S. cotton than apparel imported from other sources.

Top

Future Directions for Apparel Trade

Some of the market share projected to be gained by the Caribbean Basin and sub-Saharan Africa probably will be lost back to Asia in 2005, when the United States will no longer be able to limit import volumes; however, the Caribbean will continue to enjoy advantages over Asian sources on several fronts. The region will continue to benefit from its proximity to U.S. mills, allowing for quicker turnaround times and lower shipping costs. Also, the CBI and SSA member nations will benefit through continued exemption from the average 17% tariff on qualifying apparel. As with NAFTA, the challenge before U.S. manufacturers is to capitalize on the opportunity TDA 2000 affords to gain a sourcing foothold in the Western Hemisphere, establish operations and relationships with local manufacturers, and establish a sustainable market advantage before quotas are lifted in 2005.

Apparel Sales

For the first seven months of 2000, apparel sales posted gains of 3.9% in units and 2.8% in dollars over the same period last year, according to consumer data from the NPD Group. All market segments showed increases in both unit and dollar sales. Unit sales of men's apparel grew 5.7%, more than double the rate of growth in dollar sales (2.2%). Slacks, denim jeans, and shorts were strong markets for men's apparel during the period. Women's apparel sales increased 3.6% in units and 3.3% in dollars, with slacks, denim jeans, and shirts and blouses posting strong unit and dollar sales. Girls' shirts and blouses and slacks, along with boys' sport shirts and shorts, posted solid increases in both dollar and unit sales. Cotton's share of total apparel was 60.7% for the seven-month period. 

Top

Home Fabric Sales

Spending on home fabrics grew 6.6% for the seven-month period, slightly below the 7.2% growth in unit sales. Activity was strong in the sheet market, with increases of 4.7% in dollar sales and 4.9% in unit sales for the period. The towel market increased 6.4% in unit sales, nearly five times the increase in dollar sales (1.3%), indicating a decline in average price. Other bedding, which includes quilts, comforters, bedspreads, and blankets, posted double-digit increases in both unit and dollar sales. Cotton's share climbed to 65.8% in home fabrics, an increase of 1.1 percentage points from last year.

Top