NCPA - National Center for Policy Analysis

Textile Industry Protection

March 8, 2002

Since he signed on as America's key ally in the war against terrorism, Pakistani President Pervez Musharraf has asked only one favor: suspension of U.S. tariffs and quotas on Pakistani textiles. Last month he got his answer: no.

Instead, the administration consented to a bureaucratic sleight of hand that would let Pakistan borrow unused quotas of American imports such as wool gloves. The offer was worth $140 million, one-tenth of the value of Musharraf's initial request. Others, however, have been more generous.

  • Turkey raised quotas for Pakistan in October and the European Union (EU) lifted all tariffs, despite cries from its textile industry.
  • Pakistani exports to the EU are up 43 percent, giving them a much-needed economic boost.
  • But far from countering terror with trade, the U.S. has actually reduced its imports from Pakistan since 9-11.
  • Pakistani textile exports to the U.S. -- 80 percent of its total U.S. exports -- dropped 40 percent, costing 48,000 jobs.

Instead of helping Pakistan recover, analysts say, the Bush Administration kowtowed to the U.S. textile lobby, which supports protectionist tariffs and quotas. During the last six months, the industry has lobbied against tariff-lowering requests from Turkey, Uzbekistan and Tajikistan -- all key allies in the war on terrorism.

In other words, observers note, the protectionist lobby of a dying industry has become the opponent of American foreign policy. However, like the U.S. steel industry, domestic textiles are declining -- 124 plants closed or made extensive layoffs last year.

Source: Franklin Foer, "Fabric Softener," New Republic, March 4 and 11, 2002.


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