Trade: Mission Impossible

One of the most delicate dilemmas confronting the Nixon Administration is that of reconciling its position as an advocate of free trade with the President's campaign pledge to cut down on textile imports. In an effort to redeem that promise, Commerce Secretary Maurice Stans flew to Europe last weekend for two weeks of talks with the U.S.'s major trading partners. Stans goal is to persuade reluctant European countries to agree to voluntary quotas on their textile shipments to the U.S.

He faces a frosty reception. The President broached the subject during his February swing around Europe, and was firmly if politely rebuffed. Stans hopes to override European objections by invoking the all-too-likely prospect that Congress may impose compulsory—and much stiffer—textile-import controls in the absence of voluntary restrictions. As Stans warned before leaving Washington, "The task will not be easy." It may well prove impossible. But Stans insists that while "an expansionary trade policy is good for the U.S., it must not be at the price of dismantling one of our major industries."

Rising Deficits. Textile imports from countries that use American management methods and technology—but pay lower wages—are swamping the U.S. market. In 1961, the U.S. enjoyed a trade surplus of $53.7 million in cotton, wool and synthetic fibers. Since then, deficits have increased steadily. Last year the imbalance climbed 60%, to $807 million. Today 47% of all women's synthetic-fiber sweaters and 46% of all wool sweaters sold in the U.S. are manufactured abroad. One of every three men's all-wool suits is made from Japanese worsteds, and a quarter of men's shirts are imports.

Foreign competition is most severe in man-made-fiber textiles, the most rapidly growing segment of the industry since advancing technology gave the world wash-'n'-wear shirts and permanent-press pants. Although synthetics account for 54% of U.S. textile production, imports have swelled from $59.7 million in 1961 to $481 million last year. Cotton-textile imports, once a serious threat to U.S. producers, are regulated by a restraining agreement negotiated with 31 countries in 1961. Today they are of diminishing importance as more and more foreign textile makers switch to synthetics.

The import challenge poses a threat of serious economic and social dislocation in some areas of the U.S. Both industry and Government are worried about the fate of the textile industry's 2,400,000 workers, most of them comparatively unskilled and undereducated. Geographic concentration compounds the industry's troubles. Some 70% of its workers are in the South, chiefly in North Carolina, South Carolina and Georgia. Many mills are in one-or two-industry towns, some of which have already begun to feel the pinch. During the past two years, 89 firms in the knitted-outerwear business alone have permanently closed their doors.