The Wall Street Journal
Copyright (c) 1994, Dow Jones & Co., Inc.
Tuesday, July 5, 1994
The Latest Salvo in Clinton's Textile Trade War
By James Bovard

Last week, in a stirring address to the White House Conference on
Africa, President Clinton declared that, before he took office, "our
country really didn't have a policy toward Africa" and revealed that
"it struck me again how we needed good intentions in Africa." Mr.
Clinton bragged of his $600 million trade, investment and development
program for South Africa and asserted that he wants to see "more
prosperity and more well-functioning economies" throughout the
continent. Sadly, while Mr. Clinton is trumpeting his good intentions,
his administration is slapping new textile quotas on exports from
Africa and other regions.

On May 18, the Commerce Department announced plans for strict quotas
on imports of Kenyan pillowcases and shirts. This typifies the Clinton
administration's brain-dead trade policy.

Thanks to the Commerce Department's vigilance, Americans will likely
be prohibited from purchasing more than 1,565,616 Kenyan pillowcases in
the next year. Kenyan pillowcases account for less than 1% of the
pillowcases Americans buy. But Commerce announced in a Federal Register
notice, "The sharp and substantial increase in [pillowcase] imports
from Kenya is disrupting the U.S. market for cotton pillowcases."

Despite this de facto proclamation of a trade emergency, there have
been no news reports of chaos in the linen sections of major department
stores, or any stories of foreign pillowcases sparking panic in the

Inquiries at the Commerce Department about the disruption proved
unelucidating. Commerce officials had no evidence that any American
worker had lost his job as the result of the Kenyan imports. When asked
about the imports' impact on U.S. employment, Commerce international
trade specialist Helen LeGrande replied, "I have no idea." Nor did
Commerce have any evidence that Kenyan imports have caused the price of
U.S. pillowcases to fall. The primary evidence that the U.S. government
has is that Kenyan pillowcase imports have increased; ergo, the U.S.
market is disrupted.

The official notice, signed by Rita Hayes, Commerce's deputy
assistant secretary for textiles, solemnly declared, "The United States
remains committed to finding a solution concerning [Kenyan
pillowcases]." Yet the only solution acceptable to the U.S. government
is new trade restrictions. Both Portugal and Spain export far more
pillowcases to the U.S. than does Kenya, but the U.S. would not dare
impose quotas on members of the European Union.

The U.S. has provided almost $1 billion in foreign aid to Kenya since
1980. Much of this aid aimed to help Kenya develop its own private
sector. Now that the Kenyan textile industry is starting to export,
Commerce appears hellbent on smothering the infant industry in the
crib. Laura Jones of the U.S. Association of Importers of Textile and
Apparel notes that textile "imports from Africa, particularly Kenya,
Zimbabwe, Malawi, Swaziland, the Ivory Coast and South Africa, have an
opportunity to increase significantly. However, this opportunity will
be lost if the Clinton administration continues its program of overly
restrictive quotas on the region."

The attack on Kenyan textile exports is part of the Clinton
administration's broad assault against textile imports. Commerce
Secretary Ron Brown visited Egypt in January and publicly criticized
the government for its slowness in pursuing market-oriented economic
reforms. A few days after Mr. Brown left Egypt, the Commerce Department
announced plans to slap import quotas on Egyptian shirts. (Since 1980,
the U.S. has provided almost $30 billion in foreign aid to Egypt.)

Commerce's announcement sparked a furor in Cairo and threatened to
throw a wrench into the delicate Middle East peace process. The U.S.
government put on a full-court press, even sending its chief textile
restriction negotiator, Jennifer Hillman, to Cairo. James Pringle of
the American Chamber of Commerce in Egypt observed: "The Egyptians were
shocked. This has disrupted an industry that had a bright future and
showed all the private-sector initiative that the U.S. has been trying
to encourage in Egypt."

Since 1980, the U.S. has given the government of war-wracked El
Salvador more than $4 billion in aid, much of it targeted to developing
a viable private sector. Yet, on May 9, the Commerce Department
announced plans to restrict Salvadoran exports of men's shirts.

Other countries are being caught in the Clinton administration's rush
to close U.S. borders. On June 1, Commerce announced plans to impose
quotas on silk-blend men's and boys' coats and jackets from Hong Kong.
On May 27, Commerce banned Kuwait from exporting bed sheets to the U.S.
and imposed a new quota that will force Kuwait to slash by more than
six million the number of shirts it may export to the U.S. On May 18,
Commerce announced plans to impose quotas on mens' and women's coats
from Oman. On May 13, the U.S. announced plans to impose quotas on
cotton skirts from Pakistan. On March 11, Commerce imposed import
quotas on women's wool trousers and slacks from Burma.

Worst of all, the Clinton administration will likely seize on fine
print in the GATT agreement to deny American consumers any significant
benefit from textile trade liberalization for the rest of the century.
(The agreement called for the phasing out of import quotas over a
10-year period.) Clinton administration policy makers have finagled
numbers and exploited loopholes so that the U.S. government will
continue protecting the domestic textile industry far longer than most
experts expected at the time the GATT agreement was signed. This will
mean that American consumers will pay tens of billions of dollars in
higher clothing prices in the coming years than they otherwise would
have paid.


Mr. Bovard writes often on trade.