China's textile tsunami & the WTO.(The Last Word)(World Trade Organization)

America's economy is coming apart at the seams. Our "twin deficits"--budget and trade--are unraveling the fabric of the economic miracle that was the American free enterprise system. They are also destroying critical defense industries that are essential to our national security. For the past few decades, U.S. policies on trade, taxes, regulations, energy, and the environment have punished manufacturers who want to keep their production lines here and rewarded those who flee abroad, especially to Communist China.

Our trade deficit for 2004 hit an astounding $665.9 billion, up a blistering 25.5 percent from 2003. From all indicators, 2005 will be even worse. The Commerce Department announced on March 11 that the U.S. trade deficit hit $58.3 billion in January, the second-highest in history, topped only by the $59.4 billion deficit set in November. By far, the largest chunk of our January trade deficit was with Communist China--$15.3 billion.

Of particular note are the new figures showing China's stepped-up attack on America's textile and apparel industry. What for years was already a devastating flood is now building into a catastrophic tsunami. Thanks to U.S. adoption of the WTO's Agreement on Textiles and Clothing, quotas and tariffs on imported textiles were lifted in January. Surprise! China had an armada of container ships queued tip ready to unload a tidal wave of textiles and clothing. Its export of cotton trousers to the U.S. in January soared 1,000 percent compared with the same period a year ago. Overall, China's share of the U.S. textile and apparel market surged 75 percent from December, hitting $1.8 billion in January.

"This surge of imports from China is just the tip of the iceberg. If history is any indication, Chinese imports will continue to soar until they gain a virtual monopoly of the US market," says Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. If Mr. Tantillo is right, hundreds of thousands of U.S. workers in the textile and clothing industries will soon be out of jobs, and America's trade deficits will continue to soar.

American jobs and our overall economic picture are very important issues, of course. However, there is another side to our accelerating trade crisis that is rarely mentioned. Can we really allow ourselves to become dependent on foreign sources (even hostile sources) for items that are vital to our national security and defense?

Mr. Smyth McKissick addressed this crucial question in testimony he presented to the U.S.-China Economic and Security Review Commission on January 30, 2004. Mr. McKissick is CEO of Alice Manufacturing ...