How Free Trade Agreements Affect the Apparel Industry

As a result of free-trade agreements and rising prices of Asian manufacturing, U.S. textile and clothing makers are seeing a boost.

According to Apparel News, production of U.S. man-made fiber and filament, textiles, and apparel shipments reached almost $75 billion. That's an 11 percent increase from 2009.

This comes after U.S. apparel manufacturing took a hit during the '90s and early '00s due to overseas competition.

"It has been a fairly stable and strong environment for about five or six years," Augie Tantillo, president and CEO of NCTO, a trade group that represents textile companies in the U.S., told Apparel News. "But the market has been flat for 18 months due to sluggishness in the global and U.S. economies, and the uncertainty in the retail sector."

Yarns and fabrics accounted for $30.3 billion of exports, and apparel reached $12.7 billion.

Apparel News also noted that NAFTA has a big role in the changing tides of apparel and textile revenue:

One of the U.S. textile industry’s saviors has been free-trade agreements that require that regional yarns and fabric be used in production. If you look at the $13 billion man-made fiber, yarn and fabrics exported from the United States, a big chunk, $4.4 billion, is sent to Mexico, $1.6 billion is shipped to Canada, and another $1.3 billion is earmarked for Honduras. The Dominican Republic receives $759 million in shipments. All these countries are members of either the North American Free Trade Agreement or the Dominican Republic Central America Free Trade Agreement.

Textile producers would theoretically have a lot to gain from changes to NAFTA, because it would get rid of trade-preference levels.