Printer Friendly

SPRINGS INDUSTRIES CHAIRMAN AND CEO TESTIFIES IN SUPPORT OF THE NORTH AMERICAN FREE TRADE AGREEMENT

 WASHINGTON, May 6 /PRNewswire/ -- Walter Y. Elisha, chairman and CEO of Springs Industries (NYSE: SMI), Fort Mill, S.C., testified today before the U.S. Senate Commerce Committee in Washington. The full text of his testimony in support of the North American Free Trade Agreement follows. Springs Industries manufactures and markets products for the family, home and industry. The company operates 40 manufacturing plants in nine U.S. states, with a minority interest in joint ventures in Germany and Japan. Springs employs about 20,000 people and had consolidated sales in 1992 of almost $2 billion. The company is one of South Carolina's largest industrial employers.
 Mr. Chairman, my name is Walter Elisha. I am chairman and chief executive officer of Springs Industries of Fort Mill, South Carolina. I appear today as a member of the Business Roundtable, its International Trade Task Force, and also as second vice president of the American Textile Manufacturers Institute. Both of these organizations, among, of course, many others, ardently support the North American Free Trade Agreement.
 I am also a member of the President's Advisory Committee for Trade Policy and Negotiation, and I hasten to add that my company, with sales of $2 billion annually, is the largest industrial employer in the chairman's home state of South Carolina. I appreciate the opportunity to appear before your committee today in these roles, and I will be brief in telling you why my colleagues at Springs, the overwhelming majority of the directors of the American Textile Manufacturers Institute, the Business Roundtable, the more than 1,300 member firms and associations that have joined USA/NAFTA, and countless others join me in supporting this milestone trade agreement.
 The NAFTA will bring a tremendous improvement over our current relationship with Mexico. There are, I believe, at least five vitally important ways in which NAFTA will improve on the status quo.
 First, the North American Free Trade Agreement creates a trading zone of 360 million North American people -- a number larger than the European community. The people of three countries -- Mexico, Canada, and the United States -- will benefit. A wider array of products of higher quality and greater value will be available to consumers throughout North America; and, as a result, more jobs will be created, resulting in a better quality of life.
 NAFTA will make the businesses of all three nations more competitive. Already we see firsthand evidence of that with the existing Canadian Free Trade Agreement. We also see firsthand evidence of the benefits of liberalizing trade with Mexico. Before Mexico began to open its markets in 1986, we had a closed trading relationship with Mexico. Mexico had enormous barriers to our exports. This caused a bilateral trade deficit -- $4.9 million in 1986 -- and real job losses due to trade with Mexico. Since Mexico has partially liberalized its trading system, beginning in 1986, our bilateral trade balance has improved by $10.3 billion to a surplus of $5.4 billion -- creating more than 225,000 net U.S. jobs. Despite these gains, Mexico has only partially liberalized; it still has tariffs that are 2 1/2 times as high as ours on average, as well as onerous nontariff barriers. NAFTA, by finishing the partially complete Mexican liberalization process, will lock in the jobs that have been created so far and generate new ones through new U.S. exports. As Secretary of Labor Robert Reich has stated: "U.S. workers have little to fear from NAFTA, and much to hope for."
 Secondly, the NAFTA will create more and better jobs than currently exist in all three of these countries and, in all likelihood, in each of the three countries. Virtually all of the studies -- including those conducted by independent research firms for the Department of Labor and the International Trade Commission -- demonstrate that the United States will show a net gain in jobs. Some jobs in some sectors will inevitably be lost, and we all need to be concerned about how the elimination of these jobs, for whatever reason, causes pain; but we must also keep in mind two critical factors. First, the absence of a NAFTA gives no assurance that certain jobs may not disappear anyway; and, secondly, we have a duty to be certain that the long-term strength and viability of the 109 million jobs in America continue to exist.
 At Springs, we expect to add more than 900 jobs in the United States just to meet the anticipated demand as a result of more open trade with Canada and Mexico; and we have no plans to move anything to Mexico.
 Thirdly, the NAFTA can be an important counterbalance to the trading blocs in place or emerging in Europe and Asia. Without NAFTA, our own markets can be increasingly served by the high-tech and developing economies, particularly those in Asia, where U.S. products and services continue to be held at bay. The markets and the talents of Canada, Mexico and the United States can be shared in a fashion through NAF that makes the economic total far stronger than the simple sum of the parts; and please remember that, if rejected by the United States, Mexico can easily turn to other parts of the world for investment and economic growth.
 Fourthly, NAFTA will provide the framework for extending more open trade to the rest of the Western Hemisphere. I believe it important that we build markets incrementally where issues of geography, culture, reciprocal access, and commonality make sense. An extended North American Free Trade Agreement will be an important first step toward more open hemispheric and even world trade, allowing other nations time to gain experience, stabilize their economies, and build market alliances. Even now, we know that the Caribbean Basin countries are quite interested in joining NAFTA; and, as you know, Chile, Guatemala, Colombia, and Venezuela have signed trade agreements with Mexico.
 Fifth, the NAFTA will bring resources to bear on the environmental and immigration concerns we have heard so much about. Without trade and investment, Mexico, in particular, will be unable to develop its infrastructure, create good jobs to keep its people at home, or improve its enforcement of what are now strong environmental laws. NAFTA, by the way, is already the greenest trade agreement ever written. Even though there continues to be heated debate over the structure, scope and authorities of the NACE, major environmental groups are now recognizing that there will be better protection of the environment under the NAFTA than if NAFTA were defeated.
 Let me close by addressing four specific issues regarding NAFTA:
 -- First, enforcement is the key. NAFTA is a good agreement, and its customs provisions are strong. What remains, of course, is the need to equip U.S. Customs with the resources needed to do the job. This committee can play a vital role in seeing that this funding is available.
 -- Secondly, the recurring theme that jobs in apparel and other industries will be lost to Mexico needs to be tempered. The fact is that American companies can go to Mexico today to obtain lower labor rates under the "807" regulation. American companies can assemble U.S.-made parts offshore and return the finished products to this country and pay duties only on the value added. So, American companies do not have to wait for NAFTA if their only goal is lower wages. We will always lose the lowest-paying, least-productive firms in any industry. That is the free-market system, and we should not let emotional rhetoric mask the truth that trade and business are about serving markets.
 -- Which brings me to my third point, which is specific to textiles and apparel and speaks to the differences between the two. My industry -- the textile industry -- has one of the highest rates of capital spending and productivity improvement over the past fifteen years of any American business sector. We are the most productive textile manufacturers in the world because of our people and our technology. We do not need to produce fabric in Mexico in order to compete. The American textile industry will have the opportunity to supply fabric to apparel producers in Mexico,th opportunities for U.S. textile producers, whether they sell an ingredient product, such as fabric for apparel, or consumer home furnishings for retail markets that will grow rapidly.
 -- Finally, let's keep this trade agreement with our closest neighbors in perspective:
 the Gross Domestic Product of the United States is $6 trillion;
 Canada's is $552 billion (less than the State of Califor$7 trillion; 87 pe nt of which is accounted for by the United States, and just 5 percent by Mexico. To suggest that American companies will rush to Mexico because of lower labor costs grossly oversimplifies site selection criteria for manufacturing companies such as access to raw materials, access to market, energy costs, and other manufacturing costs, while grossly underestimating the resourcefulness of American business people. Those American businesses that want or need lower labor costs can already migrate to other nations. The North American Free Trade Agreement will not add to that exodus.
 NAFTA is not only a good trade agreement, it is the right thing to do. Ensuring a prosperous and stable Mexico and stronger Canada will help ensure a strong peaceful hemisphere. We will always be close neighbors, NAFTA or not, sharing thousands of miles of borders with Mexico and Canada. Mutually strong and interdependent neighbors under NAFTA are clearly preferable to what has been our history without NAFTA.
 NAFTA will:
 -- create a trading zone for 360 million people,
 -- create more and better jobs,
 -- be an important counterbalance to trading blocs elsewhere,
 -- serve as a framework for extending hemispheric trade,
 -- bring resources to bear on the environmental and immigration
 concerns.
 I urge your support of this Agreement and welcome your questions.
 -0- 5/6/93
 /CONTACT: Robert E. Slough, Director-Public Relations, Springs Industries, Inc., 803-547-3738/
 (SMI)


CO: Springs Industries, Inc. ST: South Carolina IN: TEX SU:

CM-SB -- CH008 -- 5618 05/06/93 16:07 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 6, 1993
Words:1666
Previous Article:THE PRUDENTIAL TO OVERSEE WORLDSPAN RESIDENTIAL RELOCATIONS
Next Article:AMOCO'S EARLY, CARL ADDRESS SAN FRANCISCO ANALYSTS
Topics:


Related Articles
Nonwovens industry favors successful negotiation of U.S./Mexico free trade agreement.
TEXTILE LEADER CITES NEED TO SUPPORT EDUCATION IN SOUTH CAROLINA
TEXTILE INDUSTRY USES QUICK RESPONSE AS COMPETITIVE EDGE
SPRINGS INDUSTRIES ANNOUNCES MAJOR EXPANSION OF HOME FURNISHINGS BUSINESS IN CANADA
SPRINGS INDUSTRIES ANNOUNCES MAJOR EXPANSION OF HOME FURNISHINGS BUSINESS IN CANADA
TEXTILE INDUSTRY ASKS CONGRESS TO WRITE KEY NAFTA PROVISIONS INTO LAW
SPRINGS INDUSTRIES CHAIRMAN TELLS ANNUAL MEETING CHANGES CONTINUE TO BETTER SERVE NEEDS OF CUSTOMERS, SHAREHOWNERS AND ASSOCIATES
SPRINGS INDUSTRIES REPORTS ON ANNUAL SHAREOWNERS MEETING
ELISHA SAYS NAFTA HAS SPURRED EXPORTS OF U.S. TEXTILES, GROWTH OF TEXTILE INDUSTRY
BUSH TAPS TEXTILES EXECUTIVES FOR TRADE ADVISORY COMMITTEE.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters