Despite an epic recession that has caused worldwide trade to contract dramatically, U.S. exports of nonwoven roll goods (categorized under Harmonized Tariff Schedule code 5603) rebounded from a weak 2007 to grow nearly 4% in 2008, reaching some 269 mil- lion kilograms shipped abroad. At the same time, the volume of U.S. imports of these goods, which reached a record high in 2007, fell precipitously, shrinking some 10% in 2008 (see Table 1).
Even better, American roll goods exports also grew in terms of worth, increasing some 11% to more than $1.4 billion last year—a new record (see Table 2). Meanwhile, the value of U.S. imports of these goods fell almost 4% to $775.8 million in 2008.
Of course, the U.S. nonwovens industry is not the only domestic sector to post export gains as of late—in fact, modest but steady growth in U.S. exports coupled with a recession-driven decrease in demand for foreign products recently narrowed the U.S. trade gap to its smallest point since 1999. But even still, the gains represent an important comeback for U.S. nonwoven roll goods, which alarmingly defied other U.S. industry export trends and a near decade of steady growth to decline some 5% in 2007. What's more, domestic nonwovens have managed a rally at a time when many other segments of the U.S. textile and apparel sector have been posting declines.
While it is still too early to say whether the 2008 numbers signal an enduring trend especially considering the global economy's continuing volatility, it's useful to review the data to better understand potential chal- lenges as well as future opportunities.
As Table 3 shows, less than half of U.S. roll goods exports in 2008 stayed in the U.S.-North America Free Trade Agreement (NAFTA) region, continuing a steady decline since 2002, when nearly 60% of all U.S. roll goods exports remained in North America.
So where are the rest of these nonwovens headed? Despite some concerns about U.S. competitiveness against cheap Asian imports, a survey of the "Top 10" export destinations in Table 4 (which account for more than 80% of imports) reveals that more than 25% went to destinations like China, Hong Kong, Japan and Thailand last year. China, in fact, was again the third largest recipient of U.S. nonwovens in 2008, accepting nearly 10% more than it did the year before.
In addition, the number of export desti- nations grew from 118 in 2007 to 120 in 2008, with 81 countries receiving more than the year before, including 26 nations that received more than 1 million kg. Some showed particularly dramatic gains, including Chile (up 450% to 3.9 million kg), Australia (up 53% to 3.2 million kg), Brazil (up 89% to 2.8 million kg), Colombia (up 95% to 2.3 million kg) Malaysia (up 132% to 2 million kg), South Africa (up 150% to 1.9 million kg), Luxembourg (up 72% to 1.7 million kg) and Costa Rica (up 85% to 1.2 million kg).
On the import side, 54 countries sent roll goods to the U.S. in 2008. Of these, 26 countries shipped more nonwovens to the U.S. than they had the year before. At the same time, however, 34 nations post- ed losses in 2008, with shipments from places like Saudi Arabia and the U.K. falling by almost 50% or more.
Although China was once again the leading source of nonwoven roll goods imports, the pace of its export growth slowed from 12% in 2007 to just under 3% in 2008. That mirrors an overall slowdown in Chinese imports, which fell to their low- est point in three years this past February.
It's hard to tell and here's why: the Obama Administration's intentions are not totally clear. The White House only recently witnessed the confirmation of former Dallas mayor Ron Kirk to the post of the nation's top trade advisor in March. The new administration is still working to develop and articulate a clear international trade agenda at a time when many world economies are eyeing and some- times adopting "beggar thy neighbor" measures to safeguard what they still have left after economic collapse. U.S. officials and politicians are hardly immune to calls for protectionism, as illustrated by the "Buy American" provisions for domestic iron and steel included in this year's stimulus package.
But even with the uncertainties, recent comments from the administration sug- gest a more tempered approach to trade. Indeed, in his first public speech after being confirmed, Mr. Kirk in April said the U.S. will not turn inward but will place a greater emphasis on making existing agreements work effectively, resolving trade disputes and leveling the playing field for U.S. businesses and workers.
So what does it all mean to the non- wovens industry? From our perspective, the recent trade figures illustrate what we have been telling U.S. officials all along—that our industry is resilient. It has shown time and again that it per- forms both domestically and abroad when others do not because of our innate and widespread product diversity, innovation and excellence. We will con- tinue to forcefully deliver this message as Washington decision makers deter- mine the path forward on trade.
Moreover, given the enhanced commitment to enforcement and ensuring that deals like NAFTA work the way they're supposed to, it will be incumbent upon INDA's Washington office to keep the new administration up to date on any challenges being faced by our industry. To provide input, contact me at email@example.com (703-521-0545) or my colleague Rick Mann at firstname.lastname@example.org (202-434-4229).