Hue and Cry Over Jenkins

Last month, by a vote of 262 to 159, the United States House of Representatives passed the Jenkins bill, a measure that would impose severe quotas on textile imports to the U.S. Reaction from the local press was strong and swift. Headlines read "Jenkins Bill Rocks Stock Market; Textiles Take A Tumble," Jenkins Bill An Unparalleled Threat To Taiwan," and "Textile Industry Fights For Life."

The Jenkins bill, according to a Los Angeles Times poll, has strong support in the U.S. Against a background of a massive trade deficit and hard times and high unemployment in the textile industry, 51% of those surveyed favored passage of the measure. It is aimed at Brazil and a host of Asian countries, especially the ROC, South Korea, and Hong Kong. If it becomes law, the Jenkins bill would reduce textile exports from Taiwan to 58.2% of their present level, throw over 70,000 people out of work, and deal a severe blow to the island's textile and related industries.

Observers note that the U.S. textile industry has been declining for several years, due in large part to competition from cheaper foreign products. To expect U.S. textiles to revive behind tariff walls is both impractical and uneconomical for the American consumer.

CBS reporter Wyatt Andrews has said, "(The Jenkins bill) could be an American disaster. The billions of dollars Asians make by selling clothes to America is the same money they use to buy American-made machines, to purchase American grain, to import McDonalds. Congress might protect the textile industry, but eventually other Americans will pay."

Imports from countries not covered under the Jenkins bill would probably replace those that now come from the affected nations. And, points out an industry expert here, their products will not be of the same quality as the clothes that face possible exclusion. The market shares that the various Asian countries have in the U.S. are the result of intense competition, both with U.S. makers and each other.

President Reagan has promised to veto the bill. Statistics show it would cost the U.S. an extra US$14 billion per year, with most of this burden falling on middle- and low-income families.

Whether the Jenkins bill would help U.S. makers remains to be seen. Several import considerable amounts of material for their production, and could be adversely affected by passage of the bill. They and other groups, such as import-export associations, consumer groups, and shipping concerns are targets of a strong lobbying campaign against the bill now being waged by delegations from the ROC and other affected countries.

The House vote marks only a chapter in the story. The Jenkins bill failed to pass by the 2-1 margin needed to override a presidential veto, leaving its future uncertain. In addition, over 200 other protectionist measures await action by Congress, whose behavior as the election year of 1986 approaches remains difficult to predict. The prospect of similar legislation has sent jitters through many developing countries. Vincent Siew, Chairman of the Board of Foreign Trade, says, "I do not believe retaliation is the best way to solve trade difficulties. But if our exports decline, cutting back our imports would be unavoidable."

[Picture Caption]

Textile makers discuss strategy on how to defeat the Jenkins bill. Pictured above is Far East Textiles Chairman Hsu Hsu-tung.

Textiles are the second largest export of Taiwan. With bargain basement prices, the island has little to fear from foreign competition.

Textiles are the second largest export of Taiwan. With bargain basement prices, the island has little to fear from foreign competition.