News Release

CHAPEL HILL -- A recent survey of U.S. textile manufacturers reveals majority support for an extension to the Agreement on Textiles and Clothing (ATC), which is set to expire Dec. 31.

Details of the survey are analyzed in a new paper by Robert Connolly, associate professor of international finance and economics at The University of North Carolina at Chapel Hill's Kenan-Flagler Business School, and Patrick Conway, professor of economics at the University of North Carolina at Chapel Hill.

ATC ends quantitative restrictions, or quotas, that have limited imports of foreign textiles into the U.S. market. Connolly's and Conway's research reveals the attitudes of 273 U.S. textiles manufacturers about this agreement, and is the most comprehensive assessment of managerial attitudes within the industry to date. It finds that the vast majority of U.S. textiles firms (and in particular, larger, more established ones) are calling for the extension of the ATC past its expiration date at the end of the year, and for further supporting policy measures.

This view, however, is not unanimous. Twenty-four percent of the manufacturers surveyed say that the current ATC agreement has had little positive, and some negative, effect on firm operations. These firms, which tend to be smaller and newer, are calling for no intervention by the federal government.

"Our research shows a wider range of attitudes towards the ATC than was expected," said Connolly. "There are small, more flexible firms interested in a laissez faire approach, or in commercial policy that protects existing advantage, while larger firms favor protectionism at any price."

Summary of survey findings:

· 29 percent of the manufacturers cannot say whether the ATC has been successful in lessening the effects of import competition.

· 65 percent agree that foreign merchandise has captured an increasing share of their market since 1990; 25 percent disagree.

· 90 agree that foreign goods are available at lower prices than their own competing products.

· 56 percent see Asia as the biggest import threat.

· 49 percent "agree" or "strongly disagree" that exchange-rate regimes in foreign countries present an unfair advantage.

· 52 percent report a drop in sales revenue of at least 5 percent since 1997.

For more information, or to receive a full copy of the research findings, contact Stacy Roth-Nobles at 212-931-6162.

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Media Contact: Stacy Roth-Nobles, Peppercom, on behalf of UNC's Kenan-Flagler Business School, 212-931-6162; snobles@peppercom.com