If face masks and other critical textile supplies will be made in the U.S. for the long term, the industry will need the government’s help.
Testifying before a U.S. International Trade Commission (USITC) hearing on personal protective equipment (PPE) and the Covid-19 pandemic, Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), called for a review to ensure the federal government is purchasing compliant products to help frontline workers.
While NCTO strongly supports Berry-compliant purchasing requirements and the Defense Logistics Agency’s engagement to maximize the domestic supply chain, “we have concerns and questions related to the acquisition strategy and the enforcement mechanisms to ensure that the delivered products are Berry compliant and capable of meeting performance requirements,” Glas said.
The Berry Amendment is a federal regulation that requires Department of Defense funds to be spent on U.S.-manufactured items in order to protect the United States industrial market. The Berry Amendment is intended for companies that wish to acquire Department of Defense contracts.
“The need for the relevant government agencies to coordinate more closely in order to communicate federal PPE needs clearly, consistently and precisely is essential,” Glas said. “These purchases require the full vetting process to ensure producers are qualified to manufacture the quality products necessary, at the volumes required, within specified deadlines.”
As private-sector partners, textile firms need more transparency and coordination with federal procurement agencies to ensure that domestic efforts to meet PPE demands are effectively maximized with quality products that the healthcare sector requires, Glas said. Amid the devastating challenges of responding to Covid-19, NCTO members have been at the forefront of deploying manufacturing resources to address the critical need for PPE, she added.
“Our members quickly mobilized, proactively retooling production lines and retraining workers to provide U.S.-made PPE to frontline medical workers,” Glas told the committee. “These American companies put aside competitive differences to construct multi-company PPE supply chains virtually overnight. In doing so, they were able to manufacture and supply hundreds of millions of urgently needed items, including face masks, gowns, and the textile components needed to produce them, at a time when global competitors failed to supply our national needs. Despite these heroic efforts to confront the ongoing crisis, the onshoring of a permanent PPE industry will only materialize if proper government policies are implemented to incentivize the long-term investment needed to sustain PPE production in the United States.”
In order to understand America’s PPE predicament, Glas said it is necessary to acknowledge “China’s overwhelming and destructive dominance of global PPE markets.”
“China’s explosive growth in PPE production has been fueled by the same predatory practices they have utilized to dominate global textile and apparel markets in general,” Glas said. “Their ‘Made in China 2025’ industrial policies were designed to nationalize and corner market share for these products, and these sectors have been bolstered by massive government subsidies. In addition, the issue of forced Uyghur labor has played a major role in China’s massive growth in PPE output and exporting.”
Despite this massive surge, China instituted export controls that exacerbated global shortages of PPE at the height of the pandemic, she said. This triggered a “catastrophic chain of events, including price gouging and hoarding on the part of nations and hospital systems, as the global supply of PPE fell dramatically short of surging demand,” Glas said. “These devastating shortages were deliberately contrived by a monopolistic supplier that either for health, economic, and/or strategic purposes decided to deny the U.S. access to lifesaving PPE. China’s actions forced the U.S. to pay an enormous price for our unwise dependence on them as our chief supplier of PPE.”
Turning back to domestic policy flaws, Glas said a lack of long-term federal contracts–virtually all federal PPE contracts during the pandemic have been restricted to short-term durations, averaging just 90-120 days–has had a chilling effect on U.S. investment, as domestic textile manufacturers are reluctant to shoulder additional risks while simultaneously struggling with a historic downturn in traditional business resulting from Covid-19.
“Our industry wants to make significant investments in automated equipment to produce PPE, but manufacturers need longer-term, three-to-five-year contracts to justify that investment,” she told the ITC. “Providing a credible quantification of future PPE needs through long-term contracting will help afford the assurances needed to incentivize investment in textile-based PPE manufacturing.”
The lack of domestic sourcing requirements for PPE has resulted in the rejection of numerous U.S. manufacturing bids to supply these products, Glas said. This absence of federal domestic purchasing requirements creates further uncertainty as to whether there will be a stable, long-term demand for U.S.-made PPE, she stressed.
“Applying strong procurement rules, such as the Berry Amendment that governs military textile purchases, will unequivocally lead to investments in this sector and help onshore a PPE industry,” Glas said. “The recent disruption in global PPE supply caused by China proves that PPE self-sufficiency is a national security matter and justifies the need for domestic purchase mandates.”
In addition, the full force of the country’s investigative and enforcement capabilities must be unleashed to eradicate illegal and unfair trading practices related to PPE imports, she said. This would include vigorous enforcement of anti-dumping and subsidy rules, steps to block the importation of counterfeit goods that falsely claim compliance, and a full-fledged effort to identify and embargo PPE made with illicit labor, including modern slavery and child labor.
Beth Hughes, vice president for trade and customs policy at the American Apparel & Footwear Association (AAFA), said its members also rallied quickly to repurpose facilities, factories and supply chains to produce and quickly distribute PPE and other urgently needed medical material.
Hughes said AAFA also wants to “make sure the products coming in are not counterfeit or fake.”
“We support a national face mask usage standard to protect retail employees and customers across the country, as well as remove any confusion amongst U.S. consumers regarding local face mask requirements,” she said.
Much has been written about the need to reshore PPE supply chains because, among its many lessons, “Covid-19 has taught us that global supply chains are often fragmented and subject to sudden shocks,” she added.
“We’ve joined the chorus in urging for policies that will help promote more U.S. production, either alone or with allies, of PPE,” Hughes said. “A strong industrial base requires long term and consistent domestic demand signals from the U.S. government. Now more than ever, as we are in the midst of a global health crisis, it is abundantly clear that we need strong direction and partnership with our domestic manufacturers. However, as we saw over the last few months with the Strategic National Stockpile, manufacturers, especially our government contractors, were met with conflicting and changing signals as they tried to navigate RFPs for reusable and disposable gowns. That is just one relevant example and as the need for PPE continues, the need for direction is more critical than ever.”
It may also be possible to promote more domestic manufacturing by modifying government procurement requirements, although “we should be careful to make sure that those actions do not violate our international trade obligations or trigger unintended trade consequences,” Hughes said.