INVESTMENT CRUCIAL TO U.S. TEXTILE RECOVERY
  With more private investment, not more
  protection, the U.S. textile industry could become competitive
  with the most modern foreign producers, analysts from two
  congressional agencies said today.
      The Office of Technology Assessment, a nonpartisan arm of
  Congress told a House Ways and Means Trade Subcommittee hearing
  there was still concern for the future of parts of the U.S.
  textile and apparel industry, but there was more reason for
  optimism than a few years ago.
      "While textile producers are making significant
  investments, they could do more," OTA analyst Henry Kelly said.
      The Congressional Budget Office (CBO), the nonpartisan
  budget analysis arm of Congress, said federal loans or loan
  guarantees would be preferable options for Congress rather than
  increased trade protection which could lead to foreign
  retaliation.
      CBO analyst Edward Gramlich said past trade protections,
  first imposed in the 1950's have had only a small benefit for
  profits and investments of domestic firms.
      Trade Subcommittee chairman, Rep. Sam Gibbons, said the
  agencies analyses seemed to agree with his opinion against
  congressional approval of protectionist textile quota
  legislation aimed mainly at Western Europe, Japan and other
  Asian textile producing countries.
      President Reagan last year vetoed a textile protection bill
  but it was reintroduced in this session of Congress and is
  expected to be voted on in the House this year.
      However, approval this year is in doubt because passage of
  a major trade bill without specific protections for textiles
  showed a weakening of support for the legislation.
      Most U.S. producers have fallen behind other foreign
  producers in the use of modern textile and apparel production
  equipment and net imports are growing faster than the domestic
  markets, Kelly said.
      He added that private investment in the textile and
  clothing industry in 1983 of 0.5 pct was less than one-seventh
  the average manufacturing investment of 3.9 pct.
      Despite existing import quotas and tariffs, imports of
  textiles grew 26 pct in 1986 and imports of apparel grew 14 pct
  while U.S. production rose only 1.9 pct.
      "The traditional industry seems destined to be replaced by
  new technology, imports, or some combination of both. While the
  industry may not be able to compete in all domestic markets
  that it enjoyed twenty years ago, the results of our research
  indicate that portions of the domestic market can be recovered,
  and that exports can be expanded," Kelly said.
  

