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Summary The primary objective of this study was to assess the future international competitiveness of the U.S. textile complex. To accomplish this objective, a number of steps were undertaken. The first step was to analyze major changes in competitive c onditions in the global textile complex, such as changes in production, consumption, trade, investment, technology, and levels of government intervention. A second step was to ascertain how these changes were affecting the U.S. textile complex, such as its employment, number of firms, profitability, and market share. A third step was to forecast future competitive conditions and their potential dominant, shaping forces. A fourth step was to identify major strategies undertaken or being considered by various enter- prises and governments inside and outside the United States. The final step was to analyze the future strengths and weaknesses of the U.S. textile complex (in terms of its ability to increase its international competitiveness) and suggest options the U.S. gov- e rnment and industry should consider if it seeks to create an environment conducive to increasing the U.S. textile complex's international competitiveness. The major findings of the study were the following: The level and intensity of global competition in the textile complex have increased sharply and are expected to continue to increase in the future. Both consumption and production have increased significantly in developing nations, often at the expense of developed countries. This phenomenon has been particularly true for the apparel segment of the textile complex, although it has been true to some degree for virtually all segments. Th e development and international spread of new tech- nology have accelerated rapidly, especially in recent years in yarn spinning and fabric formation. A major result has been increasing capital intensity and industry concentration levels in the face of higher risks and costs of new product and process development.

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2 Government intervention in the global textile complex has also increased significantly over the past two decades. While general levels of tariff protection have decreased, other forms of trade barriers and government assistance to domestic textile complexes have increased, the latter particularly in developing countries. In developed countries, one major intent of these policies was to slow the reduction in domestic employment caused by increasing import competition. In developing countries, the primary purpose was to expand domestic employment and generate increased export earnings. R elative to its counterparts in Europe, the U.S. textile complex did not suffer as extensively from the combined impact of the trends enumerated above. On the other hand, U.S. per- f ormance, compared with textile complexes in most Asian countries, was not as good, due primarily to the comparative weakness of the apparel segment. However, in some specific segments, notably man-made fiber and yarn production, the U.S. industry continues to hold a competitive position. Various parts of the textile segment fell somewhere in between. ~ general, many firms in the U.S. textile complex are capable of improving their competitiveness, and most of the larger firms are taking many of the steps necessary to increase their competitiveness. However, increasing the international competi- tiveness of the U.S. textile complex will not probably result in increased domestic employment, or even in maintaining existing employment levels. While much of the increased international competitiveness of the U.S. textile complex can result directly from the activities of the firms themselves, changes in a number of U.S. government policies would clearly facilitate the process. In sum, the panel pro jected a more internationally compet i- tive, but smaller (in terms of number of firms and workers), U.S. textile complex in the future, almost regardless of any changes in government policy. Thus, government policies will have their greatest impact on the speed and extent of the changes visualized, rather than the direction of the changes. It was the consensus of the panel that government policy should be directed tower d achieving as orderly a transition as feasible, and that it should be more consistent, proactive, and comprehensive than it has been in the past.