TRADE SNAGS. State Department says Moscow must reduce cotton export
The United States is clamping down on imports of Soviet cotton fabric. The State Department on Wednesday sent a formal note to the Soviet Embassy that said Moscow will be allowed to export only 4.4 million yards of cotton fabric to the US over the next 12 months until an agreement is negotiated. The Soviet Union now exports nearly that amount each month.
The US also told the Soviets that it would like to resume negotiations next month. Talks ended two weeks ago without any agreement.
Boris Malhakhov, a spokesman for the Soviet Embassy, confirmed receipt of the note but said the embassy had no reaction yet to the US move. US grain growers, however, are concerned that the Soviets will use the cotton limits as an excuse to break an agreement to buy $1.5 billion in US grain.
Mark Goodin, press secretary for Sen. Strom Thurmond (R) of South Carolina, called the US actions ``bittersweet - some action is better than none.'' With textile imports soaring this year, he compared the US action to asking a runaway freight train to slow down.
Rep. Butler Derrick (D) of South Carolina says he is glad that the administration is finally taking action to deal with the situation. But Representative Derrick, who is head of the textile caucus, adds, ``I don't think we should have any Soviet textile goods here as long as it is taking away American jobs.''
When the US and Soviets meet again at the end of August, he says, he hopes any new quota worked out for Russians goods ``is as low as possible.''
Mr. Goodin of Senator Thurmond's office says he believes the move will not assuage resentment in the South over imports. ``There won't be any somersaults in Laurens, S.C., over this decision,'' he says. Laurens is a big textile center in the South.
But, in Clinton, S.C., about eight miles from Laurens, Bob Hooks, a plant manager at Clinton Mills, says, ``It's never too late to take action.''
Robert Laidlaw, president of the American Textile Manufacturers Institute (ATMI), disagrees, saying, ``The administration once again has closed the barn door after the horse has escaped.''
Mr. Laidlaw asks, ``What will happen next week if the Soviets decide to ship some other product?''
The US action comes at a time when cotton sheeting fabric is in tight supply. The fabric in its unfinished state is called ``greige goods.'' It is shipped to converters who dye it and finish it before sending to apparel manufacturers. It is frequently used in making women's sports clothes. A textile executive, who does not want to be named, says his company is temporarily shelving plans to introduce a new line of clothing because it is unable to get the raw material to make the clothes.
One indication of the tight supply is the price. According to the ATMI, the Soviets are ``dumping'' the fabric in the US at 31 cents a square yard. The current market price for the goods is 71 cents a square yard. But textile executives say some of the product is changing hands at more than 90 cents a square yard.
The US move comes at a time when Congress is considering textile legislation that would freeze textile imports at 1986 levels. According to Derrick, 250 members in the House are now co-sponsors.
If the legislation were to survive an almost certain presidential veto, this would cut Soviet imports considerably. The Russian cloth started arriving in large amounts only at the beginning of this year.