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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Knocked Out By Nafta Garment Maker Blames Trade Agreement

From Staff And Wire Reports

A side effect of the North American Free Trade agreement can be readily seen at K-L Manufacturing Co.’s plant in Post Falls. No one works there - it was idled in 1996.

For Mike Doohan, owner of the custom garment maker based in Spokane, NAFTA was the latest in a string of government trade maneuvers that have bled his industry slowly to death.

“When I bought this company in 1968, there were 4 million sewing operators in the U.S.,” he said. “It’s less than 900,000 now.”

Doohan received a reprieve from what he perceives as a calculated policy to hurt domestic garment making.

He signed a three-year contract this week with L.L. Bean to make fleece pullovers. Too bulky to be shipped profitably into the United States from the Pacific Rim or South America, fleece has given jobs back to 90 of K-L’s workers.

Despite this reprieve, the harsh reality remains. For K-L Manufacturing and other Inland Northwest companies, NAFTA has sent jobs and profits to Mexico and Canada instead of stimulating trade across the continent.

K-L Manufacturing clients Levi Strauss Co., and Jansport decided in 1996 to take advantage of dramatically lower labor costs in Mexico and elsewhere around the world, Doohan said.

“In China they’re paying workers $1 for an 11-hour day,” he said. “I can’t compete with that.”

The loss of big contracts put more than 100 of Doohan’s Post Falls garment workers out of work. The plant once employed as many as 145.

The federal government later certified the laid-off employees as victims of increased Mexican imports generated by NAFTA.

K-L Manufacturing is among 14 Idaho companies whose employees have qualified for NAFTA-related job retraining and extended unemployment benefits. The “Transitional Adjustment Assistance” was authorized by Congress to help ease the pain of lifting trade barriers between the United States, Canada and Mexico after Jan. 1, 1994.

U.S. Department of Labor figures indicate at least 2,000 Idaho workers at the certified companies alone have been laid off or forced to work part-time because of NAFTA.

And while the Idaho Department of Commerce’s top international business promoter considers the pact a boon because of the export opportunities it offers, the state’s chief economist concedes that even from the standpoint of jobs it appears to be no better than a wash so far.

“It hasn’t been a disaster, and it hasn’t been a raging success either,” Michael Ferguson said.

David Christensen, administrator of the state Commerce Department’s Division of International Business, credits NAFTA with helping double Idaho’s nonagricultural exports to Canada, from $120 million in 1993 to $245 million in 1995. Analysts figure about 1,200 jobs might have been created as a result.

And while exports to Mexico actually dropped from up to $25 million in the years before NAFTA to about $17 million in 1995, Christensen blames that on the recession in Mexico and devaluation of the peso.

Critics contend NAFTA has cost at least 110,000 and possibly more than 600,000 jobs nationally, while swinging the United States from a $1.7 billion trade surplus with Mexico in 1993 to a record deficit of more than $16 billion last year. The trade deficit with Canada hit $22.8 billion last year, the biggest since 1986.

Cheap Canadian imports were to blame for Channel Lumber Co. shutting down last November after 38 years in Craigmont. During the last year in business the company’s work force was halved to 15 to make 2-by-4s, 2-by-6s and other dimension lumber.

Now only three people remain as Channel Lumber looks for a buyer. The town of 500 depends more on farming than timber, but the loss of any business is a blow.

“We’re trying to find some enterprise that might want to come into this area, use the facilities, at least utilize the buildings and things,” clerk Rena Ball said. “But as far as going back into the wood-products business, it’s really very doubtful.”

Small lumber companies around the Inland Northwest, pinched by Canadian competition and dwindling lumber supply, have closed, with many having their workers file for NAFTA-related assistance for retraining and longer unemployment benefits.

Mark A. Buchanan, a visiting professor at Boise State University who specializes in international trade and investment law, said NAFTA undoubtedly contributes to some business downturns. But it is not the only villain, he said. New technology and global economics also play a role.

“In most cases it’s going to be a variety of factors, and whether NAFTA is large or small depends on the industry,” Buchanan said. “The bottom line is things in this world are changing, probably more rapidly than they ever have.”

, DataTimes ILLUSTRATION: Color Photo

MEMO: This sidebar appeared with the story: NAFTA’S TOLL The Idaho companies certified by the U.S. Department of Labor as having employees who were laid off or forced to work part time because of increased imports from Canada or Mexico since Jan. 1, 1994, when the North American Free Trade Agreement took effect. Each company’s name and location is followed by the number of workers affected and the products involved. Timbercraft/Fulton & Lighty in Hayden Lake; four; pressure-treated lumber and posts. Louisiana Pacific Corp. in Hayden Lake; 1,143; lumber and wood products. Crown Pacific L.P. in Sandpoint; 189; lumber. Salmon Intermountain Sawmill in Salmon; 40; dimension lumber. US Industries/Keystone Lighting in Hayden Lake; 120; fluorescent lighting fixtures. Creative Forest Products in Salmon; two; forest products. Turner and Seymour Mfg. in Bonners Ferry; two; welded chain. Weyerhaeuser Western Lumber in Kamiah; 150; lumber. Medley Co. Cedars Inc. in Santa; five; split cedar rail fencing. Ochoco Lumber Co. in Princeton; 10; dimension and shop pine lumber. K-L Manufacturing Co. in Post Falls; 100; jacket, swimwear and denim backpacks. Dal-Tile Corp. in Pocatello; 80; ceramic products. Professional Manufacturing Inc. in Paris; 70; fiberglass helmets for motorcycles, police and snowmobile use. Channel Lumber Co. in Craigmont; 30; dimension lumber. Associated Press

This sidebar appeared with the story: NAFTA’S TOLL The Idaho companies certified by the U.S. Department of Labor as having employees who were laid off or forced to work part time because of increased imports from Canada or Mexico since Jan. 1, 1994, when the North American Free Trade Agreement took effect. Each company’s name and location is followed by the number of workers affected and the products involved. Timbercraft/Fulton & Lighty in Hayden Lake; four; pressure-treated lumber and posts. Louisiana Pacific Corp. in Hayden Lake; 1,143; lumber and wood products. Crown Pacific L.P. in Sandpoint; 189; lumber. Salmon Intermountain Sawmill in Salmon; 40; dimension lumber. US Industries/Keystone Lighting in Hayden Lake; 120; fluorescent lighting fixtures. Creative Forest Products in Salmon; two; forest products. Turner and Seymour Mfg. in Bonners Ferry; two; welded chain. Weyerhaeuser Western Lumber in Kamiah; 150; lumber. Medley Co. Cedars Inc. in Santa; five; split cedar rail fencing. Ochoco Lumber Co. in Princeton; 10; dimension and shop pine lumber. K-L Manufacturing Co. in Post Falls; 100; jacket, swimwear and denim backpacks. Dal-Tile Corp. in Pocatello; 80; ceramic products. Professional Manufacturing Inc. in Paris; 70; fiberglass helmets for motorcycles, police and snowmobile use. Channel Lumber Co. in Craigmont; 30; dimension lumber. Associated Press