A tough U.S. stand in textile talks is casting a long shadow over President Reagan's efforts to start a new round of global trade negotiations, which he says will greatly expand trade opportunities for the world.
Third World nations, which want fewer restrictions on their textile sales, complain that the Reagan administration stance on textiles runs counter to the trade-expanding aim of a new round of global talks. They warn that the United States could lose their support for the talks, which are scheduled to start in September with a meeting of trade ministers at the Uruguayan beach resort of Punta del Este.
Reagan first proposed the global talks in his 1983 State of the Union message, and they have become a cornerstone of his trade policy. He wants to extend trading rules to new areas such as services and high technology, and to strengthen the 93-nation pact that regulates world trade, the General Agreement on Tariffs and Trade, to make it more effective in settling trade disputes.
Many nations that support the Reagan call for new talks, including the newly industrialized countries of Southeast Asia, regard the textile talks as a test of whether the United States, Japan and Western Europe really are committed to free trade.
And countries such as Brazil and India, which are leading Third World opposition to the new talks because of concerns that they will give developed nations a trade advantage in such emerging sectors as high technology and services, also link a more liberal textile arrangement with the global trade talks.
U.S. officials see this as a negotiating ploy, and expect many countries now opposing the global talks to jump on board when it's time to set the agenda for the new round.
But U.S. observers and Asian diplomats say the fate of the new round is tied closely to what happens in parallel talks about a new Multi-Fiber Arrangement (MFA), the international agreement that allows industrialized nations to limit textile shipments from the Third World, whose low wage rates give them an advantage in textile and apparel sales.
"The Reagan administration must put the textile talks in the broader perspective of international trade," said an Asian diplomat whose country favors the new round and is one of the leading suppliers of textiles to the United States.
"The end of the current MFA on July 31 comes at a critical time for the negotiations of a new round. If the Reagan administration pushes too hard in the MFA negotiations, it runs the risk of losing the new round."
The two sets of negotiations -- over the MFA and the agenda for a new round to expand the GATT -- have been linked by less-developed nations despite efforts by the Reagan administration to keep them separate.
"No one is going to sign up for the new trade round until they are assured that the renewal of the MFA will not be more restrictive," said Michael Daniels, a Washington lawyer who represents major textile supplying nations.
With both sets of trade talks heading for July deadlines, it appears unlikely that one will be signed before the other.
U.S. textile negotiator Charles R. Carlisle is acutely aware of the tightrope he must walk to achieve his goals in the MFA talks without jeopardizing the new round of GATT talks.
He also is operating under tough domestic pressures from an industry that says that it has been crippled by imports and that the U.S. stance isn't firm enough.
And Carlisle is negotiating under the gun of a congressional threat to act Aug. 6 to override President Reagan's December veto of a bill that would drastically curb imports of textiles, shoes and copper. The date was set in the hopes that its supporters could gain the two-thirds majority of the Senate and House needed to override the veto if the new MFA is not tough enough to suit the politically potent textile industry.
In his meeting with textile importers, Carlisle continually points out the threat of that bill, sponsored by Sens. Strom Thurmond (R-S.C.) and Ernest F. Hollings (D-S.C.) and Rep. Ed Jenkins (D-Ga.). But some of them are confident that Reagan's opposition will prevent the textile supporters from gaining the two-thirds majority in the House and Senate.
The United States isn't the only country with politically powerful textile industries, all of which want to sell here. U.S. textile negotiators, over the years, report a common theme as talks start: Supplier nations look at the vast stock in U.S. stores and argue that their small amount of shipments will add only a negligible amount.
But all those little bits add up, and textile imports to the United States last year were almost three times as high as they were in 1980, rising from $5.65 billion to $15.1 billion. In the six months between September and February, moreover, imports jumped 28 percent, which was more than the total increase for 1981.
This growth has come at the expense of domestic workers and companies, the U.S. industry complains. The American Textile Manufacturers Institute estimates the import surge has cost 260,000 U.S. jobs in recent years, although other analysts place part of the blame on the industry's modernization program that substituted machines for workers.
But Third World nations, who depend on textile trade for economic growth and that important first step toward industrialization, want fewer restrictions in the new MFA. For instance, Bangladesh, a newcomer to textile trade, has developed subsidiary industries that make buttons, thread, snaps and zippers to support the manufacture of garments for the U.S. market.
Faced with surging imports and domestic political pressure, Carlisle proposed three general objectives for the new MFA: the control of unexpected "export surges"; the addition to MFA coverage of fibers such as ramie and silk, which are being shipped here as blends to evade quotas; and action by textile suppliers to open their markets to American products, especially fabrics that are considered competitive.
Domestic textile companies are angered by countries such as Brazil and South Korea, which continually accuse the United States of protectionism while restricting sales of competitive U.S. fabrics to protect their manufacturers.
In addition, during a swing through Asia, Carlisle asked the leading supplier nations of Taiwan, Hong Kong, South Korea and Japan to hold their shipments to 1985 levels for the next three years. That idea met with universal rejection, even though he said he wanted to transfer those countries' normal growth to poorer countries.
A South Korean diplomat suggested it was unfair that developing countries -- even though they are newly industrialized and well on their way to becoming exporting giants -- should help the poorest countries. He said the United States should demand cuts in textile shipments from Western European nations, which under a "gentlemen's agreement" are not covered by the MFA even though their sales to the United States increased 27 percent last year.
This proposed tightening of MFA rules has made America the Scrooge of the MFA talks, especially since the European Community weighed in early with a proposal for a more liberal agreement.
In a recent interview, Carlisle appeared undaunted by his task. "We need to keep overall growth to moderate levels," he said. "Virtually every country in the world is knocking on the American door. We are trying to be particularly responsible to small suppliers. . . . "
But he acknowledged, "There is resistance to everything we say."
He also has been criticized for failing to put forth specific U.S. demands.
But Carlisle said he is purposely avoiding this, relying instead on "informal" meetings in the GATT headquarters in Geneva of the 15 key textile-importing and -exporting nations. The latest one was held last week.
"I think it would be a mistake if the various important nations -- importers and exporters -- put rigid positions on the table that lock them in," he said. "I want to prevent a deadlock."
The American textile industry says it is also in the dark on the details of the U.S. position in the MFA agreement. But it does not like what it sees. "A strengthened, less vague and less permissive MFA is essential to the continued survival of the American fiber, textile and apparel industries," said ATMI Chairman Carlos Moore in a letter to Carlisle.