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.