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Trade News Archive - 200712.17.07
The European Union (EU) and a group of eastern and southern African countries reached a new Economic Partnership Agreement (EPA) that will allow African apparel to enter the European market duty-free under the most flexible rules available -- single transformation. The EPA is expected to be implemented sometime in 2008.
12.17.07
CITA has received a petition filed by the National Textile Association to declare certain rayon fibers, other than lyocell, for use in textile filaments, staple yarns and woven fabrics under Chapters 52, 54 and 55 and non-woven and other textile articles of Chapter 56 of the Harmonized Tariff Schedule in "short supply" under the North American Free Trade Agreement (NAFTA). If approved, apparel made in Mexico using textiles made from the subject third-country rayon fibers can enter the United States duty-free. Comments are due January 14. 12.17.07
In a belated effort to comply with its WTO obligations to ensure that all of its current anti-dumping cases against Mexican imports from China complied with WTO rules by a just-passed December 11, 2007 deadline, Mexico has announced reviews of its current anti-dumping cases against Mexican imports of footwear, apparel and textiles (all in Spanish) from China. The Mexican government requests comments from all interested parties by around January 5, 2008. While the comment period for footwear has officially closed, it appears that the Mexican government is still accepting comments. Meanwhile, the current dumping duties, ranging from 300 percent to 1,100 percent, will remain in place. According to informed sources, the Mexican government is in negotiations with China to implement a one-time extension of the current dumping duties for a defined period of time (probably 18 months), after which the dumping cases will be permanently terminated.
12.17.07 On Friday, December 14, 2007, President Bush signed into law the U.S. Peru Trade Promotion Agreement Implementing Act. When the agreement itself enters into force – most likely sometime during early 2008 – it will provide for permanent and reciprocal duty free two way trade between the United States and Peru. Meanwhile, Congress has so far declined to take action to renew the Andean Trade Preferences Act (ATPA), which is currently scheduled to expire on February 29, 2008. AAFA is working with Congress and other policy shapers in Washington to extend this important program to make sure there is disruption in the U.S./Peruvian trade partnership as the U.S./Peru TPA takes effect.
12.17.07
Both the U.S.-China Strategic Economic Dialogue (SED) and the 18th U.S.-China Joint Commission on Commerce and Trade (JCCT) in Beijing, China concluded last week with what U.S. Treasury Secretary Henry M. Paulson Jr. observed as modest improvements in the U.S.-China economic relationship. Both the SED and JCCT also included U.S. Trade Representative Susan C. Schwab, U.S. Commerce Secretary Carlos M. Gutierrez, the U.S. Department of Agriculture along with Chinese Vice Premier Wu Yi. The forum was established to open dialogue between high-level government officials in order to address critical market access, trade and investment issues between the U.S. and China. Both meetings focused on import product safety – especially with regards to food and drugs. The Chinese also agreed to further strengthen their intellectual property rights (IPR enforcement) and improve treatment for foreign investors.
12.17.07
AAFA submitted comments December 10 strongly encouraging the US Department of Commerce (Commerce) to allow individual Chinese firms "Market-Oriented Enterprise (MOE)" status in US anti-dumping and anti-subsidy cases against US imports from China. Because most apparel and footwear factories in China are foreign-owned and operate under free market principles, Commerce must create a mechanism that allows these and other companies to be treated as MOEs in anti-dumping and anti-subsidy cases. 12.17.07
AAFA joined with over 30 other major agricultural and business organizations and companies in sending a December 14 letter to Congressional leaders opposing an effort to re-implement the so-called "Byrd Amendment," which Congress had previously voted to eliminate because it violated US international trade obligations. Certain members of Congress hope to include the measure, which entitles US manufacturers who file anti-dumping cases to the proceeds from those cases when anti-dumping duties are imposed, in an Omnibus Appropriations bill, which Congress hopes to approve this week before adjourning for the year. European imports of US-made apparel, textiles and footwear still remain subject today to punitive import duties because the United States has still failed to fully phase-out the program.
12.10.07
The US Senate on December 4 overwhelmingly approved the AAFA-supported US/Peru Trade Promotion Agreement (TPA) by a vote of 77 to 18. Even though Congress has now approved the US/Peru TPA, the timing for implementation of the agreement remains uncertain. Further, Congressional approval of the US/Colombia TPA remains uncertain at best. As a result, the entire textile and apparel supply chain -- from cotton growers, yarn spinners and fabric mills all the way through to apparel brands retailers -- sent a letter to Congressional leaders December 4 renewing their call for immediate renewal of the Andean Trade Preferences Act (ATPA) before ATPA expires February 29, 2008. The letter also called for quick implementation of the US/Peru TPA and quick Congressional approval of the US/Colombia TPA.
12.03.07
AAFA sent a letter December 3 to every member of the US Senate informing Senators that AAFA has "key voted" the upcoming Senate vote on the US/Peru Trade Promotion Act (TPA) and urging every Senator to vote "YES" on the agreement.
11.19.07 The US government's inter-agency Committee for the Implementation of Textile Agreements (CITA) announced November 14 that they have delayed their decision on whether to impose a safeguard on US imports of socks from Honduras until December 19. A final decision was originally due this week.
11.13.07 The US House of Representatives on November 8 approved the AAFA-supported US/Peru Trade Promotion Agreement (TPA) by a vote of 285 - 132. Attention now turns to the US Senate, where a vote is expected before the end of the year. With the delay in the approval of the US/Peru TPA and no Congressional consideration of the US/Colombia TPA this year, AAFA is urging Congress to pass a renewal of the Andean Trade Promotion & Drug Eradication Act (ATPDEA) before the current trade preference program expires February 29, 2008.
11.05.07 The US House of Representatives on October 31 approved the Trade and Globalization Assistance Act of 2007 (HR 3920), by a vote of 264-157. The legislation would provide job retraining and other assistance to workers who claim they have lost their jobs to globalization. While proponents believe the legislation would overhaul the current Trade Adjustment Assistance (TAA) program to better meet the needs of American workers and communities affected by globalization, many opponents believe the legislation fails to provide effective assistance while imposing significant new taxes to pay for the cost of the legislation. The fate of the legislation is unclear as the Senate has introduced a slightly different bill. 11.05.07
The House Ways & Means Committee approved the US/Peru Free Trade Agreement (FTA) by a vote of 39-0, indicating strong bi-partisan support for the agreement. The full US House of Representatives will vote on the Peru FTA this week. Now is the time to contact your members of Congress and ask them to vote "YES" on the agreement.
11.05.07 On October 31, President Bush signed a seven-year extension of the Internet Tax Moratorium. The House passed the legislation October 30, five days after Senate approval. There was strong support in both the House and Senate for a permanent moratorium, but concerns over the potential long-term impact on state and local governments forced a compromise. Telecommunications companies and online retailers strongly supported a permanent ban, but were willing to accept a temporary moratorium as an alternative to expiration. The Business Software Alliance, the National Cable and Telecommunications Association, the wireless association CTIA, the Telecommunication Industry Association and the U.S. Telecom Association all backed the moratorium. 10.10.07 Contrary to the statements of many in Congress and elsewhere, a new poll released in the October 2007 issue of Policy Options magazine found that 77 percent of Americans now believe that free trade is crucial to the United States' continued prosperity. Well over half of all Americans (55.6 percent) believe that they would be worse off without free trade, while only 19.1 percent of Americans said they would be better off without free trade.
10.10.07
The Senate Finance Committee formally approved the US/Peru Free Trade Agreement (FTA) by voice vote on October 4 as the implementing legislation continues its march towards Congressional approval. House Democratic leaders, however, introduced a potential new hurdle last week, by vowing to pass a controversial reform of the Trade Adjustment Assistance (TAA) program before the House considers the US/Peru FTA. While there is overwhelming support in Congress for an effective TAA program to help those negatively impacted by trade, concerns have been raised about the cost of many of the reform proposals, the effectiveness of many of the TAA programs in existence today and the legislation's incorrect focus on trade as the only cause for loss of jobs. Despite this new hurdle, Congressional leaders believe that Congress will still approve the US/Peru FTA before the end of the month.
10.01.07
Thanks to the efforts of AAFA and many other American and European organizations and companies, the European Commission issued a formal proposal on September 10 to withdraw the European Union (EU) directive that would have required metric-only labels and designations on products sold in the European Union beginning in 2010. The new proposal would allow dual-labeling (metric and inches/pounds) to continue indefinitely. While the EU Parliament and Council of Ministers must still approve the proposal, there appears to be no opposition. Based on a request from the American Chamber of Commerce in Vietnam, Vietnam has announced that it has implemented an apparel export monitoring task force and is considering re-imposing a controversial export licensing scheme, purportedly to ensure that apparel exported to the United States is in no way dumped on the US market. Meanwhile, the US government announced that it has now collected data for the first six months since Vietnam joined the World Trade Organization (WTO) on January 11, 2007 as part of its Vietnam apparel import monitoring program. The US government expects to formally issue the results of its first bi-annual review within the next few weeks. The Senate Finance Committee on September 21 approved the US/Peru Free Trade Agreement (FTA) by an 18-3 vote in a "mock" mark-up. The House Ways & Means Committee will hold its "mock" mark-up this Tuesday (September 25). Once approved by both committees, the Bush administration will formally submit the US/Peru FTA implementing legislation to Congress, hopefully leading to Congressional approval by mid-October. The US International Trade Commission (ITC) issued a new report September 20 that found that the proposed US/Korea Free Trade Agreement (FTA) would have a significant positive impact on the US economy. The ITC found that the FTA would increase the US Gross Domestic Product by $10.1–11.9 billion a year. US apparel imports from Korea, especially for man-made fiber goods for which Korea is a competitive and major supplier and for which the United States maintains relatively high tariffs, would increase modestly under the FTA. However, approximately 85–90 percent of the estimated increase in US imports from Korea would be diverted from other import sources. US exports of textiles and apparel to Korea would likely experience a large percentage increase. Despite the FTA's elimination of relatively high US tariffs on travel goods and footwear, the increase in US imports from Korea is expected to be limited given Korea's decline in production and exports to the United States of such products, as well as the dominance of China in the US market for travel goods and footwear. The House Ways & Means Committee approved a straight three-month extension of the Trade Adjustment Assistance (TAA) Act on September 18. The full US House of Representatives should approve the legislation sometime this week. The US Senate is expected to approve the TAA extension shortly thereafter. The short-term extension allows Congress more time to consider a more comprehensive reform of the TAA program. After over a decade of debate, court cases, Congressional legislation and more, the US Department of Transportation announced September 6 that Transportes Olympic, a Mexican trucking firm, has been cleared to be the first Mexican trucking company ever to operate freely throughout the United States, marking the start of a year-long cross border demonstration project that will ultimately allow US trucking companies to operate in Mexico, and allow up to 100 Mexican trucking companies, upon passage of a rigorous safety inspection, to operate freely in the United States for the first time ever. Allowing cross-border trucking between the United States and Mexico had been originally agreed to as part of the 1994 North American Free Trade Agreement (NAFTA), but has been repeatedly delayed by court cases and Congressional action. Instead, Mexican-owned trucks have been restricted to a 20-mile commercial zone along the US/Mexico border. The pilot program finally moved forward after opponents' last appeal for an injunction to stop the program was denied by the courts. The ultimate fate of the program, however, remains uncertain. The US Senate voted overwhelmingly – 75-23 – on September 11 to approve an amendment to the FY2008 US Department of Transportation appropriations bill that would strip the Department's funding for the cross-border trucking pilot. The US House of Representative had already approved a similar amendment to their version of the appropriations bill. It is unclear if the amendment will survive to become law, though. The overall appropriation bill still must be approved by the US Senate and then reconciled with the House version of the legislation before being sent to President George W. Bush, who has not yet decided whether he would sign the legislation into law or veto the appropriations bill over this and other controversial provisions. The Bush administration has announced that Deputy US Trade Representative Karan Bhatia, the US government's lead trade negotiator for Asia, will be leaving the government shortly to return to the private sector. In other news, President George W. Bush has nominated Chris Padilla to the post of Under Secretary of Commerce for International Trade. In his new position, Padilla will oversee the US government's inter-agency Committee for the Implementation of Textile Agreements (CITA) as well as the US government's application of trade remedy laws (anti-dumping and countervailing duty cases), including the Vietnam textile monitoring program. President Bush also announced that he has named Barry Jackson as Assistant to the President for Strategic Initiatives and External Affairs, the position formerly held by Karl Rove. Mr. Jackson will be responsible for managing the White House offices of Political Affairs, Public Liaison, Intergovernmental Affairs, and Strategic Initiatives. Finally, Rear Admiral William G. Sutton, US Navy (Ret.) joined the US Department of Commerce as Assistant Secretary for Manufacturing and Services at the beginning of August. In his new position, Admiral Sutton will oversee US trade policy regarding specific industries and sectors. The Congressional Research Service (CRS), the research arm of the US Congress, issued a new report July 10 that found that the global clothing and textile market did grow faster over the last two years than before, but there has not been the anticipated sharp shift in production to China. Similarly, while US clothing and textile imports continued to grow in 2005 and 2006, it is unclear if the end of the worldwide quotas was the main cause of that growth. In addition, while anecdotal evidence from the US clothing and textile industry indicates greater competition from China, trade data and industry production levels do not reveal clear evidence that end of quotas was a major contributing factor to the recent loss of employment in the U.S. clothing and textile industry. Effective July 30, the rules of origin for duty-free access of US imports of boxer shorts from Mexico was changed to a more flexible rule of origin (Mexico official notice (with actual rule of origin change -- in Spanish), US Federal Register notice. The Office of Textiles and Apparel (OTEXA) in the U.S. Department of Commerce is recruiting textile and apparel companies interested in doing business in Morocco, either as importers or exporters, to participate in the USA Pavilion at the Morocco Sourcing Show that will take place from November 28 - December 1, 2007 in Casablanca. For additional information or to receive a participation kit, please contact Kim-Bang Nguyen at 202.482.4805.
08.27.07
The Chinese government published a new regulation July 26 that requires companies exporting certain products from China and importing certain products into China to place a deposit of either 50 percent or 100 percent (depending on the license of the company) of the value of the contract with the Chinese government. The Chinese government will refund the deposit at some undetermined point after being provided proof that the contract has been fulfilled. The announcement applies to 1853 export products (most of which are fiber, yarn, fabric and plastics) and over 200 import items (many of which are textiles) (the items -- by HS number -- are available as appendices in the Chinese version of the announcement -- Appendix 1 (export products) and Appendix 2 (import products). The announcement shall take effect for all contracts signed starting August 23. With this announcement, it appears that China continues to attempt to use trade policy to: 1) lower China's trade surplus with the United States and the rest of the world and 2) reduce and/or eliminate polluting or resource-intensive industries. AAFA will share more details as they become available. 08.27.07 According to press reports, the World Trade Organization (WTO) on July 27 preliminarily determined that the United States has not sufficiently complied with a 2005 WTO ruling against US cotton subsidies. If this decision is upheld when a final ruling is issued this fall, it could open the way for Brazil to impose billions of dollars’ worth of retaliatory sanctions against the United states. In the past, US textile and apparel exports have been subject to such sanctions. In this case, US textile and apparel exports would likely be subject to sanctions because US textile and apparel manufacturers exported over $100 million worth of textiles and apparel to Brazil in 2006. 08.27.07 In yet another in a series of measures affecting trade in the apparel and footwear industries, China on July 17 banned, effective immediately, all Chinese imports of wool, claiming that its 2007 wool import quota was full. Australia and New Zealand, the world's two biggest wool suppliers, have questioned China's claim that the 2007 wool import quotas have filled, and have initiated discussions with the Chinese government. Meanwhile, the Senate Banking Committee approved new anti-China legislation (S.1677) on August 1. The powerful House Ways and Means Committee also held a hearing August 2nd covering a wide range of topics related to China in preparation for marking up their own version of Anti-China legislation this fall (AAFA testimony). The future of anti-China legislation remains unclear, however, due to competing legislation in the US Senate and a jurisdictional dispute between the Senate Finance and the Senate Banking Committees as well as the myriad of different anti-China bills working their way through the US House of Representatives. While AAFA shares the lawmakers' frustration that the path toward currency adjustment has not gone more quickly, it notes that slow and deliberate change, rather then abrupt shifts, is the key to predictability to make sure business is not disrupted. AAFA also opposes this type of legislation because it is in direct conflict with World Trade Organization (WTO) rules. 08.27.07 Facing a possible presidential veto and calling into question the US commitment to a successful conclusion of the ongoing Doha Round of global trade negotiations, the US House of Representatives on July 27 approved legislation (HR 2419) authorizing a new five year farm bill on a largely partisan vote of 231 to 191. The bill, which has a price tag of almost $286 billion, would preserve the existing system of subsidies for commercial farmers and add billions of dollars for conservation, nutrition and new agricultural sectors. Despite a rash of World Trade Organization (WTO) cases challenging the legality of the US cotton program, the bill would extend and expand the current cotton subsidies, including the so-called "cotton fee" charged to US importers of cotton apparel. Further, the sheer size of the subsidies included in the legislation further jeopardizes global trade talks already stalled, in large part by the United States' refusal to reduce its agricultural subsidies. The US Department of Commerce has issued interim regulations, effective July 24, implementing an annual tariff rate quota (TRQ) providing for temporary reductions, through December 31, 2009, in the import duties of certain cotton woven fabrics suitable for making boy's and men's cotton shirts. Commerce will issue licenses and ensure that the TRQ is fairly allocated to eligible manufacturers. The licenses will be issued on the basis of the percentage of each manufacturer's quantity of imports of such fabrics compared to the imports of such fabric by all manufacturers that qualify for a TRQ allocation. Comments on the interim regulations are due September 24. The US International Trade Commission (ITC) on July 27 released its report on the level of US production of performance outerwear. According to the report, there is relatively little production of performance outerwear jackets and pants in the United States, as most firms have moved production offshore, primarily to Asia. Thirteen US companies reported producing performance outerwear jackets and pants during the study period. Over one-half of all US production (over 70 percent by value) was shipped to the US military and government. A new report challenges the popular notion that "globalization" has caused the decline in US living standards over the past decade. Instead, the study, by the well-respected Carnegie Endowment for International Peace, found that the decline in US living standards can be traced to US labor laws and the antiquated US tax system, not globalization. The report suggests that creating a better US economic workforce, and not blaming foreigners or isolating the United States from the international economy, will lead to better living standards. The report notes that creating a better workforce will entail the reformation of domestic labor laws and taxes in addition to international economic policy reforms. In a last ditch attempt to save the faltering Doha Round of global trade talks, the World Trade Organization (WTO) on July 17 issued draft negotiating texts on the crucial non-agricultural market access (NAMA) and agriculture aspects of the trade negotiations. The draft texts attempt to forge a compromise between the competing interests of the 150 WTO member countries, particularly among the so-called G-4 countries -- the United States, the European Union (EU), Brazil and India. Under the proposed NAMA text, which includes apparel and footwear, all non-agricultural tariffs on imports entering the United States and other developed countries would be reduced to a maximum of 8 or 9 percent over a period of five years while developing country tariff rates would be reduced to a maximum of 19-23 percent over a period of nine years. Regrettably, the draft text would allow developing countries to either exempt five percent of their imports outright from the tariff reductions or subject 10 percent of their imports to smaller tariff cuts. Least-developed countries are exempted from the tariff reductions altogether. Least-developed countries, however, would still receive duty-free, quota-free access to the United States and other developed country markets for 97 percent of their products. Finally, in order to alleviate so-called "preference-erosion" for US and European trade preference countries (like Africa and the Caribbean), US and European tariffs on imports of certain products (almost all apparel products) would be reduced over a seven-year period, instead of five years. 07.27.07 The response to the June 28 announcement from the House Democratic leadership, which imposed new conditions on their support for Congressional passage of the US/Peru and the US/Panama Trade Promotion Agreements (TPAs) this fall and expressed opposition to both the US/Colombia TPA and the US/Korea Free Trade Agreement as well as extension of Trade Promotion Authority (TPA), in seeming contravention to its May 10, 2007 trade/labor agreement with the Bush administration, has been overwhelming. United States Trade Representative (USTR) Susan Schwab sent a letter to House Speaker Pelosi on July 6 encouraging Congress to move the Peru and Panama agreements in July. Schwab also insisted that Congress should not ignore the free trade agreements with Colombia and Korea. In her letter, Schwab stated that the administration and the trading partners have completed all the steps agreed to in the May 10 bipartisan trade/labor agreement and encourages Congress to step up and fulfill its side of the bargain. In a separate July 2 letter to House Speaker Pelosi, President Alan Garcia of Peru stated that Peru has complied fully with the May 10 agreement. Peru's Congress has already approved the US/Peru Trade Promotion Agreement, including the new text required by the May 10 agreement. Mr. Garcia states in his letter that the US Congress must now take the next action by considering and approving the US/Peru Trade Promotion Agreement this month. Peru will not move forward any further with implementing the agreement until it sees that the United States is committed to the agreement by Congress taking action to begin consideration of the agreement this month. Finally, TGA joined with a number of business organizations in sending a letter July 12 to the House leadership echoing these other two letters by stating that all of the FTA countries have fully met their obligations under the May 10 agreement and pledging to work with Congress to quickly approve all of the free trade agreements, including Peru this month. The European Union (EU) on June 26 published a report summarizing the results of public comments on its proposal to switch to a metric only system by the end of 2009. AAFA had submitted comments in hopes that the metric only system would be indefinitely postponed. According to the EU, there is a widespread consensus for continuing the current system. According to the report, there would be fairly significant and widespread costs if the EU were to change to a metric only system. The report noted that there were many complaints that the US system of permitting non-metric labeling can be construed as a non-tariff barrier. The European Commission is hesitant about an indefinitely postponing the metric-only rule because of the non-tariff barrier imposed by the United States to metric only labeled goods. AAFA hopes that an extension of the current system that would allow continued dual labeling will be put in place smoothly and without much difficulty.
AAFA submitted comments July 5 to the US Department of Commerce in response to a May 25 Federal Register notice regarding the efficacy of granting market economy treatment to select respondents in anti-dumping cases targeting imports from China. AAFA urged the US Department of Commerce to allow such treatment and establish an objective and transparent test to determine whether individual respondents deserve market economy treatment. Currently, China, for purposes of anti-dumping cases, is considered a non-market economy, which means that the US Department of Commerce uses values from a surrogate market economy country (and not actual prices, wages and costs in China) to determine whether companies from China are dumping product on the US market. This practice has typically led to significantly higher dumping margins (punitive duties) against Chinese factories in anti-dumping cases relative to factories subject to anti-dumping cases in market economy countries. 07.10.07
Congress overwhelmingly approved an AAFA-supported extension of the Andean Trade Preferences Act (ATPA) last week. The extension passed by a vote of 365 to 59 in the US House of Representatives on June 27 and by Unanimous Consent (UC) in the US Senate on June 28. The program allows for apparel (under certain rules) and most footwear (under very flexible rules) from Colombia, Peru, Ecuador and Bolivia to have duty-free access to the US market for an additional eight months. President George W Bush signed the extension into law on June 30, just before the current program was set to expire. AAFA, with the unprecedented support of the entire US textile and apparel supply chain, continues to lobby Congress for quick approval of both the Colombia and Peru Trade Promotion Agreements (TPAs). Demonstrating their strong commitment to the trade agreement, Peru's Congress on June 27 overwhelmingly approved (70-38) the new labor/environmental provisions to the US/Peru Trade Promotion Agreement, only two days after the text of these provisions was released.
House Ways & Means Committee Chair Charlie Rangel (D-NY) and Trade Subcommittee Chair Sander Levin (D-MI) joined with House Speaker Nancy Pelosi (D-CA) and House Majority Leader Steny Hoyer (D-MD) in issuing a June 28 statement offering a bleak assessment of the trade agenda for the next year. While the House leadership indicated strong support for Congressional passage of the US/Peru and the US/Panama Trade Promotion Agreements (TPAs) this fall, the leadership expressed its opposition to both the US/Colombia TPA and the US/Korea Free Trade Agreements as well as extension of Trade Promotion Authority (TPA) -- the President's authority to negotiate trade agreements. The President's current trade negotiating authority expired this past weekend (June 30).
The Chinese government reduced or eliminated Value Added Tax (VAT) export rebates on thousands of products starting July 1. For both apparel and footwear, the VAT rebate has been reduced from 13 percent to 11 percent. The VAT export rebate for most inputs such as leather, textiles, rubber and plastics were also either reduced or eliminated. (List of Affected Products by HS Number - Microsoft Excel file) Companies that export a finished product out of China receive (or did receive) VAT export rebates for the finished product as well as for many of the inputs used in that product. China charges a VAT of 17 percent at every level of the product process (i.e. on all inputs) as well as on the final product (i.e. apparel and footwear).
The Senate Appropriations Committee has approved Senator Elizabeth Dole's (R-NC) request for $9.5 million for the US Department of Homeland Security's Bureau of Customs and Border Protection (Customs) to oversee textile transshipments enforcement in the fiscal year 2008 Homeland Security spending bill.
Mexico's Secretaría de Economía has initiated a review of the anti-dumping duty (AD) order on footwear imports from China (in Spanish) for the period January 1 through December 31, 2006. The order, which was originally established in December 1993, imposes AD duties ranging from 165 percent to 1,105 percent on footwear classified in HS headings 6401-6405. Interested parties have until July 27 to submit the pertinent review questionnaire and any supporting documentation. A public hearing in connection with this review will be held on October 15. Every AD duty order currently in place against Chinese products in Mexico as well as any investigations that are pursued by the Mexican government, including the review at hand, must comply with all relevant WTO requirements by December 11, 2007. Otherwise, the Chinese government would have the option of challenging these AD orders before the World Trade Organization's (WTO) Dispute Settlement Body.
The World Trade Organization (WTO) has published comprehensive tariff profiles, which provides detailed information on bound and applied tariffs of the 150 WTO Members.
On June 15, the Government of Vietnam announced that -- as of June 22, 2007 -- it will no longer require an export license for exports of apparel to the United States. This move cancels an interim export license scheme that had been imposed earlier to restrict the export of lower priced apparel from Vietnam. It comes as the U.S. and Vietnam sign a Trade and Investment Framework Agreement on the occasion of the visit of Vietnamese President Triet to the United States last week.
On June 11, the Court of International Trade (CIT) reaffirmed its prior ruling that useful goods may be classified under duty-free provisions of the Harmonized Tariff Schedule of the U.S. as festive articles. In addition, the CIT expanded the types and themes of utilitarian products that may be eligible for such treatment. The court’s decisions on the case of Wilton Industries, Inc. v. U.S. offers the prospect for many importers of a wide range of utilitarian items with holiday or special occasion themes to become eligible for duty refunds. On June 19, Senator Elizabeth Dole (R-NC) introduced a bill to modify the Trade Adjustment Assistance (TAA) program -- the federal program that provides job retraining and other benefits for workers who are displaced because of trade. Among other things, the legislation would provide automatic TAA eligibility for displaced textile and apparel employees. The Dole legislation joins a companion bill introduced earlier this year by Rep. Robin Hayes (R-NC). While the legislation's prospects are unclear, similar legislation was approved as an amendment to the Caribbean Basin Trade Partnership Act in the Senate during 2000. That amendment was removed in conference before the underlying legislation could be signed into law. With the TAA program set to expire in a little more than three months, Congress is expected to review these and other proposals in the near future. Together with more than 400 other companies and associations, AAFA signed on to a letter urging renewal of Trade Promotion Authority (TPA), which is set to expire June 30. Trade Promotion Authority provides authorization for the President to negotiate trade agreements that can be approved by Congress in a simple up-or-down vote provided he regularly consults with Congress on the underlying negotiations. Without TPA, the President is unable to engage in many negotiations, providing an opportunity for other countries to engage in trade deals that isolate the United States. Although the President strongly supports renewal of TPA, the Democratic leadership has expressed wariness at renewing this authority because of concerns over the trade agenda and its impact on U.S. workers.
06.20.07
The World Trade Organization's (WTO) recent Trade Policy Review (TPR) of India highlighted some alarming issues in regards to India's textile and apparel market. India’s high tariffs on the importation of textiles and apparel are restricting market access to global trading partners. The WTO reported that the average tariff in India's textiles and apparel sector is 12.3 percent, but additional duties raise the average rate to 22.5 percent, significantly higher than the 12.1 percent average the country has for all industrial goods. India's retail distribution services are closed to foreign investment and their manufacturing system has been confined due to the complex system of customs duties, additional duties and special additional duties. These barriers greatly obstruct access to the Indian market, which is the world's second-largest emerging market-- boasting a middle class of over 200 million people and an average growth rate of 8.5 percent over the last four years.
The World Bank on May 29 reported that the removal of quotas on shipments of textiles and apparel from China to the United States and the European Union (EU) will probably lessen export volumes and prices in developing countries in 2008 and 2009. However, the World Bank's 2007 Global Development Finance Report states that these developing countries can survive when the quotas are lifted if they continue to improve efficiency.
The European Union's (EU) new chemical regulatory system, known as REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals), officially entered into the force June 1. REACH will ultimately require all products containing chemical substances higher than one ton per year to register those substances with the new European Chemicals Agency before entering into the EU market. REACH will likely affect many kinds of footwear and apparel sold into the European market. AAFA will hold an Environmental Issues seminar in New York City on June 27 featuring REACH as well as other important environmental issues affecting the U.S. footwear and apparel industries – such as CA Proposition 65 and AAFA's new Restricted Substances List (RSL).
05.31.07
High-level officials met in Washington, DC May 22-23 as part of the US/China Strategic Economic Dialogue (SED) to discuss important issues affecting the US/China relationship. Except for commitments from the Chinese to significantly open its financial sector and to allow more airline flights between the two countries, the talks produced little more than vague promises from the Chinese to purchase more US exports and to improve enforcement of Intellectual Property Rights (IPR). The lack of significant results from last week's meeting will likely give Congress more ammunition to pass legislation "punishing" China on a range of issues -– from IPR enforcement and subsidies to alleged currency manipulation –- before the end of the year.
The American Federation of Labor & Congress of Industrial Organizations (AFL-CIO) on May 22 expressed support for the extension of the Andean Trade Promotion and Drug Eradication Act (ATPDEA). In a letter to the Congressional leadership, the AFL-CIO noted that renewed preferential access to the US market is vital to the Andean region's economic and political stability. ATPDEA provides apparel and footwear made in the region duty-free access to US markets under certain rules. The AFL-CIO's backing of legislation to extend ATPDEA comes at a critical time as the preferences for Columbia, Peru, Bolivia and Ecuador are currently set to expire in a little over a month (June 30, 2007). AAFA, working with unprecedented support from the entire US apparel and textile supply chain, continues to lobby Congress not only for quick passage of an extension for ATPDEA, but also for quick Congressional approval of the pending free trade agreements (FTAs) with Colombia and Peru. The FTAs will make the current benefits permanent, reciprocal and more comprehensive (the FTAs cover textiles as well as apparel and footwear).
A diverse group of Democrats backed a bi-partisan agreement on a "New Trade Policy for America" on May 22. US Representatives Ellen Tauscher, Adam Smith, Joe Crowley, Ron Kind and Artur Davis spoke in support of the agreement on the floor of Congress during a "special order." According to all of the speakers, the agreement would allow pending US Free Trade Agreements to be amended to include core Democratic values such as core labor standards and environmental protections. The incorporation of these deep-seated Democratic principles will shape US trade policy going forward and provide the advantages of globalization for everyone – not only US workers and consumers, but workers and consumers worldwide.
The US government publicly released the full text of the US/Korea Free Trade Agreement (KORUSF, TA) on May 24. Once approved and implemented, virtually all footwear and travel goods (both textile and non-textile) under the KORUSFTA will receive immediate and reciprocal duty-free entry under very flexible rules of origin. Meanwhile, virtually all apparel will be subject to a very restrictive "yarn-forward" rule of origin. Further, while most apparel will receive duty-free entry immediately, duties on a number of apparel and textile items will be subject to five or ten-year duty phase-outs.
With the full text now public, AAFA needs assistance in responding to a US Int, ernational Trade Commission (ITC) request for comments on the proposed KORUSFTA. 05.23.07
Ahead of this week's closely watched meetings between senior Chinese and US officials in Washington, DC, the People's Bank of China announced May 18 that it has enlarged the trading band for China's currency. The move, which expands the daily limit the Chinese renminbi (otherwise known as the Yuan or RMB) can fluctuate against the US dollar from 0.3 percent to 0.5 percent, could allow the curren, cy to appreciate at a faster rate than it has in the past. This move comes on the heels of a bipartisan group of 42 members of Congress, led by Congressman Charlie Rangel (D-NY), Chair of the powerful House Ways and Means Committee, and Ways and Means Trade Subcommittee Chairman Sander M. Levin (D-MI), filing a petition May 17 under Section 301 of the Trade Act of 1974 calling on the United States Trade Representative (USTR) to take strong action to end China’s continued undervaluation of its currency.
China revalued the renminbi against the dollar 2.1 percent in July 2005. The renminbi has appreciated another 5.3 percent since that time under China's "managed float" system. Yet many experts still allege that China intentionally undervalues its currency 15 to 40 percent below its appropriate value by fixing the currency's value against the dollar, thereby making China's products relatively cheaper versus US-made products. USTR has 45 days to respond to the petition. The Bush administration has rejected similar petitions in the past, instead opting to try to resolve this and other issues through negotiations, such as this week's Strategic Economic Dialogue (SED) meetings in Washington, DC. The US Department of Commerce on May 18 released the full transcript and video from its April 24 public hearing on its current program monitoring US imports of certain apparel products from Vietnam. AAFA, along with AAFA members International Textile Group (ITG), Liz Claiborne, Inc. and Hampshire Group, testified against the program. Of the 12 witnesses who testified, only one testified in support of the program -- the National Council of Textile Organizations (NCTO). No apparel companies or organizations representing domestic apparel interests have so far testified in support of the Department's import monitoring program.
The Brazilian government on April 24 formally approved a dut, y increase on non-MERCOSUR imports of footwear and apparel from 20 percent to 35 percent. Apparently, the move is legal under international trade rules, because the so-called "bound rate" Brazil published to the World Trade Organization (WTO) at the end of 1994 was 35 percent. Most expect Brazil's proposal to be approved by Brazil's MERCOSUR partners (Argentina, Paraguay, Uruguay and Venezuela) at MERCOSUR's next meeting in late May (MERCOSUR maintains a common external tariff).
05.11.07
Six prominent members of Congress on May 2 sent a letter to the Bush administration raising questions about both the legality of and the implementation of the US government's Vietnam apparel import monitoring program, . If the Bush administration cannot legally justify the program, the letter's signatories urged the program be immediately scrapped. If the program is to go forward, the program must be limited to those apparel products that are produced in a commercially viable fashion in the United States, for which producers of those products have asked for monitoring, and for which there is evidence of material injury to those producers due to US imports of those products from Vietnam.
05.4.07
The US Department of Commerce held a hearing on April 24 on the Department's monitoring program on US apparel imports from Vietnam. AAFA, along with AAFA members International Textile Group (ITG), Liz Claiborne, Inc. and Hampshire Group, testified against the program.
Of the 12 witnesses testifying, only one testified in support of the program -- the National Council of Textile Organizations (NCTO). No apparel companies or organizations representing domestic apparel interests have so far testified in support of the Department's import monitoring program. AAFA testified that Commerce needs to first identify, the domestic apparel manufacturing that is being injured or that has the potential to be injured by dumped imports from Vietnam (should there be a finding that there is dumping from Vietnam). This is a basic requirement for any successful anti-dumping case to move forward. AAFA argued that the monitoring the Department is doing now is creating a lot of confusion and not yielding any of the transparency and predictability that the industry was promised toward the end of last year. If, for example,, there is no domestic production or interest in monitoring by an identified domestic industry, the government shouldn't spend the time or taxpayers money, scare the trade nor create false expectations by monitoring imports of those products. It is unclear what the next steps are at this time. In one possible sign, it appears that the Department will soon start to explore "surrogate" countries against which they can judge Vietnam imports to see if those imports are being dumped. If true, it would be a troubling sign as the Department would be trying to find out if dumping is occurring without first finding out if anybody who makes a similar product is actually injured by or interested in the dumping issue. Congressman William Delahunt (D-MA) and Robert Goodlatte (R-VA) announced last week in a press conference their plans to reintroduce the design piracy bill, which was HR 5055 in the 109th Congress. The legislation will be identical to HR 5055, and would establish three year copyright for fashion desi, gn.
A hearing was held on HR 5055 in the last Congress, and demonst, rated that the fashion design community is not in unison on the issue. Main concerns expressed in the hearing include the broad definition of what constitutes a fashion design and the potential onslaught of law suits that could develop due to the implementation of the legislation. There is also a concern that the legislation would stifle fashion design as designers draw inspiration from each others work, and fear of a law suit might change the landscape of U.S. fashion design. AAFA has been working with the main proponents, the Council of Fashion Designers of America (CFDA), on potential revisions to the bill that could be included as the bill moves forward in Committee. As the trade debate in Congress and in the American public heats up, the Heritage Foundation, a conservative think tank, on April 16 issued a new report titled How Free Trade Benefits America. The report outlines how the American public benefits from trade.
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However, a new global survey released April 25 found that while 60 percent of Americans think globalization is good and the overwhelming majority of Americans believe that trade benefits consumers, when it comes to trade's impact on jobs, 67 percent of Americans consider trade harmful for US workers' job security and 60 percent call it detrimental for job creation. The responses to these questions varied dramatically in the 13 other countries , surveyed .
04.26.07
In a surprising move, the European Union (EU), starting May 1, will impose new punitive duties of 15 percent (on top of normal duties) on European imports of certain US-made athletic footwear, shirts and sweaters. The 15 percent punitive duties the EU already imposes on European imports of certain US-made pants and blankets will continue. Europe claims the sanctions are in response to the continued application of the Byrd Amendment by the United States, which has been deemed illegal by the World Trade Organization (WTO), even though the, US Congress has already passed l, egis, lation to discontinue, the, Byrd Amendment as of October 2007. The Byrd amendment allows for the distribution of the proceeds from the punitive duties in US anti-dumping and countervailing duty cases to be distributed to the US manufacturers who originally filed the anti-dumping or countervailing duty case. This situation is a perfect example of how an action that is supposedly meant to protect US manufacturers (i.e. petitioners in an anti-dumping case) actually hurts US manufacturers (i.e. the US apparel, footwear and textile products manufacturers whose exports to Europe, their biggest export market, are now subject to sanctions in the form of 15 percent punitive duties).
The United States filed two requests March 10 for World Trade Organization (WTO) dispute settlement consultations with China: one over deficiencies in China's legal regime for protecting and enforcing copyrights and trademarks on a wide range of products, and the other over China's barriers to trade in books, music, videos and movies. The cases represent continuing frustration over China's weak enforcement of intellectual property rights (IPR) protection. If consultations fail to achieve any breakthroughs, the United States will move the case to WTO dispute settlement. If the United States is successful, the WTO could authorize the United States to impose trade sanctions against China until China significantly improves its IPR enforcement regime.
Amidst growing calls in the United States and worldwide for the United States and other developed countries to provide duty-free/quota-free access for least developed countries (LDCs), US Senators Gordon Smith (R-OR), Diane Feinstein (D-CA), Larry Craig (R-ID) and John Sununu (R-NH) re-introduced the TRADE Act (S. 652) on February 15. The TRADE Act would provide all least developed countries not currently covered by US trade preference programs -- Bangladesh, Cambodia, Laos, Nepal, etc. -- AGOA-style duty-free access to the US market for most products, including apparel and footwear. The TRADE Act is part of a larger AAFA-supported effort to provide all LDCs true duty-free/quota-free access to the US market for ALL products.
Following recent moves to eliminate the Value-Added Tax (VAT) rebate for major inputs used in footwear exported out of China, the Chinese government appears ready to lower the VAT rebates for exports of cotton and man-made (MMF) textile products (from 11 percent to 9 percent) and apparel (from 13 percent to 9 percent). Like the move on footwear, the Chinese government hopes these moves help to reduce the huge trade deficit with the United States, help move Chinese manufacturers into higher value-added industries and eliminate pollution-producing industries. A final decision is expected shortly.
In response to lobbying from AAFA and large parts of the US business community, the US Commerce Department announced April 10 that it has implemented the AAFA-supported World Trade Organization (WTO) decision against the United States on "zeroing." The WTO found that the practice of "zeroing" by the US Commerce Department was arbitrary and capricious. The practice allowed the Department to arbitrarily suppress US sales data collected in the course of a dumping investigation that was below the Department's constructed "normal value." This practice served no other purpose than to artificially inflate dumping margins. As expected, the dumping margins in the 11 cases where the US Commerce Department had previously applied "zeroing" fell dramatically. In some of the cases, the revised dumping margins were so low -- either zero or de minimus -- that Commerce was forced to revoke some or all of the dumping orders in place in those case, s. This decision is an important development in light of the recent US government commitment to monitor and possibly self-initiate anti-dumping cases against US imports of certain apparel from Vietnam. Learn more on how these and other decisions could affect your business at AAFA's June 14 seminar in New York City titled Don't Dump on Me! - The Specter of Trade Remedy Cases, How Do You Prepare? For more information or to register, please go to the AAFA Website.
04.9.07
More than one week after the United States and Korea announced that they reached a free trade agreement, many of the agreement's provisions remain unclear. Based on a summary released by the Office of the US Trade Representative (USTR), it appears that apparel will be subject to a restrictive yarn-forward rule of origin. While it appears that the majority of apparel will be able to enter each country duty-free immediately, some products will not be duty-free until five or ten years after the implementation of the agreement. Based on other published reports, AAFA believes that most footwear under the agreement will be duty-free immediately under flexible rules. AAFA will provide more details as they become available. (Nate Herman).
After more than a year of delays, Japan and Thailand signed a free trade agreement April 3. Based on preliminary reports, the agreement will phase out tariffs on Japanese imports of leather footwear from Thailand over five years. The rules of origin, however, remain unclear. If true, this agreement could provide a significant opening into the Japanese leather footw,, ea, r market. The leather footwear market remains protected by a tariff rate quota (TRQ) that essentially limits leather footwear imports into the huge Japanese market to a quota of 12 million pairs a year because imports above the quota are subject to duties that are the equivalent of $40 per pair. The agreement also contains some benefits for Japanese imports of Thai apparel. AAFA will provide more details as they become available. (Nate Herman)
The US government's Office of the US Trade Representative (USTR) released its 2007 National Trade Estimates Report on Foreign Trade Barriers on April 2. Am, ong the many barriers cited in t, he report, the report found continued barriers to US-branded footwear and apparel in Argentina, China, Colombia, Japan and elsewhere. These barriers were identified and included at the request of AAFA. For a complete list of all the barriers cited by AAFA, please view our comments submitted in preparation for the report. (Nate Herman)
The US International Trade Commission (ITC) in March released The Economic Effects of Significant US Import Restraints: Fifth Update 2007. Among other things, the report found that the elimination of US import restraints on apparel, footwear and travel goods would increase the economic welfare of the United States by over $2 billion per year. (Nate Herman)
On March 27, Congressional Democrats released a one page document outlining new steps they believe should be taken to construct a new trade policy agenda. The proposal addresses a number of trade policy areas including labor, environment, access to drugs, enforcement and trade preference programs. Congressional Democrats had hoped to push this proposal as a way to generate additional Congressional support for the trade agenda and, specifically, for pending free trade agreements. They believe trade agreements need to include strengthened labor provisions that require enforceable internationally recognized labor rights.
Key Members of Congress and Administration officials had been working for the past few months in an effort to reach a political compromise on this issue by April 1, a procedural deadline for trade agreements to be considered under Trade Promotion Authority (TPA). Although many of the concepts from the Democrat’s proposal have been generally well received by the Bush Administration and Congressional Republicans, some differences remain because of concerns that trade agreement labor provisions could be used to force changes in U.S. labor laws. As a result, on March 30, House Ways and Means Chair Representative Charlie Rangel (D-NY) and Ranking Republican Jim McCrery (R-LA), jointly announced that discussions would continue past the deadline. (Nate Herman). Representatives from AAFA, the Footwear Distributors and Retailers of America (FDRA) and interested footwear firms met with Assistant Secretary for the Private Sector Office Alfonso Martinez-Fonts at the US Department of Homeland Security on March 28 to discuss the ongoing Customs footwear textile outsole issue. While Assistant Secretary Martinez-Fonts listened to the footwear industry's concerns and offered to support the industry's efforts to obtain a meeting with Customs Commissioner Basham, he seemed less receptive to supporting the industry's efforts to prevent the US Department of Homeland Security's Bureau of Customs and Border Protection (Customs) from overturning the long accept, ed practice of allowing lower duties for fabric upper, rubber bottomed footwear that have fabric imbedded or otherwise permanently attached to the sole of the shoe. If Customs overturns the current practice, the US footwear industry could pay $200 million in additional duties annually. The industry, with the support of AAFA's Customs counsel, the law firm of Sandler, Travis & Rosenberg, continues to work to gain Congressional and Bush administration support to maintain the status quo. (Nate Herman).
At the encouragement of AAFA, U.S. negotiators continued to push on a label harmonization program during meetings at the World Trade Organization (WTO) last week. Meeting on March 26, U.S. negotiators discussed with counterparts from a dozen other countries a proposal that would lead to simpler and less burdensome rules for the labeling of textiles, apparel, footwear and travel goods. The EU has proposed a similar initiative. Both have been warmly welcomed by WTO members as a possible measure to eliminate non-tariff barriers in the Doha Round and simplify trade in these sectors. In the coming weeks, negotiators hope to generate more support and better understanding of this concept among WTO member delegations. Final action, of course, will be dependent upon progress in the overall Doha Round. (Steve Lamar)
The US Department of Commerce announced March 30 that it will allow US manufacturers to bring counter-vailing duty (CVD) cases against US imports from non-market economies, such as China and Vietnam, over alleged subsidies. AAFA opposed the decision because it could lead to "double-counting," or the imposition of both anti-dumping duties and countervailing duties against US imports of the same product. Further, anti-dumping duties imposed on US imports of certain products from non-market economies like China and Vietnam already take into account alleged subsidies by using prices in a market economy (like India) to determine dumping. Hence, by allowing CVD cases as well, US imports from non-market economies could potentially be punished three times over for the same alleged infraction of international trading rules.
This issue is particularly important for our industry in light of the recent Bush administration deal to monitor and possibly self-initiate trade remedy cases against US apparel imports from Vietnam. With today's announcement, the US government could potentially self-initiate both anti-dumping and countervailing duty cases against US apparel imports from Vietnam. On the plus side, the US Department of Commerce announcement could stall Congressional approval of two bills targeting China: H.R. 1229, a bipartisan bill introduced by US Representatives Artur Davis (D-AL) and Phil English (R-PA) that would have, among other things, allowed CVD cases against non-market economies and H.R. 782, the Fair Currency Act, a bipartisan bill introduced by US Representatives Tim Ryan (D-OH) and Duncan Hunter (R-CA) that would allow CVD cases against countries for alleged currency manipulation. (Nate Herman) House Ways & Means Committee Chair Charlie Rangel (D-NY) and Trade Subcommittee Chair Sander Levin (D-MI) introduced new legislation March 29 to extend the Andean Trade Promotion & Drug Eradication Act (ATPDEA) until the end of 2009. ATPDEA, currently set to expire May 31, allows duty-free access for US imports of apparel (under certain rules) and most footwear (under very flexible rules) from Colombia, Peru, Bolivia and Ecuador. The United States has negotiated free trade agreements with Colombia and Peru, but it is unclear if or when those agreements will be approved by Congress. Further consideration of either FTA is dependent upon the conclusion of a political agreement strengthening labor provisions in trade agreements. (See Related Labor & Trade Article above.) (Nate Herman)
The US government's inter-agency Committee for the Implementation of Textile Agreements (CITA) on March 26 published the first annual cap for US apparel imports under the recently implement Haiti "HOPE" program. (Nate Herman)
Despite continued uncertainty over Congressional approval (See Related Labor & Trade Article above.), President Bush notified Congress March 30 that it intends to sign the US/Panama Free Trade Agreement. If approved by Congress, US apparel (under CAFTA-style rules) and footwear (under flexible rules) imports from Panama would enter the United States duty-free. (Nate Herman). On April 1, the Bush Administration announced it has concluded talks with Korea on a Free Trade Agreement and notified Congress it will sign the agreement later this year. The announcement concludes a torturous 10-month negotiation process and ensures that Korea can be considered under Trade Promotion Authority (TPA) before it expires on July 1, 2007. Details of the agreement have yet to be announced, but will be summarized and published by AAFA shortly. (Nate Herman).
Join us in Washington, DC April 18 to lobby Congress to approve the Affordable Footwear Initiative (AFI). With coordination from AAFA's trade and customs counsel, the Washington, DC law firm of Sandler, Travis & Rosenberg, AAFA and the Footwear Distributors and Retailers of America (FDRA) have combined forces with interested footwear companies to launch AFI.
Today, 99 percent of all footwear sold in the United States is imported. The 1930s-era high tariffs imposed on US footwear imports -- our product -- are outdated. These duties force hardworking American families to pay the equivalent of a $5 billion tax -- a tax that benefits no one. Furthermore, the highest of these "taxes" are on the lowest-priced footwear -- footwear no longer produced in the United States. AFI focuses on this footwear and the impact this "tax" has on the American family. Simply put, we are asking Congress to reduce or eliminate duties altogether on lower-cost and children's footwear products. We hope you can join us April 18 to help us lobby on behalf of this important initiative. Please contact AAFA's Nate Herman at 703.797.9062 if you would like to join us or if you would like more information. On March 20, President George W. Bush certified to Congress that US apparel imports from Haiti are now eligible for duty-free treatment under the Haitian Hemispheric Opportunity through Partnership Act of 2006 (HOPE). In response, the US Department of Homeland Security's Bureau of Customs and Border Protection (Customs) issued detailed customs instructions March 20 on how to enter US imports of Haitian apparel duty-free under the HOPE legislation. (Nate Herman)
The US Department of Commerce will hold a public hearing on April 24 in Washington, DC on the Department's Monitoring Program on US apparel , and textile imports from Vietnam. To speak at or participate in the hearing, please contact the US Department of Commerce directly. (Nate Herman).
Several World Trade Organization (WTO) member countries -- China, India, Thailand, Vietnam and others -- rejected Turkey's March 9 proposal to create a "work program" for textiles during a March 19 WTO Goods Council meeting. As a result, the proposal was tabled until the next WTO Goods Council meeting, scheduled for May 21. All proposals in the WTO must be approved by consensus. (Nate Herman)
03.26.07
With U.S./Korea Free Trade Agreement talks facing a critical (and possibly final round) in Seoul Korea during the last week of March, AAFA President and CEO Kevin M. Burke sent a letter to the U.S. Trade Representative, Ambassador Susan Schwab, reinforcing key provisions that need to be included in the FTA for it to be commercially meaningful for the apparel and footwear industries.
03.12.07
In response to the AAFA-supported World Trade Organization (WTO)-case recently launched by the United States against Chinese WTO-illegal subsidies, China announced March 8 that it would terminate a regulation implemented by China's Central Bank. That regulation allowed large exporters to take advantage of discounted loans not available to other companies. The loan program was one of the nin, e WTO-illegal subsidies the United States identified in the WTO case.
03.5.07
The Dominican Republic formally joined the US/Central America-Dominican Republic Free Trade Agreement (CAFTA) on March 1. Now, apparel (under certain rules) and virtually all footwear (under very flexible rules) made in the Dominican Republic can now enter the United States and the other CAFTA countries duty-free.
AAFA submitted comments February 28 to the European Commission’s Enterprise Directive opposing European Union (EU) legislation (80/181/EEC) that would require labeling and product information for products sold in Europe to use metric-only measurements beginning on January 1, 2010. AAFA noted that the continuation of the current policy of allowing dual metric/US measurements would benefit both European and US businesses and consumers and help to keep EU and US labeling requirements in harmony.
02.26.07
In comments submitted February 13 to the Office of the US Trade Representative (USTR), AAFA urged the Bush administration to certify Haiti under the Haitian Hemispheric Opportunity Through Partnership Encouragement (HOPE) Act and implement the program as soon as possible. The longer HOPE is delayed, the worse the economic and political situation in Haiti will deteriorate. HOPE shores up Haiti's faltering apparel industry by offering additional opportunities for duty-free access for US apparel imports from Haiti.
On February 20, the Canadian Parliament approved a resolution urging the Canadian government to impose safeguard quotas against Canadian apparel imports from China. While the resolution is non-binding and the Canadian International Trade Tribunal has previously rejected such a request, the resolution indicates growing pressure on the Canadian government to take some sort of action against Canadian apparel imports from China.
02.22.07
In what AAFA expects to be the first of many hearings on "sweatshops" in Congress, Senator Byron Dorgan (D-ND), Chairman of the Interstate Commerce, Trade, and Tourism Subcommittee of the Senate Committee on Commerce, Science and Transportation, held a hearing February 14 titled Overseas Sweatshop Abuses, Their Impact on US Workers, and the Need for Anti-Sweatshop Legislation (For a list of witnesses, copies of their testimony and a webcast of the hearing, please go to the Senate Commerce Committee website). While the list of witnesses appeared "stacked," witnesses from WRAP and the CATO Institute, a libertarian think-tank, successfully highlighted the expansive efforts of the US apparel and footwear industries and others to improve work place conditions overseas. The CATO Institute witness also detailed the flaws in recent legislation introduced by Senator Dorgan that would, among other things, allow US businesses, including their shareholders, a private right of action to sue other US companies allegedly importing product made with as yet undefined "sweatshop" labor. AAFA submitted a written statement for the hearing record. Only two members of the 23 member Senate Commerce Committee -- Senator Dorg, an and Senator Jim DeMint (R-SC) -- participated in the lightly-attended hearing. This hearing comes at a critical time as the Bush Administration and Congress work to try to reach a compromise over the role of labor rights in free trade agreements.
The US Department of Homeland Security's Bureau of Customs and Border Protection (Customs) will soon decide whether to reverse its long-standing practice regarding the classification of fabric bottom shoes. For years, importers have been affixing fabric to the outsoles of certain types of shoes to take advantage of lower duty rates. Customs has legitimized this practice through its own rulings dating from 2002 and before. Currently, shoes with fabric and rubber/plastic uppers and textile outsoles are classified under Heading 6405 of the Harmonized Tariff Schedule at a duty rate of between 7.5 percent and 12.5 percent. Customs officials have indicated their desire to re-classify such footwear under Heading 6404 where it will be subject to duties ranging from 37.5 percent to 67.5 percent -- or an average effective duty rate in excess of 50 percent. The proposed change, which would affect mostly lower-priced synthetic footwear, would impose a regressive tax that would raise the annual cost to consumers by an estimated $500 million, hitting low-income consumers the hardest. The threatened re-classification has no legal basis in the tariff passed by Congress or in Custom’s own rulings. Further, Customs h, as not proposed this re-classification in response to a request from domestic industry, but has made this proposal of its own accord. For more information, please contact AAFA's Nate Herman at 703.797.9062.
AAFA sent a February 16 letter to Secretary of Commerce Carlos Gutierrez urging the US Department of Commerce to comply with a World Trade Organization (WTO) decision that requires the United States to partially eliminate the practice of "zeroing" in anti-dumping cases. Not only is the practice WTO-illegal, but the use of "zeroing" by the US Commerce Department is arbitrary and capricious. The practice allows the Department to arbitrarily suppress US sales data collected in the course of its investigation that are below the Department's constructed "normal value." This practice serves no other purpose than to artificially inflate dumping margins. The letter also notes that the failure of the United States to comply with its obligations under global trading rules usually hurts US apparel and footwear firms in the form of foreign countries imposing retaliatory duties against US-made and US-branded apparel and footwear.
The government's inter-agency Committee for the Implementation of Textile Agreements (CITA) approved two and denied a third commercial availability petition under the US/Central America-Dominican Republic Free Trade Agreement (CAFTA). In the first two decisions, CITA determined that certain woven two-way stretch fabrics, as described in the petitions, are not available in commercial quantities in the or any of the CAFTA countries. As a result, apparel made in any CAFTA country from certain third-country woven two-way stretch fabrics can enter the or any other CAFTA country duty-free. CITA denied a third petition, determining that certain wool and wool blend fabrics, as described in the petition, are indeed available in commercial quantities in the CAFTA region.
Last week, AAFA submitted comments to the United States Trade Representative (USTR) under Section 182 of the Trade Act of 1974. The purpose of these comments, commonly called “Special 301”, is to identify countries that provide inadequate protection of intellectual property rights via inadequate laws or lack of enforcement. A myriad of countries and issues were identified by AAFA member companies. Some of the overlapping concerns in several countries included the need for stronger penalties, additional resources to combat and prosecute counterfeit cases, disposal of counterfeit goods and equipment, among others.
Comments submitted by US companies and associations will be used by the USTR to determine which countries will be placed on or kept on the priority watch list or the watch list to be evaluated on whether further action is needed to get these countries to comply with the WTO requirements. If you have any additional countries or information you would like to add for future AAFA comments, please contact Felicia Cheek at 703.797.9039. 02.12.07
Despite the Bush administration's recent decision to initiate a World Trade Organization (WTO) case against China over alleged subsidies, more and more members of Congress have decided it is time for Congress to take action. While man, y are introducing legislation (English bill, Hunter/Ryan bill, Stabenow/Graham bill, etc.) targeting China over their alleged infractions on currency, subsidies and intellectual property rights, others are airing their grievances through Congressional hearings on China, the second of which will be held by the powerful House Ways & Means Committee later this week. Many believe the hearings could eventually lead to consensus legislation supported by House leadership being introduced by this summer. AAFA continues to educate members of Congress about the importance of our industry's relationship with China. AAFA will continue to track this important issue.
The leading apparel associations in the and , AAFA and the Malaysian Textile Manufacturers Association (MTMA), issued an urgent call February 7 to their negotiators to quickly conclude a meaningful free trade agreement (FTA). The announcement, which called for both sides to include useful rules of origin and immediate duty-free access for apparel and textiles in the FTA, comes amid growing signs that the timing of the FTA could slip beyond spring, leaving the conclusion of the agreement in doubt.
AAFA submitted comments February 7 to the House Ways & Means Committee strongly supporting the Bush administrations efforts to comply with a World Trade Organization (WTO) decision that requires the to partially eliminate the practice of "zeroing" in anti-dumping cases. Not only is the practice WTO-illegal, but the use of "zeroing" by the US Commerce Department is arbitrary and capricious. The practice allows the Department to arbitrarily suppress US sales data collected in the course of its investigation that are below the Department's constructed "normal value." This practice serves no other purpose than to artificially inflate dumping margins.
The US International Trade Commission (ITC) requests comments on the effects of new trade benefits accorded to US apparel and textile imports from under the recently enacted Haitian Opportunity through Partnership Encouragement (HOPE) Act. Requests to appear at the public hearing are due October 23 and written comments are due February 7, 2008.
The US Senate approved Irving A. Williamson and Dean A. Pinkert as Commissioners of the US International Trade Commission (ITC) on February 1. The ITC conducts all government trade-related studies on behalf of Congress and the government. The ITC also determines "injury" in all anti-dumping and countervailing duty cases.
On February 6, Rep. George Miller (D-CA) introduced (HR 800), the Employee Free Choice Act. If enacted, the legislation would replace the existing system of federally supervised secret ballot union certification elections with a “card check” that certifies a union if a majority of employees sign an authorization card. Employees’ signatures would be made public to the employer, union organizers and co-workers. Sen. Ted Kennedy (D-MA) likely will introduce a Senate version soon. Although a hearing has already been held on this issue in the House, timing on further action is unclear.
AAFA is opposed to this legislation and has joined a broad industry coalition – the Coalition for a Democratic Workforce – to work this issue. The Coalition has sent a letter to Congress and is now actively meeting with Members of Congress and staff to explain why this legislation is not needed. 02.6.07
President Bush last week asked Congress to extend Trade Promotion Authority (TPA), which is currently set to expire on , June 30, 2007. The President, needs TPA renewed so he can negotiate trade agreements, such as the multilateral trade round currently under discussion, and submit them to Congress for consideration. President Bush's announcement was welcomed by AAFA and numerous business groups. Prospects for renewal remain uncertain.
TPA renewal has received cautious support from key Democrats, such as Senate Finance Committee Chairman Max Baucus (D-MT), but only to the extent that other issues, such as job training, labor rights protection and environmental standards are addressed. Similarly, in the aftermath of the 2006 mid-term elections, a number of Democrats in both chambers have expressed wariness over any renewed grant of TPA. USTR Ambassador Susan C. Schwab announced on Friday that the United States will sue China in the World Trade Organization (WTO) over concerns that China maintains a number of WTO-prohibited subsidies. Specifically, the US argues that China provides nine types of subsidies in the form of financial incentives that encourage firms to export their products and that encourage firms to purchase domestic instead of foreign goods. Both types of subsidies are prohibited by th, e WTO. China had agreed to eliminate both when it joined the WTO in December 2001.
Filing of the case begins a 60-day period of consultations during which China and the United States may resolve their differences over this issue. If no resolution is possible in that time period, a formal dispute settlement panel in the WTO will be formed. This is the third such dispute the US has filed against China in the WTO. AAFA President and CEO Kevin M. Burke submitted comments to the U.S. China Economic and Security Review Committee on February 1. Acknowledging the complexity of the bilateral relationship, the comments urge that U.S./China policy discussions be conducted in a way that reflect, s the continued importance of China to many U.S. businesses and in a manner consistent with WTO obligations. In response to a request for comments by the Commerce Department’s Import Administration, AAFA President and CEO Kevin M. Burke submitted comments on January 31 on the proposed Vietnam import monitoring program. The comments echoed an earlier statement by AAFA stressing that the import monitoring program be conducted consistent with U.S. law and in a manner that provides a predictable environment. AAFA also signed onto a second set of comments submitted by a number of trade associations and individual companies, including many AAFA member companies. The Department had previously announced it is already monitoring selected apparel imports from Vietnam, which could lead to an anti-dumping case, but has so far failed to provide many details on this program. 01.31.07 The US government requests comments on the eligibility of Haiti to receive benefits under the AAFA-, supported Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE), which Congress approved and President Bush signed into law at the end of last year. While Congressional opponents continue their efforts to find ways to delay implementation of HOPE, currently Bush must make a determination on whether Haiti has met the eligibility requirements to receive benefits under HOPE by March 20, meaning that Haiti could start receiving benefits under HOPE as early as April. Under HOPE, US apparel imports from Haiti can enter the United States duty-free under more flexible rules of origin and for a longer duration than under the current Caribbean Basin Trade Partnership Act (CBTPA). Comments are due February 13.
US Trade Representative (USTR) Susan Schwab and Mexican Secretary of Economy Eduardo Sojo signed a custom cooperation agreement January 26 (USTR Press Release). The agreement is the first step in implementing the textile cumulation provisions of the US/Central America-Dominican Republic Free trade Agreement (CAFTA). When cumulation is implemented, a limited amount of apparel made in CAFTA countries using yarn and fabric from Mexico can enter any CAFTA country, including the United , States, duty-free. Before the cumulation provisions can be implemented, however, Mexico and each of the CAFTA countries must now change their respective free trade agreements to allow cumulation in those agreements. Meanwhile, another deadline for the Dominican Republic's entry into CAFTA will have come and gone because of new disputes over the Dominican Republic's (DR) compliance with the provisions of CAFTA, this time involving a new DR proclamation involving fuel transportation issues. March 1 is now the expected entry date for the Dominican Republic.
Echoing the ongoing battle in California on this issue, the Washington State Senate is currently considering legislation that would impose a new $100 container fee on all containers entering or leaving the Ports of Seattle and Tacoma. The purpose of the new fee would be to pay for unspecified infrastructure improvements. Prospects for approval of the measure are uncertain at this time.
US Representative Robin Hayes (R-NC) and US Senator Elizabeth Dole (R-NC) reintroduced AAFA-supported legislation that would confer the title of "Ambassador" on and require Senate confirmation for the position of Special T, extile Negotiator. The Office of the US Trade Representative's Special Textile Negotiator is the US government's lead trade negotiator on apparel and textile issues. In the past, the negotiator's lack of ambassadorial status has limited his ability to negotiate trade agreements.
01.25.07
The US Department of Commerce issued a Federal Register notice and a fact sheet announcing that it implemented its program monitoring US imports of apparel and textiles from Vietnam on January 11. The announcement also further clarified many details of the monitoring program, including:
1) Products covered -- trousers, shirts, underwear, swimwear and sweaters (only the three digit textile and apparel categories and the 10 digit HTS level in these groupings are of most significance); 2) Posting of data -- data will be posted on the web monthly; reviews -- Commerce will complete a review every six months with the first formal review due in July 2007; 3) Hearings -- Commerce will hold a hearing on the program in Washington, DC within the next three months; 4) Email alert list -- Commerce created an e-mail alert list for interested parties -- to apply, e-mail Commerce at vietnam-texapp-monitor-hotline@mail.doc.gov; 5) "Critical circumstances" -- "critical circumstances" will not apply on imports until at least the Federal Register notice announcing a self initiation, and possibly later than that; and 6) Authority for monitoring program -- clarifying that the program will be consistent with EXISTING US law and with WTO obligations, and clarifying that there will be NO NEW documentation requirements. The announcement left many other questions unanswered. However, Commerce requested new comment, s from interested parties on the program -- due January 3, 1, 2007. A recent report from the Chinese government predicted that the Chinese currency, the renminbi, will appreciate an additional five percent against the US dollar during 2007. China's currency has already appreciated 11 percent against the dollar since July 2005, when China announced it would allow its currency to float. Such reports are unlikely to dampen growing anti-China sentiments in the new Democratically-controlled Congress, however. The Congressionally-appointed US-China Economic and Security Review Commission (USCC) will hold a public hearing on the subject of China on February 1-2 where many of these views will likely be aired. Written comments are due to the USCC by February 1. AAFA plans to submit comments.
Informed sources predict that, after months of delay, the Dominican Republic will likely join the US/Central America-Dominican Republic Free Trade Agreement (CAFTA) on February 1, although this date is by no means assured. Despite published reports this week claiming the contrary, Costa Rica remains on pace to join CAFTA by summer.
Meanwhile, the US government's inter-agency Committee for the Implementation of Textile Agreements (CITA) requests comments on a January 16 petition from Lido Industries requesting that certain two-way stretch fabrics classi, fied under HTS subheading 551, 5.11.00 in which both warp and filling yarns are a blend of chief weight polyester staple mixed with viscose rayon staple, plied and wrapped around a core of filament spandex yarn (as described in the petition) be declared not available in commercial quantities in a timely manner under CAFTA as well as a January 17 petition from Glen River Trading requesting that certain two-way stretch woven fabrics of polyester, rayon, and elastomeric yarns classifiable under HTS subheading 5515.11.00 (as described in the petition) be declared not available in commercial quantities in a timely manner under CAFTA. The rebuttal period closes January 30 for the Lido petition and January 31 for the Glen River Trading petition. Responses to any rebuttals are due February 5 for the Lido petition and February 6 for the Glen River Trading petition. If CITA approves the petitions, apparel made in a CAFTA country from third-country subject fabrics listed in the petitions would be able to enter the United States and any other CAFTA country duty-free under the US/Central America-Dominican Republic Free Trade Agreement (CAFTA). AAFA requests your help in responding to an Office of the US Trade Representative (USTR) request for comments on an AAFA-supported proposal agreed to by the 150 countries of the World Trade Organization (WTO) as part of the ongoing Doha Round of global trade negotiations. The duty-free/quota-free LDC proposal would eliminate all duties and quotas the United States and other WTO member countries impose on at least 97 percent of all imports from the world's 50 poorest countries. Please submit any comments on the proposal to AAFA's Nate Herman by March 9. 01.17.07 The US government eliminated all quotas on US apparel and textile imports from Vietnam on January 11. US apparel and textile imports from Vietnam, that are exported from Vietnam after January 10, are no longer subject to quota and visa requirements.
The US House of Representatives, by a vote of 299 to 128, approved new port security legislation containing an AAFA-opposed provision requiring 100 percent scanning within five years of all cargo before it enters the United States. The bill was approved as part of the new Democratic House leadership's first "100 hours" initiative. AAFA opposes the amendment because, among other things, technology is not yet available to impose 100 percent scanning. Prospects for 100 percent scanning in the Senate are not clear at this time.
The US government eliminated all quotas on US apparel and textile imports from Vietnam on January 11. US apparel and textile imports from Vietnam, that are exported from Vietnam after January 10, are no longer subject to quota and visa requirements.
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