Legislative Comments 2005 Legislative Comments 2004 Legislative Comments 2003 and Prior

AAFA Testimony and Comments 2005

12.19.05
In December 5 comments to the US Department of Homeland Security's Bureau of Customs & Border Protection (Customs), AAFA expressed serious concern regarding Customs' new regulation requiring that importers report the identity of manufacturers of textile and apparel products through a manufacturer identification code (MID). AAFA believes this new MID requirement creates considerable additional burdens for importers of textile and apparel products by requiring additional levels of reporting detail that must be presented at the time of entry, including details that were not previously required in the textile declaration. The new MID requirement for apparel and textiles requires the name of the actual manufacturer, which goes far beyond the MID requirement for all other imported products, where only the name of either the manufacturer OR shipper is required. With the elimination of quotas, AAFA questioned why there is even the need for such an onerous and burdensome requirement. Therefore, AAFA urged Customs to again delay implementation of the new requirement until these issues can be resolved.

Last week, AAFA sent a letter to the Chairmen and Ranking members of the House and Senate Armed Forces Committees in support of provisions relating to the Berry Amendment, which requires the military to buy its uniforms from domestic manufacturers with all domestic inputs. Specifically, these provisions would provide more transparency into the Berry Amendment waiver process, clarify that components other than those not associated with clothing are covered under Berry and also provide education to military procurement personnel whose responsibilities include the regular acquisition of clothing and textiles. All of these provisions are subject to the conference negotiations between the House and the Senate that are currently taking place. The major hurtle with these provisions has always been in the Senate committee. The Chairmen plan to wrap up negotiations and pass the conference report before adjourning for the year.

11.22.05
On November 16, AAFA submitted comments to the US government regarding the most egregious trade barriers US-made and US-branded apparel and footwear face worldwide. The letter, which cites Japan's tariff-rate quotas (TRQs) on leather footwear imports, South Africa's proposed labeling scheme for imported consumer goods, Europe's onerous care labeling rules and other barriers, was submitted as part of the preparations for publication of the US government's next annual National Trade Estimate Report on Foreign Trade Barriers.

11.17.05
AAFA on November 9 urged Members of Congress to repeal a provision of trade law that could be very harmful to the US apparel and footwear industries and the hundreds of thousands of US workers they employ. The AAFA Key Vote letter urged members of Congress to vote "Yes" on a measure that included the repeal of the Byrd Amendment. The Byrd Amendment, enacted several years ago in secret, entitles US manufacturers of a certain product, no matter how few US manufacturers remain of that product, to disbursement of punitive dumping duties collected by the US government on US imports of the like product if that manufacturer participated in and won an anti-dumping case against US imports of that product. Congress' own watchdog agency, the Government Accountability Office (GAO), has found that the program is a wasteful and potentially fraudulent corporate welfare scheme that benefits only a small handful of companies at the expense of many other domestic competitors. The World Trade Organization (WTO) has ruled the Byrd Amendment illegal precisely because of the financial incentive it provides. As a result, Europe has already imposed punitive retaliatory duties on European imports of US-made apparel and other countries plan to soon follow suit. The full U.S. House of Representatives will vote on the broader measure that includes the Byrd Amendment repeal, The Deficit Reduction Act of 2005, when it returns from its Thanksgiving recess. In related news, Congressman Joe Knollenberg (R-MI) introduced new AAFA-supported legislation November 3 (H.R. 4217) that would give domestic users of imported products, including US consumers and retailers of imported apparel and footwear, legal standing to participate in anti-dumping cases. The bill would also force the US government to conduct an economic impact test to determine if the imposition of punitive dumping duties would, on net, help or hurt domestic interested parties, including consumers. Currently, the US law does not allow domestic users of imported products, such as US consumers, to participate in US anti-dumping cases even though they sometimes are the party most impacted by such actions. It is unclear if the legislation has enough support to pass Congress.

11.8.05
On October 31, AAFA filed comments on the State of Maine's proposed social responsibility code for state government procurement of apparel, footwear, textile products and travel goods. On September 29, the State of Maine took another step towards becoming the first state in the nation to ensure that its government procurement rules contain a strong social responsibility plank and adherence to a code of conduct with strong enforcement mechanisms. While the rules incorporate some of the suggestions previously made by industry to ensure the State of Maine implements an effective approach to corporate social responsibility, AAFA noted that the revised rules could still impose onerous and expensive requirements on US firms bidding on Maine clothing and footwear contracts. AAFA urged Maine to consider suggestions that would help the state balance the difficult task of securing products within required quality, quantity, cost and delivery parameters – and which are produced in accordance with such a code. Many experts see the Maine rules as a test case that other states could follow. Please see this important business advisory for more details. In other news, AAFA-member Timberland released its third annual corporate social responsibility report on November 2. As part of this year's report, Timberland released the names and contact information for ALL of its contractors, becoming only the fourth major apparel/footwear brand to do so.

11.1.05
In response to a recent study released by the Heritage Foundation, AAFA sent a letter on October 17 to the members of the House and Senate Armed Services Committee to reconfirm our position in support of the Berry Amendment. The Heritage Study, “The Military Industrial Base in an Age of Globalization”, puts forth very broad recommendations that have not been thoroughly vetted. Although the focus of the study was more on the technological supply, the recommendations were for all industries regardless of applicability including globalizing the military supply chain without fully assessing the risks in doing so. AAFA remains firm in our position that Congress should continue to fully support the Berry Amendment to ensure the security of our nation by maintaining the safe supply of uniforms, footwear and other individual equipment to our men and women in uniform.

10.20.05
Nicaragua's legislature approved the US/Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) on October 10 by a strong vote of 49-37, overcoming the opposition of Sandinista leader Daniel Ortega and his supporters. Despite this good news, efforts to ensure that CAFTA-DR is implemented as quickly and effectively as possible have stalled over certain implementation issues such as retroactively for apparel and textiles. AAFA continues to lobby the US government to make implementation of CAFTA-DR a top priority. AAFA has urged the Bush administration to appoint a high-level CAFTA-DR Implementation Czar to lead these efforts.

AAFA sent a letter October 14 to all negotiators urging them to negotiate a "commercially-meaningful" US/Andean Free Trade Agreement for the apparel and textile industries. The letter, sent ahead of apparel and textile negotiations this week in Washington, DC, calls for the agreement to adopt specific apparel and textile rules to help the region effectively compete in a post-quota world. Posted OCtober 20, 2005.

9.22.05
The associations representing the US textile industry filed nine threat-based safeguard petitions on September 14 in the hope that the safeguard quotas currently in effect (see AAFA's latest China Safeguard Matrix) will be extended for another full year when they expire on December 31, 2005. These new petitions, as well as October 1 final decisions due on a number of other safeguard petitions, will put increased pressure on US and Chinese negotiators to reach a bilateral apparel and textile agreement when they next meet in Washington, DC on September 26 and 27 (See AAFA letter outlining goals for negotiations). Meanwhile, a prominent advisor to Brazil's President announced in a September 13 press conference that Brazil will probably impose punitive "safeguard" duties against Brazilian imports of Chinese apparel, against the wishes of many Brazilian retailers, in order to protect its domestic manufacturing industry. The safeguard duties will likely go into effect by the end of September.

AAFA urged quick US Senate passage of the Stop Counterfeiting in Manufactured Goods Act (S.1699) – bipartisan legislation introduced September 14 by US Senators Arlen Specter (R-PA) and Patrick Leahy (D-VT). The bill would require the mandatory destruction of equipment used to manufacture and package counterfeit goods. In addition, it addresses methods that counterfeiters have used to evade prosecution, such as the selling of patch sets or medallions that can later be attached to generic merchandise and given the appearance of a genuine product. The US House Representatives overwhelmingly approved the legislation earlier this year. In the past five years, AAFA members and US Customs officials have seized millions of counterfeit clothes and shoes. AAFA has been active in anti-counterfeit initiatives and is a member of the Coalition Against Counterfeiting and Piracy. On a related note, AAFA will stage a two-day seminar in New York in mid-November to highlight US and international anti-counterfeit activities and initiatives. For more information on the seminar – titled “Knock It Off” – go to AAFA's website.

In a September 14 letter to the lead negotiators for a US/Andean Free Trade Agreement AAFA joined with all segments of the US footwear industry to urge all sides in the negotiations to reach a good agreement with regards to footwear. In order to be successful, any agreement must equip the region with the tools necessary to not only compete against Asia, but other competitors in their own backyard. Such an agreement should ensure that virtually all footwear is duty-free immediately under flexible rules.

9.15.05
AAFA submitted comments September 6 regarding the US government's trade policy towards China. While urging the Bush administration to show restraint with regard to the use of safeguards, AAFA encouraged the Bush administration to aggressively pursue measures to further open the Chinese market to US-made and US-branded products and to stop China's rampant piracy of US brands.

The House Ways and Means Committee recently requested comments on H.R. 3376, the Technical Tax Corrections Act, which will make changes to several tax bills that have passed the Congress. AAFA submitted comments requesting legislative corrections to the American Jobs Creation Act of 2004, P.L. 108-357. AAFA previously submitted comments to the Department of Treasury regarding its interpretation of certain aspects of the Jobs bill. The Treasury interpretations were not beneficial to AAFA members. Under the current Treasury interpretation, contract manufacturers and companies producing design and development domestically can not benefit from the manufacturing tax cut contained in the Jobs bill. The comments submitted to the Ways and Means Committee on August 31, 2005, request additional direction from committee to Treasury regarding its current interpretation of design and development and contract manufacturing so that more US businesses can take advantage of the deduction.

9.7.05
Talks held in Beijing last week between the United States and China failed to reach a comprehensive bilateral agreement on apparel and textile quotas. Despite their inability to reach an agreement, AAFA urged both sides to reach a fair, transparent and balanced agreement as soon as possible, hopefully in the next round of negotiations expected later this month. With no agreement in hand, however, the US government imposed safeguard quotas on US imports of Chinese bras (Category 349/649) and synthetic filament fabric (Category 620) on August 31. The safeguard quota will cover the period from August 31 - December 31, 2005 and will be based on actual US imports of the subject products for the year ending May 31, 2005 plus 7.5 percent. According to AAFA's preliminary estimates (see AAFA's China Safeguard Matrix), the safeguard quotas on bras won't likely embargo until the end of December. The US government postponed final decisions until October 1 on four other US textile industry petitions requesting safeguards on US imports of Chinese cotton and man-made fiber sweaters (category 345/645/646), cotton and man-made fiber dressing gowns and robes (category 350/650), men's and boys' wool trousers (category 447) and knit fabric (category 222). Meanwhile, AAFA submitted comments on September 2 in connection with proposed safeguard actions on US imports of Chinese skirts (Category 342/642), blouses (Category 341/641), nightwear (Category 351/651), swimwear (Category 359-S/659-S) and socks (Category 332/432 and 632 Part). AAFA opposes invocation of many of these on the grounds that domestic production is actually increasing (showing that market disruption is not occurring) and/or that US imports are increasing from a number of countries, not just China (suggesting that it is difficult to pinpoint China’s impact on the United States). With respect to socks, AAFA noted that the previous safeguard quota did not help domestic production at all. In fact, US production of socks actually declined during the period safeguard quotas on US imports of Chinese socks were in place. AAFA believes that the US government will delay final decisions on these safeguard petitions as well as a safeguard petition on curtains and drapes (Category 369 Part/666 Part) until the beginning of October. AAFA believes that, by delaying these decisions until October, 1) the US government hopes to wrap all of these categories into a comprehensive quota agreement with China and 2) if an agreement is not reached and safeguards are imposed, they will remain in place for a full year (all safeguard decisions made prior to October 1 only remain in place until the end of the calendar year, while all decisions made between October 1 and December 31 remain in place for a full year).

AAFA submitted comments to the US House of Representative's Ways and Means Committee on September 2 in connection with several tariff and trade bills that are pending before Congress. Among the bills supported by AAFA are ones that would reduce or eliminate duties on US imports of a number of different footwear articles as well as tents, cotton shirting fabric and certain yarns, none of which are still made in the United States. AAFA also supports a repeal of the so-called Byrd Amendment, which has been ruled illegal by the World Trade Organization (WTO). Because of the Byrd Amendment, the European Union (EU) now imposes punitive duties on European imports of certain US-made clothing. Finally, AAFA strongly supports a provision that would require greater transparency in the decision-making process of the US government's interagency Committee for the Implementation of Textile Agreements (CITA), the body that regulates US apparel trade. The House Ways and Means Committee is reviewing hundreds of such measures to determine which legislation can move as part of a miscellaneous tariff and trade package later this year.

8.22.05
On August 15, AAFA filed comments as an "outside interested party" with the European Union (EU) strongly opposing proposed punitive anti-dumping duties against Chinese and Vietnamese leather footwear. AAFA has already filed comments on the EU's anti-dumping investigation into EU imports of Chinese and Indian safety-toe footwear. Posted August 22, 2005.

8.18.05
On July 29, AAFA submitted comments to the South African government strongly opposing proposed rules on labeling of apparel, footwear, travel goods and other consumer products. If implemented, the proposed rule would require that the labels or indelible markings on all imported clothes, shoes, travel goods, etc. include the registration code of the South African importer as well as the country of origin. As AAFA noted in its comments, inclusion of the "SARS importer registration code" on the label or indelible marking would require US exporters to make clothes and shoes containing the compliant markings solely for the South African market and sometimes different sets of product if the exporter is working with more than one South African importer. This requirement would make exporting clothes, shoes, etc. to the South African market cost-prohibitive.

6.28.05
On June 21, the US House of Representatives, by a vote of 423-2, approved the extension of the AAFA-supported ban on all US imports from Burma. The legislation now moves to the US Senate, where it is expected to win approval. In its letter of support, AAFA urged the US government to work with its allies to multilateralize sanctions against the ruling military junta in Burma. "Only when this regime faces a world united against it will freedom truly come to the Burmese people."

5.18.05
On May 9, AAFA President and CEO Kevin M. Burke filed comments opposing the invocation of sanctions on three categories of apparel imported from China – cotton knit tops (338/339), cotton woven bottoms (347/348), and cotton and man-made fiber underwear (352/652). The petitions noted that there is no evidence that imports from China have disrupted the U.S. market for these products and that swift passage of CAFTA-DR is more likely to stimulate domestic textile and apparel employment and production. The Committee for the Implementation of Textile Agreements (CITA) has to make a decision on how it will dispense with the safeguards by July 8, 2005.

4.25.05
AAFA joined with over 180 other US businesses and organizations in sending an April 18 letter to the US Senate urging the Senate to confirm Congressman Rob Portman (R-OH) as US Trade Representative as soon as possible. If approved by the Senate, Portman will replace Robert Zoellick, who left the position earlier this year to become Deputy Secretary of State. The full Senate is expected to vote on Portman's confirmation in early May.

3.9.05
AAFA sent a letter March 1 to Acting US Trade Representative Peter Allgeier urging the US government to consult with its counterparts in the European Union (EU) to convey US concern over new EU measures against imports of Chinese footwear. Effective February 1, the EU imposed a mandatory "surveillance" program to track EU imports of certain Chinese footwear. With the recent elimination of EU quotas on Chinese footwear on January 1, the purpose of the program is to provide virtual real-time import data on European imports of certain Chinese footwear in order to detect any potential surges in imports. Many believe that the sole purpose of the EU’s new “surveillance” scheme is to provide detailed real-time data to the EU footwear industry so that they can initiate either a safeguard case or an anti-dumping case against China at the earliest opportunity. According to the letter, "We strongly believe that the imposition of new safeguards or other restrictive measures on EU imports of Chinese footwear will not only hurt European consumers, but will also negatively impact sales of U.S. footwear brands in Europe and the many U.S. workers that rely on those sales."

2.22.05
AAFA disputed claims that imposing safeguard quotas on US imports of Chinese apparel would actually help the US textile industry while taking China to task for its failures to live up its World Trade Organization (WTO) obligations regarding market access and intellectual property rights (IPR) protection and enforcement in written testimony submitted February 9 to the bi-partisan Congressionally appointed US-China Economic and Security Review Commission.

2.3.05
AAFA filed comments January 26 and 28 strongly opposing the China safeguard reapplication petitions to re-impose safeguard quotas on US imports of Chinese dressing gowns (Category 350/650) and brassieres (Category 349/649). AAFA urged Committee for Implementation of Textile Agreements (CITA) to reject the dressing gown and brassiere petitions because: 1) the initial application of these safeguards failed to provide any relief to the original petitioners and 2) the petitions provide insufficient data to trigger the safeguard. Noting that the Court of International Trade issued a December 30 preliminary injunction preventing the US government from taking any further action on these or any of the other 9 threat-based China textile safeguard petitions filed to date, AAFA stated, "we view the comment period as suspended. However, given that CITA has not provided the public with any confirming guidance to that effect as of the deadline date initially established for this petition, we are submitting comments in order to preserve our rights under CITA's current China textile safeguard procedures." In related news, the US Justice Department announced that they will appeal the preliminary injunction the week of January 31. Even so, the appeals process could take 1-2 months and will occur simultaneously with the regular proceedings in the case. Meanwhile, the injunction will remain in place. According to press reports, the US government also announced that it will impose a monitoring system on US imports of Chinese textiles and apparel products recently removed from quota to provide "real-time" data on US imports from China, despite numerous concerns about the accuracy of such data, for use in possible future China safeguard cases. Finally, US Senators Charles Schumer (D-NY) and Lindsey Graham (R-SC) reintroduced legislation that would impose a 27.5 percent punitive tariff on all US imports from China in retaliation for the alleged undervaluing of China's currency caused by China's fixed exchange rate. While the bill will likely stir some debate, the legislation is not expected to pass Congress. To obtain copies of AAFA's comments as well as the latest information on all of the China safeguard apparel petitions, please go to the China Safeguard Matrix on AAFA's website.

1.25.05
In comments sent this month to the US government, AAFA urged the US government to negotiate the most flexible rules possible for apparel, footwear and travel goods in the proposed US/Oman and US/United Arab Emirates (UAE) Free Trade Agreements (FTAs). Specifically, AAFA noted that these industries represent the basic building blocks for a developing country to create an industrialized economy. However, restrictive rules for these industries would limit or, in some cases, eliminate the flexibility of US apparel, footwear and travel goods firms to fully utilize these FTAs, rendering the FTAs useless for US apparel, footwear and travel goods firms and providing little economic benefit for Oman or the UAE. Flexible rules, on the other hand, would provide these countries with the opportunity to effectively compete against China and other Asian countries and help build their economies.

1.19.05
AAFA filed comments January 10 strongly opposing the China safeguard petition on men's and boys' wool trousers (Category 447) (AAFA Press Release). AAFA President and Chief Executive Officer Kevin M. Burke commented that, "Once again, the petitioners have failed to substantiate the claim that imports of men's and boys' wool trousers from China have adversely affected, or threaten to do so in the future, the US wool trousers industry. Because the threshold has clearly not been met, AAFA urges the Committee for the Implementation of Textile Agreements (CITA) to reject the petition." Noting that the Court of International Trade issued a December 30 preliminary injunction preventing the US government from taking any further action on this or any of the other 11 threat-based China textile safeguard petitions filed to date, Burke stated "we view the comment period as suspended. However, given that CITA has not provided the public with any confirming guidance to that effect as of the deadline date initially established for this petition, we are submitting comments in order to preserve our rights under CITA's current China textile safeguard procedures."

1.11.05
AAFA sent a letter December 22 to US Trade Representative Robert Zoellick strongly opposing US textile industry requests to impose new, additional quotas on US apparel and textile imports from Vietnam as well as efforts to impose a China-style safeguard on Vietnam. The AAFA letter expresses concern that the US government would consider such actions just as it eliminated apparel and textile quotas on exports from virtually every other country worldwide. With both Canada and the European Union agreeing to immediately eliminate quotas on apparel and textile imports from Vietnam, the letter noted that efforts to impose new restraints on Vietnam "sends the wrong message, does not promote US economic benefits, and appears, quite frankly, punitive."

AAFA sent a letter December 21 to US Trade Representative Robert Zoellick urging the U.S. government to take immediate action on Japan's continued tariff rate quotas (TRQ) restricting imports of leather footwear. Japan has long maintained a tariff-rate quota (TRQ) on leather footwear imports where it allows only a small amount of leather footwear imports (12 million pairs) to enter each year at an already high duty-rate of 21.6 percent before imposing exorbitant duties that essentially deny entry to those imports. The secondary duty rate is 4300 Yen per pair, or the equivalent of $41.35 per pair at today's exchange rates. AAFA urges the US government to immediately initiate direct consultations with Japan on this matter. If these consultations fail to achieve a satisfactory resolution, AAFA requests that the U.S. government initiate consultations with Japan on this matter through the World Trade Organization (WTO). AAFA's comments were part of a larger December 20 submission for the US government's annual review of foreign trade barriers. AAFA noted progress made towards eliminating barriers to apparel and textiles in Egypt, but expressed concern over new and potentially burdensome care labeling requirements in the European Union.