INTERNATIONAL TRADE UPDATE

AAFA WORKS TO RESOLVE FOOTWEAR GLITCH IN CENTRAL AMERICA FTA
In reviewing the final results of the U.S./Central America Free Trade Agreement (FTA) negotiations, which concluded in late December, AAFA has learned that the final FTA does not fully incorporate the agreement reached by the U.S. footwear industry ( see industry letter describing the agreement). Although all but 17 specific rubber/fabric and plastic/protective footwear items will be duty-free immediately under the FTA, 49 specific items will be subject to a restrictive rule of origin (no imported uppers). All other footwear will be subject to a flexible rule of origin (allows imported uppers). The original footwear industry agreement requires that only 17 items be subject to the more restrictive rule and all other footwear be subject to a flexible rule. AAFA has and will continue to work with the U.S. government and our counterparts in Central America to resolve this issue as quickly as possible. AAFA will keep its members apprised of any developments on this issue.

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CHINA SAFEGUARD QUOTAS IMPLEMENTED -- AAFA SUCCESSFULLY REMOVES VISA REQUIREMENTS
On December 24, 2003, the Committee for the Implementation of Textile Agreements (CITA) formally requested consultations with the Chinese government regarding U.S. imports of Chinese bras (Category 349/649), dressing gowns (Category 350/650) and knit fabric (Category 222). The first round of consultations, which took place earlier this month, ended without any resolution. As AAFA had previously reported, CITA had already decided to initiate such consultations. Under the China textile safeguard clause, the formal request for consultations immediately triggers quotas on U.S. imports from China of each of these products. The quotas, which are for the period of December 24, 2003 - December 23, 2004, equal: Bras (Category 349/649) - 16,828,971 dozen; Dressing Gowns (Category 350/650) - 4,094,382 dozen; and Knit Fabric (Category 222) - 9,664,477 kilograms. Visas were originally required on all shipments under these categories that would have been exported from China on or after January 23, 2004. However, following a January 9 letter sent by AAFA and 3 other associations to the Committee for the Implementation of Textile Agreements (CITA) urging a delay, CITA announced January 23 that visas will not be required for these products.