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INTERNATIONAL TRADE UPDATEA Monthly AAFA Newsletter on Trade September 2004
• AAFA Opposes Policy Switch Allowing "Threat-Based" China Textile Safeguards • US-DR HFCS Soft Drink Dispute Threatens DR-CAFTA • AAFA Continues to Push for Passage of FSC/ETI Compliance Bill • US Government Quickly Rejects China Section 301 Petition • US Travel Goods Industry Urges Bush to Change US Trade Policy • AAFA Submits Comments on U.S. China Safeguard Sock Petition • New Apparel Trade Benefits Debated for Haiti • Mexico & Japan Sign Free Trade Agreement • Ex-Im Bank Export Financing Programs Help U.S. Textile/Apparel Firms Export • Quota Watch: Embargoes on the Horizon? • July Trade Numbers Released • AAFA Opposes Customs Leather/Plastic Coating Proposal • Cambodia Formally Joins WTO October 13 • US Brings WTO Case Against Inconsistent EU Customs • New Travel Advisories/Warnings CORPORATE SOCIAL RESPONSIBILITY • Low-Pay/Poor Benefits Causing Labor Shortages in China • FLA Issues Report on Overseas Factory Labor Conditions CUSTOMS NEWS • Legislation Proposes Extension of Customs User Fee • Coast Guard Will Board Ships from Countries That Have Not Complied with New International Security Code • AAFA Opposes Provision Senate-Passed Security Bill That Hurts Shippers • Ports of Los Angeles/Long Beach Extend Hours • Customs Annual Trade Symposium to be Held December 9-10 • Customs Requests Comments on Apparel Information Collection CUSTOMS RULINGS • Click here for information on how to obtain the latest Customs rulings. CITA NEWS/ANNOUNCEMENTS • CITA Denies Request to Revoke Previous CBTPA Short Supply Determination • US Government Requests Comments on CBTPA Short Supply Petition • US Government Requests Comments on Two Other CBTPA Short Supply Petitions • CBTPA Short Supply Petition Withdrawn • US Government Solicits Wool Tariff Rate Quota Applications/Comments on Increasing TRQ • CITA Sets 2005 Apparel Limits for AGOA/ATPDEA • Tanzania Handmade Articles Now Duty-Free under AGOA NEW REPORTS ON TRADE • USITC Releases Report on Economywide Impact of DR-CAFTA • China's WTO Entry Benefits US Businesses: Survey • Reports: DR-CAFTA Benefits both the US & Central America • WTO Annual Report: Trade Preference Programs Provide Few Long-Term Economic Benefits • World Economic Growth Expected to Reach 3.8 Percent in 2004 • Report Finds Rising US Demand for, But Falling US Production of Tailored Clothing UPCOMING EVENTS/SEMINARS • October 25 - November 1, 2004 - AAFA Announces First Trade Mission to China • November 8-9, 2004 - U.S. Department of Commerce Consumer Goods Trade Mission to China MARKET RESEARCH • Argentina: Retailing of Sports Shoes and Sportswear • Australia: Apparel • European Union: Exporting Textiles and Textile Products to the European Union • Indonesia: Indonesia's Textile and Garment Industries Need New Machinery • Russia: Fashion and Apparel Trade Shows in Russia: New Tendencies and Events • United Kingdom: Maternity Wear Market in the U.K.
AAFA OPPOSES POLICY SWITCH ALLOWING "THREAT-BASED" CHINA TEXTILE SAFEGUARDS AAFA sent a letter to President George W. Bush on September 20 criticizing a recent Administration decision to suddenly change the standards through which the China textile safeguard petitions are evaluated. The letter argued that such changes to the safeguard should be contemplated only through a predictable and transparent rulemaking process and noted that existing procedures to review safeguard actions do not envision any way to evaluate petitions based on threat, which several U.S. textile industry officials have promised to file in the coming days. The letter further notes that this new attention to China diverts attention away from the U.S.-Central America/Dominican Republic Free Trade Agreement, which will create important economic opportunities for the U.S. textile industry once it is enacted. Also, AAFA and three other trade associations expressed their strong objections to the US government allowing "threat-based" petitions under the China textile safeguard for US imports of apparel still under quota. The September 13 letter to Undersecretary of Commerce for International Trade Grant Aldonas stated that allowing "threat-based" petitions would allow petitions based on assumptions and conjecture rather than facts, a situation expressly not permitted under the safeguard. Further, allowing "threat-based" petitions directly contradicts repeated assurances by US government officials to the contrary as well as the government's own published safeguard procedures and responses to previous petitions. The entire Democratic leadership of the US House of Representatives also recently sent a letter to President George W. Bush urging Bush to impose safeguard quotas and introduced legislation requiring the US government to immediately impose the China textile safeguard based on threat. The language in the legislation expressly admits that the U.S. government's current procedures do not allow for "threat-based" petitions. To add further uncertainty to the mix, the National Textile Association (NTA), which represents many U.S. textile manufacturers, urged the Bush administration on September 21 to "self-initiate" petitions under the China textile safeguard where the US government would initiate a review of Chinese apparel imports on its own, without a petition from an affected US industry. The Bush administration has not responded to NTA's request. The letters and legislation are in response to a recent announcement by a Bush administration official that the US government has changed policy and will now accept "threat-based" petitions under the China textile safeguard. As of September 24, no "threat-based" petitions have been filed. AAFA will continue to monitor this rapidly evolving situation.
The Office of the US Trade Representative (USTR) and key Members of Congress have issued stern warnings to the Dominican Republic (DR) in response to the budget recently passed by DR's lower house of Congress, the Chamber of Deputies, that includes a 25 percent tax on soft drinks containing high-fructose corn syrup (HCFS) as a way to increase needed revenue and protect the DR's sugar industry. HCFS is used as a sweetener in soft drinks and some candy and is a key agricultural export of the United States. Both USTR and Members of Congress have warned the DR that if the new tax remains in place, Congressional passage of the US/Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) and/or DR's inclusion in DR-CAFTA itself could be threatened. In response, the government of new Dominican President Leonel Fernandez urged the Dominican Senate not to approve the 25 percent tax. The Senate will consider the measure shortly. ACTION NEEDED!!! Please contact your colleagues in the DR as soon as possible to stress to them the importance of resolving this issue quickly, and the possible negative impact on the future of DR-CAFTA.
As reported periodically since March of this year, AAFA continues to push for the passage of the Foreign Sales Corporation/Extraterritorial Income (FSC/ETI), (H.R. 4520) American Jobs Creation Act of 2004 and (S.1637) Jumpstart Our Business Strength (JOBS) Act of 2004. As part of this effort, AAFA has signed onto several letters, one with 318 associations and corporations, in support of action. Additionally, AAFA is part of an advertisement sponsored by the American Forest & Paper Association urging action on FSC/ETI. The House and Senate are poised to finally begin a conference on the two bills passed by their respective chambers. The European sanctions, which are now at 11 percent, will not be lifted until Congress passes a final bill and the President signs it. A final bill will bring the United States into compliance with World Trade Organization obligations, and thus, require the EU to lift the sanctions. If a final bill is not passed before the elections, action may not be taken before the maximum tariff of 17 percent is reached next March. A long list of apparel and footwear items is on the tariff retaliation list. ACTION NEEDED!!! If your company is affected by these tariffs, and you would like to sign onto a letter or contact your member of Congress to urge action, please contact Felicia Cheek at 703.797.9039.
The US government on September 9 rejected a Section 301 complaint filed by a group of US industries and labor unions that requested that the US government place 40 percent punitive duties on all US imports from China in response to China's alleged currency manipulation. The petitioners claimed that China's alleged currency manipulation has placed US manufacturers at a significant cost disadvantage. In an unusual move, the US government's rejection of the petition occurred on the same exact day the Section 301 petition was filed.
Over 70 US companies and associations representing all sectors of the US travel goods industry (including AAFA and a number of AAFA members) sent an open letter September 10 to President George W. Bush urging the US government to immediately correct US trade policy towards travel goods. The US companies that signed the letter make, market and/or sell travel goods in the US market and around the world, including luggage, business and travel accessories, business and computer cases, handbags/purses, duffle bags, backpacks, wallets, portfolios, carrying cases and other products for people who travel. The signatories urge the Bush administration to immediately change the US government's trade policy so that ALL travel goods (both textile and non-textile) are duty-free immediately under flexible rules of origin in all free trade agreements negotiated by the United States. While the letter notes that the US travel goods industry appreciates the Bush administration's continued support of free trade and its continued efforts to open foreign markets to US-made and US-branded travel goods, the letter's signatories believe now is the time to change US trade policy in order to help US travel goods firms become more competitive in the US market and throughout the world. Until now, the Bush administration has continued to treat textile travel goods under harsh "textile" terms in trade agreements, which render them meaningless for promoting travel goods trade through free trade agreements
AAFA submitted comments August 23 to the Committee for the Implementation of Textile Agreements (CITA) expressing serious procedural and data concerns regarding the current petition requesting a safeguard action on imports from China of cotton, wool and man-made fiber socks. AAFA does not believe that sufficient information has been presented to support the claim that imports from China are causing market disruption. Proceeding with a petition that has weak data or that attempts to set unsustainable precedents undermines the integrity of the safeguard process and fosters uncertainty. In particular, AAFA notes that most of the items in the petition have not demonstrated a sustained surge as required by the safeguard, with two of the items actually still under quota. Even for the few items that have some sustained growth, most of that growth has either come at the expense of other supplier nations or is occurring simultaneously with import growth from other sources. Further, AAFA finds that the market share for overall sock imports has grown faster than China's import share, implying that sustained growth is occurring in other countries besides China. Finally, the comments note that the petition's own employment numbers demonstrate that U.S. sock employment was declining at the same rate prior to China's entry into the World Trade Organization (WTO) as after China's entry, implying that China is not the root cause of the decline of U.S. sock employment. CITA must issue its decision on the sock petition by the end of October.
AAFA Board Member Bill Woltz Jr. of Perry Manufacturing joined a panel of textile, apparel and retail executives during a September 22 House Ways and Means Trade Subcommittee hearing to discuss legislation to expand trade preferences with Haiti. The focus of the hearing was on legislation introduced by US Senator Mike DeWine (R-OH) and US Representative Clay Shaw (R-FL) to modify Haiti’s existing trade preference program for apparel to permit a limited quantity of third country inputs. The hearing addressed other rule of origin scenarios – such as a value added or single transformation approach – as well as the current labor situation. A witness representing the Haitian private sector noted that Haiti is working to improve labor standards, singling out the role that the Worldwide Responsible Apparel Program (WRAP) plays in helping factories achieve good workplace standards. The Subcommittee will now turn its attention to crafting legislation to expand Haitian trade preferences, partly to help Haiti remain competitive after 2005 and partly as a response to recent humanitarian crises in Haiti, including devastation by Hurricane Jeanne. The US Senate already passed Haiti legislation earlier this year by unanimous consent. The Senate-passed bill would allow a limited amount of Haitian apparel using third-country fabrics to enter the United States duty-free. Although key House members support a Haiti package, it remains unclear whether there is sufficient time before the end of the year for final action by Congress. AAFA will continue to track this fast-developing issue closely.
Japan and Mexico signed a free trade agreement (FTA) on September 17 in Mexico. The Japan/Mexico FTA (full text of the agreement), which goes into effect in April 2005, will provide significant benefits for footwear, apparel and travel goods. Under the FTA's footwear provisions, 250,000 pairs of leather footwear from Mexico can enter Japan duty-free immediately under a tariff-rate quota (TRQ). The TRQ will grow to 518,000 pairs by April 2009 and will be unlimited by April 2015. Duties on all other footwear will be eliminated within 7-10 years. All footwear must meet a North American Free Trade Agreement (NAFTA)-style rule of origin that requires 55 percent regional value content and no third-country uppers. All apparel can enter each country duty-free immediately under a yarn-forward rule of origin based on the essential character of the garment with a 7 percent "de minimus" exception. $200 million worth of apparel from Mexico, however, can enter Japan duty-free immediately under a simple and flexible substantial transformation rule of origin. The travel goods provisions eliminate all duties on all travel goods (both textile and non-textile) over a 7-year period as long as the travel goods meet a 50 percent regional value content rule of origin.
At the urging of AAFA and under the strong leadership of Jim Leonard, Deputy Assistant Secretary for Textiles and Apparel at the U.S. Department of Commerce, Commerce announced that the US Ex-Im Bank now has a series of export financing programs to help US textile and apparel manufacturers export their products, including working capital loans to US manufacturers and loan guarantees for foreign buyers of US textiles and apparel. AAFA is working with Commerce and others to obtain similar financing options for US textile and apparel firms from other government agencies such as the US Overseas Private Investment Corporation (OPIC) and the US Trade & Development Agency (TDA).
With the elimination of quotas on January 1, 2005 and no carry forward or swing available to borrow from future quotas, quotas on U.S. imports of apparel and textile products in certain categories from certain countries could fill sometime this fall. AAFA, in each issue of International Trade Update, will track individual items that have already filled a certain percentage of their quota. For the latest information on quota fill-rates, please go to the US Department of Homeland Security's Bureau of Customs and Border Protection Website. As of September 21, quotas in the following apparel and textile product categories are more than 80 percent full: • Belarus - Category 435 - W&G Wool Coats - 97.1 percent filled. • Bulgaria - Category 435 - W&G Wool Coats - 86.3 percent filled. • Canada - TPL 3 - 82.2 percent filled. • China - Category 342 - Cotton Skirts - 80.3 percent filled. • China - Category 350/650 - Robes/Dressing Gowns - 83.3 percent filled. • China - Category 435 - W&G Wool Coats - 83.5 percent filled. • China - Category 438 - Wool Knit Shirts & Blouses - 82.4 percent filled. • India - Group II - Various Apparel/Textiles - 75.4 percent filled. • India - Category 340/640 - M&B Woven Shirts - 80.4 percent filled. • India - Category 347/348 - Cotton Pants - 81.0 percent filled. • Indonesia - Category 334/335 - Cotton Coats - 87.6 percent filled. • Malaysia - Category 435 - W&G Wool Coats - 82.1 percent filled. • Pakistan - Category 369-S - Cotton Shop Towels - 90.8 percent filled. • Philippines - Category 341/641 - W&G Shirts & Blouses - 91.4 percent filled. • Philippines - Category 342/642 - Skirts - 90.8 percent filled. • Philippines - Category 433 - M&B Suit-Type Coats - 92.4 percent filled. • Philippines - Category 443 - M&B Wool Suits - 92.8 percent filled. • South Korea - Category 435 - W&G Wool Coats - 80.8 percent filled. • South Korea - Category 443 - M&B Wool Suits - 83.8 percent filled. • South Korea - Category 444 - W&G Wool Suits - 85.6 percent filled. • Turkey - Category 448 - W&G Wool Slacks & Shorts - 94.9 percent filled. • Vietnam - Category 338/339 - Cotton Shirts - 96.0 percent filled.
US apparel imports increased 0.1 percent in the first seven months of 2004 versus the first seven months of 2003 to 10.9 billion square meter equivalents (SME) worth $35.3 billion while US footwear imports rose significantly during the same period, growing 8.4 percent to 1.4 billion pairs worth $9.6 billion. US apparel imports from Central America and the Dominican Republic fell 2.7 percent in the first seven months of 2004 versus the first seven months of 2003. For more information, please see AAFA's September 10 press release on the latest trade statistics.
AAFA joined with two other associations in sending a September 23 letter to the U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) urging Customs to oppose a proposal to amend Chapter 42 (leather goods) of the Harmonized Tariff System (HTS) with an new explanatory note at next week's World Customs Organization's (WCO) Harmonized System Committee meeting in Brussels. The proposed explanatory would impose an "invisible to the naked eye" test on leather goods to determine if they are "outer surface of leather" or "outer surface of plastic sheeting." Basically, if the finish on a leather handbag is "invisible to the naked eye" then it is considered "outer surface of leather." The associations, which represent the U.S. leather goods industry, strongly oppose the "invisible to the naked eye" because is too subjective and contrary to both well-established industry standards and US Customs’ established practice in classifying leather goods. An “invisible to the naked eye” test will lead to disparate treatment of the same merchandise due to different interpretations, not only among the Customs Agencies in different countries throughout the world, but even among different ports within an individual country, or even within a port, depending on the presiding Customs official. The associations instead urge US Customs to propose the industry 0.15mm thickness standard for leather goods.
Cambodia will formally join the World Trade Organization (WTO) on October 13. As a member of the WTO, all remaining quotas on US imports of Cambodian apparel will be removed on January 1, 2005. Cambodia will continue its unique program with the International Labor Organization (ILO) to monitor labor rights in Cambodia's apparel industry until at least January 1, 2006. Cambodia has also announced plans to implement additional and more stringent labor rights certification programs for its apparel industry before the end of 2005.
United States Trade Representative Robert B. Zoellick announced September 21 that the United States filed a World Trade Organization (WTO) case against the European Union (EU) regarding the inconsistent implementation of EU customs laws and regulations. The US case alleges that many important aspects of customs administration in the EU are handled differently by different member State customs authorities, resulting in inconsistencies from State to State. Although the EU is a customs union, there is no single EU customs administration. Lack of uniformity, coupled with lack of procedures for prompt EU-wide review, can hinder U.S. exports, particularly for small to mid-size businesses. For example, goods may be classified differently and thus be subject to different tariffs depending on the EU member State through which they are imported. Similarly, a US exporter may be able to obtain binding guidance in one member State on how its goods will be valued for tariff calculation purposes, but the exporter may not be able to rely on that guidance in another member State. In some member States, the exporter may not be able to obtain binding valuation guidance at all. WTO rules require WTO Members to administer their customs laws in a uniform, impartial and reasonable manner.
The U.S. State Department has issued new travel advisories/warnings for the Bahamas, Bangladesh, Cayman Islands, Cuba, Grenada, Indonesia, Iraq, Jamaica, Nepal, Russia, Turks and Caicos and Uzbekistan. Access all advisories on State's Web site.
LOW-PAY/POOR BENEFITS CAUSING LABOR SHORTAGES IN CHINA A new report released September 8 by the Chinese Labor Ministry as well as increasing anecdotal evidence cite long working hours, low pay, poor working conditions and growing opportunities at home as the reasons behind a growing labor shortage in the key manufacturing powerhouses in China, including the provinces of Guangdong, Zhejiang and Fujian. Increasing shortages in key industrial regions, including the Pearl River Delta, are forcing some factories to delay fulfilling or even canceling orders. These regions largely depend on migrant workers from rural parts of China. Wages are rising in rural regions, forcing factories in the industrial regions to raise wages or improve working conditions or risk losing their workers to competing factories or returning to their home provinces. Although Labor Ministry estimates that the industrial regions face labor shortages of over 2 million workers seems inflated, many believe that significant shortages are starting to appear in numerous industries, including apparel and footwear.
Out of 110 apparel factories in 20 countries, almost half did not fully comply with standards on health and safety while one-third failed to pay legally mandated benefits to their workers, according to the Fair Labor Association's (FLA) second annual public report released August 19. FLA, one of a number of industry-backed groups whose purpose is to monitor and publicize conditions in foreign contractors, noted in its report that although significant improvements have been made at many of the factories, others are still not in compliance with international labor standards.
LEGISLATION PROPOSES EXTENSION OF CUSTOMS USER FEE The US Senate approved by voice vote on September 10 an amendment to the proposed FY 2005 Homeland Security Appropriations Bill (HR 4567) that would extend Customs user fees, now due to expire in March 2005, to September 2005. The Senate amendment would use the fees to pay for border security improvements and other homeland security needs. The appropriations legislation must still pass the full Senate and then must be reconciled with the House-version of the legislation before being sent to President George W. Bush for his signature. Press reports indicate that the Customs user fee provision might be dropped from the legislation because Congressional leaders had intended to sue that revenue to offset the costs of the FSC/ETI legislation (See Related Story).
The US Coast Guard announced September 10 that it will board all ships entering the United States from ports in 17 countries that have failed to comply with the new International Ship and Port Facility Security Code (ISPS). The countries are: Albania, Benin, Democratic Republic of Congo, Equatorial Guinea, Guinea, Guinea-Bissau, Kiribati, Lebanon, Liberia, Madagascar, Mozambique, Nauru, Nigeria, Serbia and Montenegro, Sierra Leone, Solomon Islands and Suriname. The Coast Guard will be targeting vessels for increased boardings when arriving in US ports if they have visited one of these countries during their last five port calls.
S 2279, a bill dealing with maritime transportation security issues, passed the US Senate by unanimous consent on September 21 despite widespread opposition from an AAFA-supported coalition of shippers and affected industries to a provision in the bill. The bill contains a provision calling for the "Security of Piers and Wharfs" that could cost shippers an enormous headache. According to the "Security of Wharfs and Piers" provision, all uncleared containers sitting at dock longer than 7 days are subject to a $5,000 fine, levied by Customs and Border Protection, and are to be removed to a general order warehouse where the container will undergo an intrusive inspection. The legislation now moves to the US House of Representatives for consideration, where the future of the legislation is unclear.
The Ports of Los Angeles and Long Beach announced August 23 a new program called PierPass, an unprecedented program that will provide port-wide, full-service operations on weekends and evenings when trucks will not compete with commuter traffic. The program responds to the needs of the trucking community for port-wide operations during off-peak hours. PierPass further responds to the needs of shippers and importers by making efficient use of the ports’ infrastructure to ensure the continued flow of more than 12 million cargo containers annually. A new fee of $20 per 20-foot container will be charged to pay for the expanded service, which will be phased-in beginning November 1.
The US Department of Homeland Security's Bureau of Customs and Border Protection (Customs) announced that it will hold its Fifth Annual Trade Symposium December 9-10, 2004 in Washington, DC. The Symposium, titled Security and Facilitation of Trade: The Way Forward, will include discussions on Trade Act of 2002 implementation, the Container Security Initiative (CSI) and other relevant border security issues.
The U.S. Department of Homeland Security's Bureau of Customs and Border Protection (Customs) requests comments on the burden of the information collection required to comply with its form titled Articles Assembled Abroad with Textile Components Cut to Shape in the U.S. Comments are due September 30.
Advisory Note on Customs Rulings - Readers are cautioned against relying on a ruling issued to another importer. If Customs decides to change its position with regard to a ruling, only the party to whom the ruling was issued is insulated from financial loss. Also, a ruling may depend on very specific physical specifications of a product. Even the slightest deviation from those specifications may throw into question the applicability of the ruling. Rulings are useful tools, but must be handled with care. To see all Customs rulings for the past two months, please go to the US Department of Homeland Security's Bureau of Customs and Border Protection Customs Rulings Online Search System (CROSS).
CITA DENIES REQUEST TO REVOKE PREVIOUS CBTPA SHORT SUPPLY DETERMINATION CITA announced August 31 that it has denied a petition that requested that CITA revoke a previous short supply designation that determined that certain coated, fusible interlining fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner under the Caribbean Basin Trade Partnership Act (CBTPA). With CITA's denial, apparel made using certain third-country coated, fusible interlining fabrics in Central America or the Caribbean can still enter the United States duty-free under CBTPA.
CITA and the U.S. International Trade Commission (ITC) request comments on a September 20 petition alleging that certain circular single knit jersey fabric, classified in subheading 6006.32.00.80 of the Harmonized Tariff Schedule of the United States (HTSUS), cannot be supplied by the domestic industry in commercial quantities in a timely manner (in short supply) under the Caribbean Basin Trade Partnership Act (CBTPA). If CITA approves the request, apparel made using certain third-country circular single knit jersey fabric in Central America or the Caribbean can enter the United States duty-free under CBTPA. Comments are due to CITA and the ITC October 13.
CITA and the U.S. International Trade Commission (ITC) request comments on a two petitions alleging that 1) certain circular single knit jersey fabric, for use in women's and girl's nightwear, (CITA request - ITC request) and 2) certain twill rayon/nylon/spandex warp stretch fabric (CITA request - ITC request) cannot be supplied by the domestic industry in commercial quantities in a timely manner under the Caribbean Basin Trade Partnership Act (CBTPA). If CITA approves the short supply requests, apparel made using certain third-country circular single knit jersey fabric and/or certain twill warp stretch fabric (as described in the petitions) in Central America or the Caribbean can enter the United States duty-free under CBTPA. Comments on both petitions are due to the ITC October 1. Comments to CITA were already due September 23.
CITA announced September 1 that Fishman & Tobin has withdrawn one of its four August 3 petitions alleging that certain fancy polyester/rayon suiting fabrics are in short supply (not available in commercial quantities in a timely manner) under the Caribbean Basin Trade Partnership Act (CBTPA).
The US Department of Commerce (Commerce) is soliciting applications from entities that cut and sew men's and boys' worsted wool suits and suit-like jackets and trousers for an allocation of the 2005 tariff rate quotas on imports of certain worsted wool fabric. Applications are due today, September 24. In a related note, Commerce requests petitions to modify the current TRQ levels on imports of certain worsted wool fabrics. Petitions are due October 5.
CITA has come out with the new limits for the 2005 quota year (October 1, 2004 to September 30, 2004) for the Africa regional/third country fabric provision in the African Growth and Opportunity Act (AGOA) and the Andean regional fabric provision in the Andean Trade Promotion & Drug Eradication Act (ATDEA). The limit for the Andean regional fabric provision is 709,772,286 square meters equivalent. The limit for the African regional fabric provision is 1,076,876,652 square meters equivalent. Of this amount, 535,938,914 square meters equivalent is available to apparel imported under the special rule for lesser-developed countries (the third country fabric rule).
Effective May 5, CITA has designated US imports of handloomed/handmade articles from Tanzania duty-free under the African Growth and Opportunity Act (AGOA).
USITC RELEASES REPORT ON ECONOMYWIDE IMPACT OF DR-CAFTA On August 26, the US International Trade Commission (ITC) released its U.S.-Central American-Dominican Republic Free Trade Agreement: Potential Economywide and Selected Sectoral Effects. The report notes that this FTA, as with similar trade agreements, will have little impact on the overall US economy. However, the report predicts some gains for the textile and apparel sectors, in the form of increased exports to the Central American region, while noting that increased imports are not likely to have an adverse impact as they will largely displace imports from other parts of the world.
Sixty-one percent of US businesses operating in China believe China's entry into the World Trade Organization (WTO) benefited their business, with over three quarters earning a profit from their China ventures. According to the American Chamber of Commerce in China's September 16 release of its 2004 White Paper on American Business in China, however, the overwhelming majority of the 238 companies surveyed by the Chamber expressed increasing concerns over growing intellectual property rights (IPR) problems in China and urged China to quickly address the issue. Those companies also believed that increasing US security post-September 11 has led to an unwarranted number of visa denials for Chinese traveling to the United States for business purposes. Those visa denials have, in turn, caused an estimated $30 billion in lost business for US firms over the past two years.
DR-CAFTA would offer guaranteed reciprocal access for the most competitive US exports and enhance important US foreign policy goals by promoting freedom and democracy in a region that has been troubled in the recent past by wars and political oppression according to a new report released September 21 by the CATO Institute. The report by CATO, a leading libertarian think tank, also notes that all six DR-CAFTA countries have adopted laws consistent with core labor standards as established through the International Labor Organization. All six have made measurable progress on a range of social indicators. Promoting trade and development through DR-CAFTA would further that progress. A September 14 report by the Heritage Foundation, a leading conservative think tank, echoed the findings in the CATO report, namely that DR-CAFTA will enhance economic opportunities in the region and in America.
Trade preference program provide few economic benefits to beneficiary countries, according to the September 16 release of the World Trade Organization's (WTO) 2004 World Trade Report. The WTO's annual report also found that benefits from good trade policy may be attenuated or even undermined if governments pursue deficient policies in other areas of economic activity, including promoting transparency, institution-building and infrastructure.
Economic growth is expected to reach 3.8 percent in 2004, driven by growth in the United States and China, according to a new report from the United National Conference on Trade and Development (UNCTAD). UNCTAD's Trade and Development Report, 2004 found that growth could be slowed, however, if world oil prices remain at historical highs. The report also noted that growth in Europe continues to lag behind the rest of the world, in part due to its overvalued currency. China, expected to grow 8.5 percent in 2004, should be cautious in moving to a flexible exchange rate, stated the report, because too rapid of a move could destabilize countries throughout Asia.
On September 21, the U.S. International Trade Commission released U.S. Market Conditions for Certain Wool Articles in 2002-04. The report found that US demand for men's and boys' worsted wool tailored clothing showed signs of improvement in the latter half of 2003 and first quarter of 2004. The increased demand was concentrated in fine-micron tailored clothing, reflecting a shift in consumer tastes to higher end fabrics. US production of the tailored clothing declined during 2001-03 and imports increased, continuing to supply most of the tailored clothing market.
OCTOBER 25-NOVEMBER 1, 2004 - AAFA ANNOUNCES FIRST TRADE MISSION TO CHINA AAFA is pleased to announce its first Trade Mission to China, to visit two of the main apparel production centers there -- Shanghai and Guangzhou/Dongguan. The tour will feature mini-exhibitions in both locations, and then visits to factories that meet the specific requirements of the mission participants, and other selected textile and apparel facilities. It is geared to "new to market" apparel and supplier firms, but experienced firms might also make some useful new contacts. Our host is the China Chamber of Commerce for Import and Export of Textiles, the largest and most influential trade group in China for our industry. The Mission will end in Hong Kong with a speech by Kevin Burke to the American Chamber of Commerce Textiles and Apparel Committee, another great venue for meeting new contacts. Please see the AAFA website for additional information or contact AAFA's Fawn Evenson at 703-797-9056.
The US Department of Commerce announced that it will lead a group of US consumer goods firms on a trade mission to China on November 8-9, 2004. The purpose of the mission is to meet Chinese government officials and representatives of the Chinese consumer goods and retail industries to discuss trade and distribution rights, intellectual property rights and other issues affecting U.S. consumer goods firms operating in China. Applications are due to Commerce by September 10.
NEW U.S. GOVERNMENT MARKET RESEARCH REPORTS Please click on the date to obtain a copy of the market research report. • August 25 - Australia: Apparel • August 18 - Indonesia: Indonesia's Textile and Garment Industries Need New Machinery • August 25 - Russia: Fashion and Apparel Trade Shows in Russia: New Tendencies and Events • August 26 - European Union: Exporting Textiles and Textile Products to the European Union • August 27 - Argentina: Retailing of Sports Shoes and Sportswear • September 15 - United Kingdom: Maternity Wear Market in the U.K.
For questions or for additional information, please contact Nate Herman, AAFA's International Trade Advisor, at 703-797-9062 or nherman@apparelandfootwear.org. American Apparel & Footwear Association |
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