Apparel to Be Hit by EU Tariffs

Apparel is prominent on a hit list of goods targeted by the EU for imposition of retaliatory tariffs if the U.S. does not repeal the Byrd amendment.

GENEVA — Apparel figures prominently on a hit list of goods targeted by the European Union for imposition of retaliatory tariffs if the U.S. does not repeal the Byrd amendment.

The Byrd amendment penalizes foreign companies that compete unfairly in the U.S. market by dumping goods — selling goods at below cost — or receiving government subsidies. At issue is the U.S.’s practice of distributing the penalty duties to U.S. companies hurt by the unfair competition. The practice was successfully challenged as an unfair trade practice by a World Trade Organization panel in September 2002 and upheld in an appellate ruling in January 2003.

The U.S. collected $728 million in penalty duties under that measure, which it then redistributed to U.S. firms, from 2001 through 2003. The WTO has ruled the redistribution violates its rules.

Brussels authorities plan to seek authorization to proceed with the tariffs at next Wednesday’s session of the WTO’s Dispute Settlement Body. The list includes 65 categories of apparel, textiles and footwear.

Since the U.S. has not yet complied with the findings, a WTO arbitrator in August of this year approved punitive sanctions against America equal to 72 percent of the duties it levied on imported products from the EU and seven other WTO member states — Brazil, Canada, Japan, South Korea, India, Chile and Mexico.

EU officials said they have not yet determined exactly how much their penalty tariffs will be or when they will be applied. They said they would prefer for the Byrd measure be repealed by Congress during the current lame duck session. However, if it is not, the punitive measure are likely to come into effect in the new year, sources said.

The lengthy list of goods targeted includes man-made fiber and wool coats and jackets; man-made fiber pants; cotton, synthetic fiber or silk dresses; clothing made of cellulosic fibers; knit shirts of cotton or synthetic fibers, and wool, wool-blend, cashmere and synthetic sweaters.

This story first appeared in the November 19, 2004 issue of WWD.  Subscribe Today.