WASHINGTON — Retailers and importers are facing the first pinch from the impending nonquota world.
The interagency Committee for the Implementation of Textile Agreements sent a shock wave through the retailing and importing community last week with a directive to U.S. Customs & Border Protection to deny entry in January to any apparel and textile products that were shipped over their quota limits this year.
U.S. retailers, apparel manufacturers and importers expressed outrage over CITA’s decision, which some deemed “punitive.”
In the past, if U.S. importers overshipped merchandise in a category that had been embargoed, executives would place the goods in a bonded warehouse until the end of the year and bring them into the U.S. in a new quota year after Jan. 1. Customs would then charge the amount of the goods against the country’s quota limits in the new year.
But CITA’s new directive for goods overshipped in 2004 is unprecedented, importers said, and caught many companies off guard.
“If an importer had waited until Jan.1 to have his order shipped from an exporting country, it would have arrived — most likely around Feb. 1 — depending on country, mode of shipment and other factors,” said a statement from CITA. “If an importer chose to have his product exported before Jan. 1 and the product is a quota product, there is a possibility the quota would have filled prior to the end of 2004. This situation would have been a violation of the agreement between the U.S. and the exporting country.”
Executives expected overshipped goods in 2004 to automatically be allowed entry on Jan. 1 because that is the date global quotas on apparel and textiles will be eliminated among World Trade Organization countries.
Further compounding the problem for U.S firms, CITA announced it will allow in only 5 percent of each category’s limits per month, beginning in February. CITA warned importers in June that it reserved the right to deny entry to goods that have been shipped in excess of quota limits. It did not issue its final directive, however, until Thursday.
There was a general concern that companies might be stockpiling products in warehouses at the end of the year, particularly those made in China, with the strategy of flooding the market in January once global quotas were removed. CITA’s action will prevent some import surges from happening in the short term.Customs has placed embargoes on 12 categories, and another five categories are on hold. The apparel categories that could be locked out of the U.S. until Feb. 1 if U.S. companies overshipped this year include wool coats from Bulgaria, cotton and man-made fiber bras from China, cotton and man-made fiber dressing gowns and robes from China, men’s and boys’ woven shirts from India, wool coats from Malaysia, men’s and boys’ wool suit coats and wool sweaters from the Philippines. Cotton sheets, shop towels, man-made fiber pillowcases and sheets from Pakistan are also at risk.
“We asked CITA for one thing: predictability,” said Peter Gaabe, chief operating officer of Carole Hochman Designs. “But they waited 20 days before the end of the year to confirm how they would process goods through the conversion period. I think it’s a shame our own government is damaging the very industry they are responsible for protecting.”
One U.S. manufacturing executive, who requested anonymity, said CITA’s action will cost his company $250,000 this month alone. He said he had a shipment of cotton and man-made fiber underwear arrive from India 10 days ago. It took five days to clear Customs, and during that five days the category embargoed, he said.
Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel, said, “This accomplishes nothing. It’s just punitive. This is the first time CITA has denied entry on goods for a month.”
Jacobs said she represents one company that imported wool coats from Bulgaria but got caught in an embargo at the end of November. The company had to store the coats in a bonded warehouse and expected to obtain them on Jan. 1.
“What is he going to do with wool coats in February?” Jacobs asked rhetorically. “He’ll have to send them back to Bulgaria.”
Erik Autor, vice president and international trade counsel at the National Retail Federation, said, “CITA is dragging this out as long as it can. It is really just an extension of quotas for another month, if not longer.”
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty