By  on October 1, 2007

WASHINGTON — U.S. socks producers are making their case for safeguards against Honduran imports.

Domestic producers say they have been pushed to the breaking point because of the surge in socks from Mexico that occurred when the North American Free Trade Agreement went into effect; more imports from Asia, and now, more from Honduras under the Central American Free Trade Agreement.

The point man on the issue is Matthew Priest, chairman of the interagency Committee for the Implementation of Textile Agreements, which in August said it was considering temporary tariffs on socks made in Honduras under a provision of CAFTA that has not yet been used.

During the first half of this year, 10.2 percent, or 12.3 million dozen pairs, of cotton, wool and man-made fiber socks shipped to the U.S. came from Honduras, up from a 6.7 percent share of the import market a year earlier, at least partly because of duty free treatment under CAFTA.

That 65.2 percent increase in Honduran sock imports fired up U.S. producers such as Ned Covington, president of 87-year-old Harriss & Covington Hosiery Mills Inc. in High Point, N.C., who was among those who responded to CITA's request for public comment on safeguard tariffs.

Covington, the fourth generation of his family to work at the mill, said it employs more than 245 people with an annual payroll of almost $7 million and provides health and life insurance as well as retirement benefits, while complying with laws governing social compliance and environmental protection.

"We find our company in greater jeopardy than ever before," Covington said in his comments to Priest. "Not because we haven't reinvested in our facilities and equipment, not because we can't find qualified employees, not because we can't manage our business. The cause of our diminished outlook is directly attributable to the trade policies of our own government."

After weathering competition with Mexico and then Asian countries, Covington said CAFTA opened up "another entire region to supply cheap imports without having to comply with the laws and regulations and unnecessary paperwork required by our own government."

U.S. socks producers have in general outlasted their apparel counterparts and still have a significant presence, making up 33.2 percent of the total U.S. socks market last year, though that was down from 37.9 percent in 2005.Opponents of new restrictions argued that clamping down on Honduran imports would help Asian suppliers and hurt U.S. textile concerns, which count Central America as their largest market.

"The CAFTA treaty has been successful in encouraging U.S. companies to invest in Honduras and these companies are using yarn manufactured in the U.S.," wrote Dalton McMichael Jr., president of McMichael Mills Inc. in Madison, N.C. "If the United States imposes duties on socks manufactured in Honduras, companies there will likely purchase their yarn from countries in the Far East that subsidize their textile industry."

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