CHINA SILK APPAREL SAID TO BE SCRATCHED FROM DUTY HIT LIST

Byline: Jim Ostroff

WASHINGTON--U.S. trade officials have decided to drop silk apparel from a $2 billion list of Chinese products that could be hit with mammoth import duties, sources said Wednesday.
The duties would be levied in a sanctions list that will be imposed Monday, unless China takes concrete steps to end piracy of U.S. computer software, music and movies.
However, the sources added, no sanctions list is final until it's released; there is a possibility that strategies could change and silk could appear on the list.
Still, sources said, it appears that a committee composed of officials with most Cabinet agencies in essence bought the arguments raised by importer, retailer and domestic textile industry officials at hearings last week that there is no alternative to China for silk apparel. The committee was charged by the U.S. Trade Representative to recommend Chinese products that could be hit with 100 percent import duties. A preliminary $3 billion list issued May 15 is to be reduced to $2 billion. Apparel comprised about $2 billion of the original list and silk apparel was a major component, valued by the U.S. at $750 million.
Of course, even with the dropping of silk, about $1 billion or more worth of Chinese cotton and man-made fiber apparel, including the major trouser, shirt and blouse categories, could remain on the list and be subject to so-called killer duties.
"If the reports are true regarding silk being removed from the sanctions list, this could save the holiday season for us, because it would permit everyone to buy and sell product on a normal basis, allow retailers to make purchase commitments," said Andrew Jassin, a partner with the Marketing Managing Group, and president, the National Silk Apparel Distributors Association. "The point is that if silk remains on the list and sanctions are imposed, our companies go out of business immediately."
Meanwhile, Charlene Barshefsky, acting U.S. Trade Representative, announced Wednesday she would fly to Beijing to engage in marathon talks this weekend with her Chinese counterpart--leaving two days to avert the imposition of 100 percent import duties on Chinese apparel.
Retailers, importers and apparel makers expressed cautious optimism that eleventh-hour negotiations with China on intellectual property piracy will succeed. But they warned that should a snafu develop, nothing can be done now to avert what some see as major apparel price hikes and out-of-stock situations.

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