ORIGIN RULE CHANGE DEFENDED BY KANTOR BEFORE SENATE PANEL

Byline: Joyce Barrett

WASHINGTON--Appearing before the Senate Commerce Committee Wednesday, U.S. Trade Representative Mickey Kantor defended the controversy-wracked rule of origin change for apparel imports that is contained in the implementing legislation for the GATT worldwide trade accord.
Meanwhile, the timing of the House vote on the GATT bill, which had been scheduled for Wednesday, was still uncertain at press time, with some House members traveling out of the capital during the day to attend the funeral of a former colleague. House leadership was apparently using the delay to build support for the bill, which has run into some strong resistance. (Wednesday night, House Minority Leader Robert Michel (R., Ill.) said the House would go ahead with a procedural vote that night to allow debate but would hold off polling on the bill itself until late November. He added that he was sure the bill would pass.)
The import rule change, inserted into the bill at the insistence of the domestic textile industry, shifts the origin designation for quota purposes from where the apparel is cut to where it's assembled, upsetting established sourcing patterns.
"We're the only country in the world with a cutting rule of origin that has allowed China to send apparel to the United States through Hong Kong," Kantor told the Senate panel. "This change harmonizes us with the rest of the world. But we still have to write the rule in Treasury.
"It wasn't fair to the textile industry the way we were doing it," Kantor added.
Kantor discussed the rule of origin change in response to a question from Sen. Bob Packwood (R., Ore.), who had attempted unsuccessfully on behalf of retailers to keep the rule change out of GATT. Retailers and importers vigorously fought against the rule change, arguing it would mean higher prices for clothes. Its inclusion in the GATT bill cost the legislation the support of the National Retail Federation, International Mass Retail Association and the U.S. Association of Importers of Textiles and Apparel.
Kantor also outlined the various economic gains GATT is expected to bring the U.S., but he failed to convert long-time GATT foe Sen. Ernest F. Hollings (D., S.C.), who chairs the committee.
"I don't want to agree," Hollings told Kantor. "The crowd that came to town to bolster the playing field for the middle class is decimating it."
Hollings, by taking advantage of a rule that allows him to review the implementing legislation for 45 days, has delayed a Senate vote on GATT until Dec. 1.
In the House, a vote on a procedural measure that would allow the House to consider GATT was tentatively set for Wednesday night, although Democratic leadership had set a late Wednesday afternoon meeting to again review the situation. The vote that been set for Wednesday was delayed so House members could attend the Alabama funeral of former Rep. Claude Harris Jr. (D., Ala.), who served in the House from 1987-92.
"We will have a final GATT vote this week," House Speaker Thomas Foley (D., Wash.), told reporters Wednesday afternoon. "We are not retreating on GATT in any way."
Yet the future of the agreement remained uncertain, as House leadership continued to poll members on their stance on the procedural measure, called a rule, and on the trade bill itself.
Rep. Sam Gibbons (D.,Fla.), acting chairman of the House Ways and Means Committee, acknowledged early Wednesday that Democrats did not have the votes to pass it without Republican support. With Republicans irate over the timing of the vote before November elections and items in the implementing bill they found undesirable, their support was uncertain.
--Fairchild News Service

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