WASHINGTON — Many lightweight sweaters made in China have been derailed on their way to the selling floor this year because of confusion at the U.S. border over a trade agreement that took effect Jan. 1.
The disconnect appears to have been resolved, though not without some extra quota-related costs to importers as well as headaches. Goods are still stuck at the border, but some should be released soon, government officials and importers said.
“It really was a Customs [and Border Protection] definition problem that we think has been resolved now,” said a U.S. trade official, speaking on the condition of anonymity. “[Now] fine-gauge knit sweaters that are knit to shape come in quota-free.”
The delays came after a deal was signed by the U.S. and China in November that placed restrictions on 34 kinds of apparel and textile imports from China. The agreement expires at the end of 2008.
Excluded from the restrictions, or quotas, were knit-to-shape sweaters that met specific technical requirements, such as a stitch count of 10 to 18 stitches every 2 centimeters.
“This fairly narrow definition was negotiated into it [the deal] and then when Customs got their hands on it they took a very literal reading of it, and in doing that they made it more narrow than was intended by the negotiators,” the trade official said.
The confusion has cost vendors that have either had goods stopped at the border or paid to bring in the sweaters under quota to insure delivery.
Elan Eliau, principal and chief executive officer of New York-based knit house Joseph A, said he was paying about 15 percent extra to bring in goods under quota.
“Until there’s more clarity and until everything kind of unfolds, that’s your best bet,” he said. “Even though that affects the costs of the goods, I am not raising my prices to the customers and am just absorbing it.”
Jeffrey Meier, vice president of global sourcing at Hampshire Group, said he is hoping for clarification on the definition for more adorned sweaters.
“Since these basic knit-to-shape and linked lightweight sweaters are not made in [any other] part of the world, we have not choice but to go to China,” said Meier. “Why wouldn’t we also at the same time include enhancements to these basic sweaters when the enhancements, such as hand-crochet trims, are also only made in China. If U.S. Customs continues to reject the trim-enhanced sweaters, it will create a lot of problems in the market and a lot of further delays.”
This story first appeared in the February 14, 2006 issue of WWD. Subscribe Today.