WWD.com/fashion-news/fashion-features/controversial-trade-bill-moves-on-to-the-senate-755385/
government-trade
government-trade

Controversial Trade Bill Moves On to the Senate

WASHINGTON — A trade bill with apparel-duty-dropping provisions for Andean countries, the Caribbean Basin and sub-Saharan Africa is set to be voted on by the Senate this week after narrowly passing the House early Saturday.<br><br>The...

WASHINGTON — A trade bill with apparel-duty-dropping provisions for Andean countries, the Caribbean Basin and sub-Saharan Africa is set to be voted on by the Senate this week after narrowly passing the House early Saturday.

This story first appeared in the July 29, 2002 issue of WWD.  Subscribe Today.

The controversial package, which also renews the President’s negotiating authority to more actively pursue market-opening agreements with foreign countries, is being praised by retailers and other importers.

“It’s not everything we wanted, but it’s a net positive and we’re happy,” said Erik Autor, vice president and international trade counsel with the National Retail Federation. However, he was disappointed that the bill did not entirely lift restrictions on the amount of T-shirts made in the Caribbean basin of regional fabric that could be shipped to the U.S. duty-free.

“This package contains many important initiatives sought by the U.S. apparel and footwear industries,” said Kevin Burke, president and chief executive officer, American Apparel and Footwear Association. The bill also drops duties on Andean footwear, in addition to handbags, without limits.

From the domestic textile industry, reaction was generally critical, although there’s strong support among yarn spinners because of benefits specific to them. Lawmakers said the bill was designed to boost U.S. fabric and yarn sales while helping poor economies of beneficiary countries.

“Last year the U.S. textile industry lost 67,000 jobs and 116 textile plants closed. This bill not only fails to recognize our suffering, but will exacerbate it,” wrote Van May, chairman of the American Textile Manufacturers’ Institute, in a letter to House lawmakers. May is also president of the Plains Cotton Cooperative, Lubbock, Texas.

Roger Milliken, owner of the textile giant Milliken & Co., in a statement called the bill a “give-away” that will cost the U.S. textile and apparel industry 150,000 jobs. “This legislation and the midnight rush for its passage are congressional disgraces,” Milliken said.

The textile and apparel trade breaks in the bill essentially reflect a slightly pared down version of earlier House-passed legislation. The final House-Senate compromise calls for:

l Dropping duties on apparel from the Andean nations of Colombia, Peru, Bolivia and Ecuador, if garments are made from U.S. or regional fabric and yarn. Shipments, however, are limited, not to exceed 2 percent growth over current imports for the year beginning Oct. 1 and increasing to 5 percent in 2006 when the breaks must be renewed. The region now supplies less than 1 percent of all U.S. apparel imports. In the first year, the region would be able to ship up to 320 million square meter equivalents worth of apparel made from regional fabric.

l Almost doubling, for the Caribbean basin, the amount of T-shirts and knit shirts made of regional fabric using U.S. yarn that can now be shipped, as provided under a 2000 trade bill. For knit shirts the 2002 limit starting Oct. 1 would be 500 million SMEs, increasing to 970 million SMEs in 2008 when the bill would have to be renewed. For T-shirts, the 2002 cap would increase to 9 million dozen, which would rise to 12 million dozen by 2008.

l Doubling the amount of duty free apparel from sub-Saharan Africa made of regional fabric or yarn. Year-over-year growth of existing imports would be capped at 2.17 percent for 2002 and increasing to 3.5 percent in 2007. U.S. fabric could also be used to receive duty-free treatment. In addition, Botswana and Namibia were added to the group of African countries deemed lesser developed and allowed to use fabric and yarn from anywhere and still receive duty breaks.

The bill in the Senate is widely expected to pass, with Majority Leader Tom Daschle (D., S.D.) backing the measure. Seen as helping to bring Senate Democratic votes on board are enhanced federal benefits — including a 65 percent health care subsidy — for workers laid off because of import competition or if their factories or production move off shore. Benefits will also be extended to contract workers for the first time.

The House voted mostly along party lines. For the bill were 190 Republicans and 25 Democrats. Opposing it were 183 Democrats and 27 Republicans.