By  on February 14, 1994

BOCA RATON, Fla. -- Jennifer Hillman, the chief U.S. textile negotiator, said Saturday that Caribbean nations could receive new trade benefits to compete with apparel manufacturers in Mexico aided by NAFTA.

Speaking at the American Apparel Manufacturers Association's annual meeting here, Hillman also said China has not yet made sufficient progress on human rights issues to get renewal of its Most Favored Nation trade status.

She said the U.S. is having "very extensive dialogue" with the Chinese and will make a decision on MFN renewal in May.

Should MFN be denied, U.S.import duties on Chinese apparel would rise significantly.

The AAMA supports legislation that would grant the Caribbean nations trade parity with Mexico under the North American Free Trade Agreement. NAFTA allows much Mexican-made apparel to enter the U.S. duty-free. Clothing shipments from the Caribbean, under the 807 programs, get only partial reductions on duties, as did Mexico's garment makers before NAFTA.

"We want very much to work with you on this issue," Hillman told the U.S. apparel makers. "We know very well how important it is to you."

Later, she declined to elaborate on what kind of benefits could be granted Caribbean manufacturers.

Hillman, the last speaker at the three-day meeting held at the Boca Raton Resort & Club, noted that the Administration is a couple of months away from making a decision on the parity issue.

Stating that 807 programs, such as Special Access, have produced a trade surplus with the Caribbean for the U.S., Hillman said, "Many [U.S. apparel firms] have done very, very well in terms of establishing operations in the Caribbean, and clearly the Administration wants to ensure the stability and the integrity of those operations."

She added, however, that the Caribbean Basin Initiative nations would have to open their markets to U.S. goods and impose other trade reforms before the White House would endorse legislation granting them further benefits.

Hillman said parity for the Caribbean faces other obstacles: "Some in the labor community would clearly regard both NAFTA and the CBI and 807 parity as the active pushing of [U.S.] jobs overseas." Despite such opposition, she said, "At the end of the day there will be a recognition that the CBI is special. It's been a good relationship and it deserves to be maintained, strengthened and enhanced."She expects Congress to approve the Uruguay Round agreement, with provisions for phasing out the Multi-Fiber Arrangement over 10 years. She said there could be some difficulties, though: "A number of members of Congress who have other concerns connected to trade are likely to add those issues onto the package. The question will then become whether it's so unwieldy that it makes it more difficult to pass."

President Clinton's vision of making the U.S. the world's most competitive trading nation may succeed, but it will mean vast new regulation of business, including harsh penalties, apparel makers were warned on Friday.

"If you liked LBJ's Great Society, get ready for Bill Clinton, who in piecemeal fashion is putting together the nation's first National Economic Policy," said Alan Rolnick, a partner in Constangy, Brooks & Smith, an Atlanta law firm.

Addressing the AAMA, Rolnick said Clinton's plan is just the first of numerous initiatives that will greatly expand government regulation of business and substantially increase its costs and liabilities.

Rolnick contended these proposals are part of Clinton's larger plan to make the U.S. more productive by improving its citizens' health care and education, while fostering worker-management partnerships.

He asserted that two prime examples of how this agenda will be framed in legislation are the Work Force Security Act of 1994, not yet introduced, and House and Senate bills (HR 1280 and S 575) to reform the Occupational Safety and Health Administration.

Rolnick said the work force proposal would create joint labor-management councils, ostensibly to improve companies' productivity. However, he said, in response to organized labor demands, the White House so far has agreed that unions can be certified by counting cards signed by employees indicating they favor a vote on union representation, not ballots cast in secret elections, as is now the case.In addition, he said, the upcoming Clinton proposal would step up federal enforcement of workplace wage and hour laws.

Neil Wasser, another Constangy attorney, warned that the OSHA reform act would give unions much more clout and impose new regulations and penalties that could send company management to jail for workplace safety violations.

For example, Wasser noted, current law provides that a firm's top executive could be sentenced to up to six months in prison for a willful violation of an OSHA law with the result that a worker dies or is seriously injured. The new bills provide for a five-year jail term for a long list of company executives and managers. Fines would be increased many fold, too.

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