By  on September 13, 2005

WASHINGTON — A House subcommittee on trade is poised to make decisions on whether to include several bills in a trade package that could have significant ramifications for the fashion industry.

The subcommittee recently closed a comment period and is reviewing what it will include in the omnibus bill, which often has hundreds of provisions attached to it, including measures to suspend duties on a variety of products. Importers, retailers and textiles executives are pressing the committee on several of the proposed bills, which the full House Ways & Means Committee could mark up this fall.

House lawmakers consider several criteria in determining whether to include legislation in such a miscellaneous package, including "the extent to which the bills create a revenue loss, operate retroactively, attract controversy or are not administrable," according to the subcommittee's rules.

In crafting the current measure, there are two potentially controversial bills House members are reviewing: one to prohibit the Committee for the Implementation of Textile Agreements from claiming a "foreign affairs exemption" from the Administrative Procedures Act, and another to repeal the Byrd Amendment, which allows for the collection of tariffs on foreign goods when they are sold in the U.S. for less than they are in their home country, but was ruled illegal by the World Trade Organization.

The most friction between importers and the textile industry centers around the bill introduced in the House by Rep. Jerry Weller (R., Ill.) seeking to prohibit CITA from claiming the foreign affairs exemption to the rule-making requirements under the APA. Retailers and importers are pressing to attach the bill, which they claim would open up the rule-making process of the committee to more public scrutiny. But the domestic industry, accusing importers of attempting to interfere with the government's process and block China safeguards, is planning to mount opposition to its inclusion.

CITA was created by an executive order in 1972 to supervise the implementation of all textile trade agreements and subsequently the global system of quotas, which expired at the beginning of the year. It is an interagency committee that includes officials from the Commerce, State, Labor and Treasury Departments, as well as the U.S. Trade Representative's office.

Retailers and importers have repeatedly contended that CITA hides behind the exemption that allows it to formulate rules and procedures outside of the Sunshine Act, and ultimately makes secret decisions that affect billions of dollars worth of apparel imports from around the world. Their renewed focus on CITA's role stems from the Bush administration's imposition of safeguard quotas on $1.9 billion worth of Chinese apparel and textile imports. The administration is trying to hash out a broad import restraint agreement with the Chinese.With billions of dollars at stake, the debate over CITA's authority in administering the China safeguards came to a head in a lawsuit filed by the U.S. Association of Importers of Textiles & Apparel last December. Although the importer group won a temporary injunction halting the government from imposing safeguard quotas on several pending petitions for four months, a federal appeals court overturned the lower court and lifted the injunction in late April.

"Claiming coverage under the 'foreign affairs' exemption from the [APA], CITA makes decisions to impose quotas on imports from China and other countries (most notably, Vietnam), out of public view and with no accountability and little opportunity for meaningful public comment," the National Retail Federation said in written comments submitted to the Ways & Means trade subcommittee.

Brenda Jacobs, counsel for USA-ITA, said there are parallels between the court case and the Weller bill, although she said the Weller measure is broader and seeks to prohibit CITA from invoking the exemption in all actions related to textile trade.

"CITA is making all of its decisions behind closed doors under the pretense of the foreign affairs function, but it has taken a narrow exemption and applied it to all of its activities and that is the problem," said Jacobs.

The textile industry, on the other hand, vigorously opposes any move to strip CITA's foreign affairs exemption in the rule-making process, even though many textile officials have not been satisfied with CITA's handling of the process.

"It would be a dramatic undermining of the government's authority to interpret and enforce international agreements," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. "If the courts [or Congress] were to allow the way CITA interprets and enforces trade agreements to be questioned, then you would potentially have a complete breakdown of the system."

Tantillo, who pointed out that CITA did publish China safeguard procedures and has accepted public comments on each petition, contended retailers and importers are attempting to "destroy the safeguard system by creating controversy over whether CITA is transparent or not."

Cass Johnson, president of the National Council of Textile Organizations, said the bill attempts to change the way CITA operates "so that it cannot act quickly on behalf of the industry on things such as the China safeguard, and I think you will see widespread opposition from textile representatives" to the inclusion of such a bill in the miscellaneous trade package.

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