WASHINGTON — Importer and textile groups are pushing for two opposing approaches to tariff reductions in the current round of global trade talks.
Importers are urging the Bush Administration to obtain zero duty rates on apparel and textile imports from the 143 World Trade Organization member nations in exchange for the U.S. reducing its own duties to zero. The domestic textile industry, however, is opposed to that approach. Textile officials are requesting the U.S. demand WTO nations to lower their tariffs to U.S. levels.
On Monday, the two sides put their positions on the record at a public hearing before a panel of officials from the State Department, Department of Labor, Commerce Department, the Office of the U.S. Trade Representative and the International Trade Commission.
“It is [our] strong belief that the United States must be willing to reduce its tariffs on textile and apparel products, which are high even among industrialized nations, much less developing nations,” said Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel.
Hughes said U.S. tariffs on textile and apparel products, which she calls “regressive,” are high even when compared to other developed countries. She said the U.S. has a 28.2 percent duty on synthetic knit trousers for women’s and girls’, for example, while the European Union duty rate is 12 percent and Japan’s is 10.9 percent for the product category.
Stephen Lamar, senior vice president at the American Apparel & Footwear Association, who also supports a reduction and/or elimination of tariffs, said tariff barriers no longer protect domestic industries, since the majority of all apparel sold in the U.S. is produced offshore, but add extra costs to operations and to the prices of products.
“All these barriers, including those maintained by the United States, distort trade and production patterns,” Lamar testified, claiming that U.S. importers of textiles, apparel and footwear collectively paid $9.5 billion in duties in 2001. “This means our industries paid $1 out of every $2 collected by Customs, even though we only account for 8 percent of all imports.”
Tom Torrance, WTO desk officer at the State Department, asked Lamar what percentage of his member companies use U.S. preferential programs, such as the African Growth & Opportunity Act and the NAFTA and what effect a reduction of tariffs would have on these programs, which offer special treatment.
Lamar said many of his members use U.S. preferential programs, but he claimed it is “hard to say” whether tariff reductions will force companies to move out of those areas.
On the opposite side of the debate, Charles Bremer, vice president of international trade at the American Textile Manufacturers Institute, claimed the U.S. has given “generously” in terms of enhanced market access in textiles and apparel, but has not received reciprocal treatment from other nations.
“By maintaining high tariffs and a bewildering array of non-tariff barriers, these countries who consider international trade in textiles and apparel a one-way street have kept the United States and other countries out of their domestic market,” Bremer said.
Bangladesh, Pakistan, India, Egypt, China and Vietnam are among the developing countries that maintain high tariffs on U.S. apparel and textile exports.
Torrance at the State Department asked how the U.S. could “sell” the idea of demanding that developing countries lower their tariffs to U.S. imports in light of the language in the WTO declaration, which states developing countries do not have to offer “full reciprocity” in negotiations.
Bremer said it is his hope that developing countries will lower tariffs and trade more among themselves. He claimed the U.S. industry can provide the fabrics many countries use to export clothes.
“The largest denim producer in India was selling denim for $1 more a yard than our domestic industry,” Bremer said. “But we couldn’t sell into that market because tariffs were so high.”