WASHINGTON — The Bangladesh government is mulling over a U.S. offer that would allow the entry of 175,000 dozen pairs of cotton trousers that were embargoed at the end of July, but with a penalty reducing next year’s quota by three times the amount, according to industry sources.
This story first appeared in the September 26, 2002 issue of WWD. Subscribe Today.
David Spooner, special textile negotiator at the Office of the U.S. Trade Representative, sent the proposal on behalf of the Committee for the Implementation of Textile Agreements to the Bangladeshi Embassy Wednesday, and gave officials there a deadline of Friday to accept or reject the offer, sources said.
Don Foote, director of the agreements division at the Commerce Department’s Office of Textiles and Apparel, confirmed the Bangladeshi Embassy received the proposal, but would not disclose its content.
The offer comes at a time of political sensitivity. The Bush administration is bending over backward to show it is helping the flagging textile industry at the same time several House Republicans from textile-producing states are fighting for reelection in November.
Ten senators from textile-producing states weighed in on the matter Tuesday in a letter to administration officials and urged officials to deny the request from Bangladesh to exceed its 2002 limits on cotton trousers, as reported. They argued that the White House would renege on a promise — if it granted more quota to Bangladesh — to help U.S. textile makers compete internationally by forcing foreign countries to follow trade agreements.
“Bangladesh overships quota every year,” said Charles Bremer, vice president of international trade at the American Textile Manufacturers Institute.
Bremer said it will establish a “bad” precedent because other countries will expect similar special treatment. He pointed to China, which is close to filling several quota categories.
Meanwhile, the clock is ticking down for retailers like Sears, Target and Wal-Mart, which need to get their trousers into stores for fall and holiday selling. Retailers are stuck because Bangladesh miscalculated its quota after orders were taken and shipped. An estimated 150,000 to 200,000 dozen — or up to 2.4 million pairs — were overshipped and currently sit in U.S. ports or are in transit.
The Bangladesh quota for these garments is 3.8 million dozen and the limits were exceeded by about 5 percent.
“I don’t see how the domestic industry would be hurt if it was granted or benefit if it wasn’t granted,” said Erik Autor, vice president and international trade counsel at the National Retail Federation. “In the meantime, [retailers] were left holding the tab.”
Autor said the country could fill its quota as early as April 2003 because of the penalty, assuming it hasn’t driven off the business. “Because of the quota mismanagement, people are thinking twice about doing business there.”