By  on May 23, 1994

WASHINGTON -- Vice President Albert Gore Jr. on Tuesday is slated to announce the Clinton administration will seek free trade benefits for Caribbean apparel manufacturers similar to those held by Mexico, sources said over the weekend.

This parity with the North American Free Trade Agreement, long sought by U.S. apparel makers who use the Caribbean extensively for 807 production, will be part of a bill the White House plans to send to Congress Thursday to implement the GATT Uruguay Round treaty, the sources said.

They further noted this bill will contain a novel approach to get around a congressional mandate that money-losing laws be offset: it will propose a one-year plan to make up tariffs lost due to the GATT and parity -- estimated at upwards of $13 billion or $14 billion in the first five years of GATT alone.

Funding mechanisms for future years would be submitted later.

The administration on Friday, after six months of debate, decided to support giving this parity to Caribbean Basin apparel manufacturers, sources said. They said Gore will announce this decision Tuesday in Honduras when he meets with Central American officials. Gore's office would not comment on any impending announcements, saying only "he will be in Honduras Tuesday to help plan for the Summit of the Americas to be held in Miami Dec. 9 and 10."

A spokeswoman for the U.S. Trade Representative declined to comment.

Meanwhile, the bill's prospects took a hit when Rep. John Spratt (D, S.C.), chairman of the House textile caucus, said he "strongly opposes parity" for the CBI until 1996 or 1997.

In an interview Saturday, he said concerns should be cleared up about enforcement of NAFTA's textile safeguards against transshiping and use of fabrics and yarns that don't meet rules of origin in Mexico "before we extend this benefit to the 22 or so CBI countries, each with their own customs system and special problems of policing trade rules."

Under NAFTA, Mexican apparel firms whose goods are made from North American yarn and fabric, can export clothing to the U.S. duty free and with generous quotas. Quotas were created for the duty-free export of various apparel that don't meet the origin rule, but this shouldn't pose a problem for CBI firms since almost all of their apparel is made from U.S. fabrics to take advantage of the so-called 807 programs.Sources confirmed the administration will propose that to receive parity, CBI nations will have to provide unfettered access to U.S. apparel exports and agree to anti-transshipping safeguards. They also must agree to begin negotiations to protect U.S. investments and intellectual property -- conditions the U.S.imposed on Mexico before signing NAFTA.

Sources said the White House on Thursday will submit the GATT-implementing legislation to the House Ways and Means Committee with the idea that both the House and Senate will vote on the measure before the August recess. The Uruguay Round, completed Dec. 15 after seven years of talks, cuts import duties and phases out the Multi-Fiber Arrangement, along with apparel and textile quotas, over 10 years.

The U.S. textile and apparel industries fought up to the 11th hour in Geneva for a 15-year MFA phaseout, saying they would be devastated by the shorter period. The industries' lobbyists for months have been seeking to shape a GATT bill that would mitigate this purported harm.

CBI parity is a key element, since it would spur the use of more U.S.-made textiles and make it more economical to make apparel in the nearby Caribbean. Informed of the administration's impending GATT bill, Carlos Moore, the American Textile Manufacturers Institute's executive vice president, said he would withhold endorsement until reading it.

However, Moore said "We certainly are interested in CBI parity, provided it's consistent with NAFTA's origin rules and enforcement provisions.

"Our hope is that with parity and NAFTA the region could displace some of the apparel shipments from the Far East," he said. "The CBI is a rapidly growing market for our fabrics and...we believe parity would create jobs in the U.S. because they would largely use our yarns and fabrics."

U.S. apparel makers, in particular, have argued NAFTA gives Mexican firms an unfair advantage since they can ship clothing duty free to the U.S., whereas CBI-made apparel is still burdened with duties, although they are reduced from prevailing levels, when exported to the U.S. as 807 product with fabric cut in the U.S.

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