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House Bill: Duty Free Imports for Poor Nations

A bipartisan group of House lawmakers introduced legislation Thursday that would give duty free treatment to imports from the world's poorest countries, a move opposed by the U.S. textile industry.

WASHINGTON — A bipartisan group of House lawmakers introduced legislation Thursday that would give duty free treatment to imports from the world’s poorest countries, a move opposed by the U.S. textile industry.

The bill got immediate support from Levi Strauss & Co. and the American Apparel & Footwear Association because it would broaden duty free benefits for apparel, textiles and footwear imports from more countries and make the benefits permanent.

However, textile trade groups said the domestic industry might lose millions of dollars. That’s because some preference programs and trade agreements require companies to use U.S. or regional fabrics and yarns to receive duty free benefits. If U.S. apparel companies move production to countries such as Bangladesh or Cambodia, which are included in the new bill, companies could use fabrics and yarns from anywhere in the world. Neither Bangladesh nor Cambodia has duty free status now.

Bangladesh shipped $3.2 billion worth of apparel and textiles to the U.S. in the last 12 months, and Cambodia shipped $2.4 billion.

The measure contains two main components: It would eliminate tariffs on products imported into the U.S. from 50 countries designated by the United Nations as “least developed” and authorizes $5 billion for investment in trade and infrastructure development in those countries. The bill faces a crowded Congressional schedule in the remaining two-and-a-half months of the session and consideration this year is unlikely.

“Our intent in this legislation is to fight extreme poverty,” Rep. Jim McDermott (D., Wash.), leader of the bipartisan group, said in a statement.

Many of the least developed countries already receive duty free treatment from existing U.S. trade preference programs. Because the new bill would extend this benefit to Bangladesh and Cambodia, African countries and labor and humanitarian groups initially objected to the bill.

A spokesman for McDermott said there is a cap on the amount of duty free products Bangladesh and Cambodia could send to the U.S., limiting them to 2007 levels. The volumes from those countries would be allowed to rise by 15 percent a year under certain criteria.

Helga Ying, director of worldwide government affairs and public policy for Levi Strauss, said in a letter to McDermott that the countries covered by the bill account for about 10 percent of Levi’s global business.

Cass Johnson, president of the National Council of Textile Organizations, said the U.S. textile industry could lose a big portion of nearly $12 billion in fabric and yarn exports to Africa, Central America, Mexico and Canada if the bill is enacted.