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Safeguard Legal Battle Rolls On

The legal tussle over the government’s right to impose limits on Chinese imports raged on, as USA-ITA filed a brief against dismissing the case.

WASHINGTON — The legal tussle over whether the U.S. government has the authority to impose limits on Chinese textile and apparel imports continued with the filing of a legal brief by the U.S. Association of Importers of Textiles & Apparel.

The association, which filed a lawsuit against the government last month challenging its authority over China threat-based safeguard petitions, filed the brief Wednesday night opposing the government’s motion to dismiss the case.

“The defendant repeatedly misstates USA-ITA’s claims, instead setting up strawmen assertions, and wholly fails to address the actual issues presented in USA-ITA’s complaint,” the brief stated.

The group’s response came amid speculation over whether the government would appeal a two-week-old temporary injunction that stops the government’s interagency Committee for the Implementation of Textile Agreements from reviewing a slew of petitions seeking fresh limits on Chinese imports based on the threat of market disruption. In addition, one of the U.S. textile trade groups that filed the China safeguard petitions released a year-end economic report urging the government to file an appeal of the injunction quickly.

A Justice Department spokesman did not return calls on Wednesday, and government offices were closed Thursday in observance of Inauguration Day. A spokesman repeatedly said over the past two weeks that the Justice Department was reviewing whether to file an appeal.

USA-ITA, which represents large importers such as J.C. Penney Co. Inc. and Liz Claiborne Inc., sued five federal agencies in the U.S. Court of International Trade in Manhattan on Dec. 1, claiming the government violated its own published regulations and the Administrative Procedures Act, exceeding its authority over safeguard petitions. The association is seeking a permanent injunction against CITA reviewing threat-based petitions.

Senior Judge Richard Goldberg issued a preliminary injunction in the case on Jan. 3. The Justice Department argued in its motion to dismiss the case that the court lacks jurisdiction to consider USA-ITA’s complaints because the safeguard petitions under review have not been decided. It also said the USA-ITA does not have the right to challenge CITA’s deliberations and has not exhausted the administrative remedies provided by the government to challenge the safeguard petitions.

USA-ITA lawyers wrote that the government’s exhaustion of remedies argument is “unpersuasive,” because the association has no “tangible administrative means in which to challenge CITA’s interpretation or application of the China safeguard procedures.”

Domestic textile, fiber and apparel producers filed a dozen safeguard petitions targeting some $1.9 billion in Chinese apparel and textile imports in an effort to save U.S. textile and apparel jobs from an expected surge in Chinese imports this year. The producers claim the injunction and delay in the review process will further hurt the beleaguered sector.

The National Council of Textile Organizations asserts in its report that job losses and mill closings in 2004 were tempered by three China safeguards the government imposed on imports of knit fabric, bras and dressing gowns and robes from China. Those safeguard quotas have since expired, and three renewals are among the 12 pending petitions.

The National Textile Association also issued a statement asking the Bush administration to file an appeal, self-initiate safeguards based on market disruption early this year and speed the release of import data, which currently lags a month behind most other government reports, in order to “streamline the collection of import statistics.”

U.S. textile and apparel employment fell by 32,100 to 676,500 in 2004, as some 30 textile mills shut their doors after 50 plants closed in 2003, the report said. Textile corporate sales “improved slightly,” up 5.7 percent to $37 billion last year, but textile profitability remained “marginal” at 1.8 percent of sales, the NCTO reported.