US BOWS TO WTO, LIFTS QUOTAS ON HONDURAN WOMEN’S COATS

Byline: Jim Ostroff

WASHINGTON — In line with a recommendation from the World Trade Organization’s Textiles Monitoring Body, the U.S.’s Committee for the Implementation of Textile Agreements has decided to eliminate import quotas for women’s wool coats made in Honduras.
The quotas will be dropped effective Tuesday.
The development does not affect tariffs. Importers will continue to be able to get import duty breaks, paying duties only on the value added during assembly of coats in Honduras if the fabric is cut in the U.S.
For the year ended in July, the U.S. imported 32,034 dozen of these women’s coats from Honduras, up 21 percent from the same period a year ago.
Honduras was ranked as the U.S.’s 16th leading supplier of these coats for the year ended July, with a 1.8 percent share of the domestic market, according to the Commerce Department.
The U.S. first levied quotas on women’s wool coats from Honduras in 1995. Claiming that these imports, as well as those from India, were harming domestic production, the U.S. issued consultation calls to both countries to establish limits.
Honduras and the U.S., later that year, agreed to a quota of about 14,700 dozen and a Guaranteed Access Level of 35,000 dozen for coats assembled there using U.S.-cut-and-formed fabrics.
But India appealed to the TMB, arguing the U.S. failed to prove that the Indian wool coat imports were causing or threatened to cause economic harm to domestic producers.
The TMB last fall sided with India and the U.S. dropped its unilaterally-imposed quota on the Indian coats. Honduras subsequently asked the TMB to rule that the U.S. should drop its quota on women’s wool coats from that country, as well. The TMB in June made this recommendation.
Michael Hutchinson, director of the Commerce Department’s Office of Textiles and Apparel, said Wednesday that the U.S. “wanted to see 1996 domestic production data that came out this July” before acting on the TMB recommendation.
“The data showed U.S. production of these women’s coats was up substantially, and we felt there was some economic basis [to drop the quota],” he said. Hutchinson further pointed out that the quotas on Honduras would have lapsed at the end of March 1998.

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