U.S., RUSSIA REACH AGREEMENT ON COATS

Byline: Jim Ostroff

WASHINGTON — The U.S. and Russia have concluded an agreement that, while not setting immediate quota, could limit imports of Russian-made women’s wool coats.
U.S. trade officials were quick to note that the accord, reached in Geneva early this month after two days of talks, is not a quota as much as a trigger level at which import levels could be increased or restrictions could be imposed.
Rita Hayes, the chief U.S. textile negotiator who led the American team in the talks, said both sides agreed that should U.S. imports of these category 435 wool coats from the Russian Federation exceed 47,000 dozen for any 12-month period, the U.S. could call for consultations.
Hayes said that should the two sides fail to reach agreement on limiting these imports within 90 days of the request to talk, the U.S. could unilaterally impose a limit of 47,000 dozen, plus 6 percent, or a total of 49,820 dozen.
Once this limit was in place for a year, it would grow 2 percent annually. Since Russia is not a World trade Organization member, it cannot appeal such U.S. actions, made under a 1956 agriculture law.
Alternately, Russia could request consultations with the U.S. seeking an increase in the number of women’s wool coats it can ship in any 12 months. This mechanism is somewhat akin to that in the 807(A) program, where countries can ask the U.S. to increase special quotas called Guaranteed Access Levels. However, these Guaranteed Access Levels require that the product use U.S.-made and cut fabrics; the pact with Russia does not.
The U.S. on Aug. 31 said it would act to limit imports of these Russian wool coats to 45,896 annually, saying the rapid rise of these imports was causing economic harm to domestic manufacturers. Russia, with 46,908 dozen shipped, was the U.S.’s sixth-leading supplier of category 435 imports for the 12 months ended in August, but it was far behind the Dominican Republic, which was number one, with 283,911 dozen.
Trade sources previously reported the Russians were livid about the coat call and made veiled threats that U.S. imports would have a difficult time entering Russia if the U.S. imposed the restrictions. Hayes last month dismissed such a notion, though, saying an earlier round of talks with the Russians this fall “went very, very well.”
Hayes said in a telephone interview that the U.S. needed to control growth of imports of wool coats from newly emerging suppliers such as Russia. Earlier this year, a quota was set on women’s wool coats imported from Ukraine.
The agreement reached with Russia would appear to be a compromise that avoids Russia’s reported resistance to the idea of quota but still gives the U.S. a control mechanism.
In another development, the U.S. has issued a notice it will seek to restrain women’s wool suit imports from Bulgaria and man-made fiber skirts from Nepal. If talks do not result in quota agreements, the U.S. said, it would unilaterally impose a first-year quota of 59,569 units on women’s wool suits, category 444, from Bulgaria and a quota of 92,081 dozen for the skirts from Nepal. These numbers match the shipments of these products in the 12 months through August. Indicating the growing pace of these imports, Bulgaria a year earlier shipped only 4,300 wool suits to U.S., and Nepal shipped 29,000 dozen man-made fiber skirts.
Referring to these emerging suppliers, Hayes said, “It seems obvious that they’re getting contracts from importers and retailers.”
Reacting to the agreement with Russia, Laura Jones, executive director, U.S. Association of Importers of Textiles and Apparel, said, “Companies always are looking for new sources, but the real question is why the U.S. pushes for such import restraint agreements when these programs are being phased out [under the WTO].” Under the GATT agreement that established the WTO, all apparel and textile quota is to be eliminated by the start of 2005.
Clinton Stack, president of International Development Systems Inc., a Washington trade consulting firm that often advises importers, said the agreement with Russia “presents a unique situation since the U.S. basically is saying it has predetermined a market disruption level of imports for sometime in the future when they don’t have future data in hand.” — Fairchild News Service

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