KANTOR SAYS NO CHANGES TO GATT SCHEDULES

Byline: Joyce Barrett

WASHINGTON — Less than 24 hours after a day-long debate on the subject, U.S. Trade Representative Mickey Kantor said Tuesday there would not be major changes made to the administration’s proposed schedules for the phaseout of quotas on textiles and apparel under the GATT Uruguay Round.
“There may be some technical changes, but no changes of any consequence,” Kantor said.
His remark, made after a press conference endorsing the appointment of Italian Renato Ruggiero as director general of the World Trade Organization, angered representatives here for retailers and importers, who have sought faster elimination of apparel quota during the 10-year phaseout period.
On Monday, the Committee on the Implementation of Textile Agreements heard from domestic manufacturers, retailers, importers and members of Congress on its integration schedules.
Importers and retailers sought an earlier phaseout on quotas on such apparel as yarn-dyed shirts, T-shirts and children’s wear. Advocates of U.S. textile and apparel manufacturers and organized labor, on the other hand, made the case that quotas should be kept in place as long as possible to allow U.S. producers to prepare for competition with low-wage foreign manufacturers.
Robert Hall, vice president, government affairs counsel for the National Retail Federation, said he was “alarmed to learn Mr. Kantor is making that kind of pledge less than 24 hours after the close of the hearings. To hear him say now that there will be no real changes makes a sham of the hearing created by Congress.”
The retail industry has advocated that CITA’s decision-making be more open to public review, and succeeded in inserting in the GATT implementing bill approved last year a provision requiring CITA to hold public hearings, such as that held on Monday.
Robin Lanier, international trade vice president for the International Mass Retail Association, said she was “totally outraged” by Kantor’s statement.
Lanier and Hall are recruiting signatures on letters from members of the House and Senate advocating the quicker phaseout of textile and apparel quotas and expect to deliver it to CITA chairman Rita Hayes later this week. While not disclosing how many signatures had so far been secured, Lanier said that most of the trade leaders on Capitol Hill have signed on.
Contacted for comment, Hayes did not respond directly to Kantor’s remark, but issued a statement that her committee planned to “review and finalize the list of the second, third and final phases of integration” by May 1.
With 30 testimonies presented to the committee on Monday, Hayes said, “It is the committee’s desire to have as transparent a process as possible and to assist various interests while meeting Congressional guidelines.”
Only last week, as reported, a group of top retail executives met with Commerce Secretary Ron Brown and expressed optimism that changes would be made in the integration schedules to allow more items to come under quota-free trade sooner. Under the proposed schedules, only 11 percent of the imports currently under quota would become quota-free before 2005, the year in which all textile and apparel trade is to become quota-free. The integration schedules will become official on May 1.
Despite her unhappiness with Kantor’s remark, Julia Hughes, chairman of the U.S. Association of Importers of Textile and Apparel, said she would be surprised “if only technical changes were made” to the integration schedules.
“There was a full and in-depth hearing, and CITA said it would take everything under advisement. They have more information now than they did before, and we expect changes for the domestic industry and for our side. I have a sense that CITA is taking a serious look at this,” Hughes said.
Like Hayes, Chief Textile Negotiator Jennifer Hillman declined to comment on Kantor’s statement Tuesday. She also said, however, the USTR would take into consideration all of the statements made at Monday’s hearing and planned to issue a decision before May 1.
“I will not make a comment on the schedule,” she said.
Larry Martin, president of the American Apparel Manufacturers Association, said that overall, his industry approves of the phaseout schedule. The AAMA had requested that CITA delay phaseout on infants’ wear in exchange for a quicker phaseout on yarn-dyed shirts. “We’ll wait and see what they do about our proposal,” Martin said.
The integration of apparel and textiles into the new liberalized trade regimen is taking place in three stages. As mandated by the Uruguay Round, 51 percent of all U.S. textile and apparel imports must be quota-free by Jan. 1, 2002, and the remaining 49 percent is to be quota-free on Jan. 1, 2005. However, many items can be imported into the U.S. quota-free, and the U.S. has endeavored to minimize what it perceives as import-sensitive products on the integration schedules.
Thus, under the first phase of integration, which went into effect this year, no items that have been under quota are included. In stage two, which begins in 1998, CITA proposes phasing out 4 percent of the goods currently under quota, and under stage three, starting in 2002, another 7 percent. The remaining 89 percent would drop quota effective Jan. 1, 2005.
House Textile Caucus Chairman John Spratt (D., S.C.) said he was not surprised by Kantor’s remarks because the administration agreed early during the GATT Uruguay Round negotiations to phase in sensitive textile and apparel items later on.
“This is not a political concession,” Spratt said. “The administration is keeping a commitment. This has been our understanding from the beginning. This is not a last-ditch effort to recoup the Multi-Fiber Arrangement [under which the systems for textile and apparel bilateral agreements and quotas were established]. In five years, the MFA won’t matter much anyway, and if we add integration on top of that, it would be meaningless.”
Retailers and importers have argued that the 89 percent “cliff” will not only delay quota reduction, but will also provide ammunition for the domestic industry to ask for a delay in quota elimination beyond that date on the grounds that such a large and sudden integration would harm them. — Fairchild News Service

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