UKRAINE BALKS AT PACT ON WOOL COAT QUOTAS

Byline: Jim Ostroff

WASHINGTON — The skirmish over wool coat imports from Ukraine isn’t over yet.
The Ukrainian government is seeking new talks with the U.S. on an agreement that limits — for the first time — Ukraine’s exports of women’s wool coats, claiming such restrictions will hinder Ukraine’s efforts to convert to a market economy. A Ukrainian government official here described the pact as “harmful to our industry and our economy in general.”
Ukraine has balked at ratifying the pact reached by negotiators last November in Kiev, and its trade officials have asked informally that the quotas set in the pact be increased for 1995, or that certain women’s wool coats be exempt from quotas.
Rita Hayes, the Commerce Department’s deputy assistant secretary for textiles and apparel and chairman of the government’s Committee for the Implementation of Textile Agreements, however, said in an interview that the delay is procedural. The pact will be signed when a translation acceptable to both nations is completed, she said. The agreement creates a U.S. quota on Ukrainian women’s wool coats, category 435, of 25,000 dozen for the last three months of 1994 and 85,000 dozen in 1995. The pact is fair, Hayes continued, and should be signed. Its quotas, she said, “are the highest of all the specific limits the U.S. has on category 435 for any country” and defended CITA’s decision to seek them.
Responding to U.S. critics who say the pact has already caused the layoff of one-third of Ukraine’s wool coat workers, Hayes said: “Way over one-third of the work force at the New England [woolen] mills were laid off… These imports of low-priced garments were disruptive to all coat manufacturers, not only in Maine, but in New York, New Jersey, Pennsylvania, in the Southeast and the West.”
The U.S. could act unilaterally to impose quotas on any Ukrainian products, but unilateral quotas are rare because of potential diplomatic problems.
The brouhaha began last year when the Northern Textile Association (NTA) complained to CITA that a surge in Ukrainian wool coat imports, coming into the U.S. quota-free, threatened domestic manufacturers. By November, when the U.S. negotiating team traveled to Kiev, the latest available data for the year ending in September showed U.S. imports of 88,898 dozen Ukrainian women’s wool coats, including jackets.
The pact has stirred up continuing debate within the U.S. apparel and import communities. Karl Spilhaus — NTA president, who advised the U.S. negotiators in Kiev — said the pact “was fairly negotiated and a deal is a deal.”
“Our mills are down to half-time in some cases because of these imports, compounded by bad market conditions,” he said, citing the warm fall and winter.
“The 85,000 dozen quota on Ukrainian coats translates into 3 million linear yards of fabric, or about the annual production of a typical New England mill,” he added.
Import interests continued to blast the pact. “What the U.S. is doing is beyond me. It’s just another Pavlovian response to imports,” said Clinton Stack, president of International Development Systems, a Washington firm that often consults for retailers, importers and foreign governments negotiating with the U.S. on textile matters.
Stack, who said neither he nor his firm had been retained by Ukraine, pointed out that while the Ukrainian wool coat quota is the highest negotiated limit, it is dwarfed by imports from several Caribbean nations that have no quotas.
For the year that ended in November, the U.S. imported 285,000 dozen coats in category 435 from the Dominican Republic, which was 23.7 percent of the total imported in that period. Guatemala shipped 136,000 dozen in the same year, or 11.3 percent of the total, while Ukraine shipped 103,000 dozen, or 8.6 percent.
Stack said the average per-coat Customs value of the Ukrainian coats was $18.67, compared with $19.17 for a similar coat made in Guatemala and $21 for one imported from the Dominican Republic. These figures exclude freight, insurance and tariffs.
A frequent CITA critic, Laura Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, said the Ukrainian coat quota “again shows that CITA functions in a vacuum and often at odds with U.S. foreign policy. “Our economy can absorb $19 million worth of these coat imports and the U.S. asserts it wants to help the Ukraine convert to a capitalist, market economy. The Ukrainian government says it wants trade, not aid.
“But when it finally is able to ship apparel,” she stated, “the textile program people step in and say, ‘That’s great. Just don’t ship your coats here.”‘
— Fairchild News Service

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