IMPORTERS, RETAILERS CALL FOR FASTER END TO QUOTAS

Byline: Carol Emert

WASHINGTON — Importers and retailers urged government trade officials to quickly phase out quotas on yarn-dyed shirts, T-shirts, children’s wear and other key items in a hearing Monday before the Committee on the Implementation of Textile Agreements.
Domestic apparel and textile representatives and labor union officials, meanwhile, argued that quotas should be kept in place for as long as possible to allow U.S. producers to prepare for competition with cheap foreign manufacturers.
At issue is CITA’s proposed schedule of goods from the Multi-Fiber Arrangement that are to be “integrated” into the Uruguay Round free trade agreement, effectively eliminating the quotas set forth in the MFA.
CITA is phasing out only goods that have not been under quota in the first stage of integration, which began this year, and proposes phasing out 4 percent of the goods currently under quota in stage two, which begins in 1998; another 7 percent in stage three, which starts in 2002, and the remaining 89 percent in the final stage beginning in 2005.
Retailers and importers argue that the 89 percent “cliff” will not only delay quota reduction, but it will also provide ammunition for the domestic industry to ask for a delay in quota elimination beyond that date, arguing that such a large and sudden integration would harm them.
The two sides presented testimony in a nearly full 110-seat auditorium here, before CITA chairman Rita Hayes, the U.S. Trade Representative’s Chief Textile Negotiator Jennifer Hillman and representatives from the Customs Service, Labor Department and State Department. CITA is preparing the final phaseout list, to be published May 1.
In several instances, retailers and importers argued that several categories should be phased out sooner than CITA proposed because the domestic industry does not offer competing merchandise.
For example, Jim Kilgore, customs and trade manager, Levi Strauss & Co., said it is impossible for his company to source all of its yarn-dyed blouses and shirts in the U.S.
“Historically, it has not been unusual for these products to be in short supply,” he said. “When supply cannot keep pace with demand under such managed trade arrangements, costs increase. This benefits foreign producers and foreign governments and penalizes American consumers.”
Kilgore said that having a good assortment of yarn-dyed blouses and shirts actually increases the number of made-in-U.S.A. jeans the company sells. He asked CITA to eliminate quotas in the second phase, in 1998, rather than in 2005, the proposed deadline.
The CITA schedule of goods to be phased out before 2005 “doesn’t include a single item of Levi imports,” said Kilgore, adding that Levi’s sources half of its merchandise abroad and makes the other half in the U.S.
In addition to the yarn-dyed shirts, Kilgore asked for stage two integration of T-shirts, sweatshirts and other cotton and knit shirts.
Julia K. Hughes, chairman of the U.S. Association of Importers of Textiles and Apparel, and vice president of government relations with Associated Merchandising Corp., also highlighted yarn-dyed garments in her testimony.
Hughes asked CITA to put yarn-dyed shirts and blouses, intimate apparel, T-shirts and children’s wear in stage two of the integration, and other yarn-dyed apparel, shorts, sweatshirts, swimwear, man-made fiber sweaters and wool sweaters in stage three. Currently, all of those goods would be phased in the final, 2005 stage.
Like others arguing for freer trade, Kilgore said CITA’s proposal to maintain most quotas until the end of the phase-out process “is not what the Uruguay Round is all about.”
Robin Lanier, vice president for trade and the environment of the International Mass Retail Association, stressed in her testimony that only import-sensitive goods are supposed to wait for integration until the final round.
But Herman Starobin, director of research for the ILGWU, argued that with the loss of apparel industry jobs and the surge in imports over the last 10 years, all apparel products should be considered import sensitive.
Starobin said the number of “sweatshops” that violate U.S. labor laws are increasing as domestic manufacturers attempt to compete with China, Pakistan and other low-wage countries. The Multi-Fiber Arrangement, he noted, “was designed to be an import control program, not an import giveaway program.”
Charles Bremmer, director of international trade with the American Textile Manufacturers Institute, went so far as to say that moving up the quota phaseouts from the current plan would be “to defy the will of Congress and to break the law,” since the law states that sensitive goods must be integrated last.
Infants’ and children’s wear, the main apparel categories sold at mass retailers, were the focus of much of the discussion Monday. Fruit of the Loom, ATMI and the American Apparel Manufacturers Association have asked CITA to integrate infant and children’s wear in 2005, rather than in 1998, as CITA proposed.
Lanier, however, argued that foreign-made infants’ and children’s wear does not compete with most U.S. makersbecause goods from abroad are generally sold at lower price points by mass retailers, while higher-end U.S.-made goods have a different, wealthier consumer niche.
Stan Raggio, senior vice president of sourcing and logistics with The Gap, voiced support for stage two integration of baby wear. He showed the committee a baby denim jacket which he said would retail for $45 if made in the U.S., but can sell at $28, and at a higher margin, when sourced from abroad, where the necessary hand work can be done much more cheaply, he said.

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