FLARE-UP IN HELMS’S DYEING FRACAS
Byline: Joanna Ramey
WASHINGTON — With the Bush administration nudging delicate talks along, House Ways and Means Chairman Bill Thomas and Sen. Jesse Helms are squaring off to try and settle a months-long dispute over whether fabric dyed and finished in the Caribbean Basin can qualify for duty- and quota-free status under the terms of last year’s trade law.
The stalemate started as a mere irritation for the White House, but has grown into something of critical importance. Seven months into the new administration, President Bush still doesn’t have four key Treasury officials in place because Helms is blocking their Senate confirmations over the dyeing and finishing issue. At stake, Helms argues, are 120,000 U.S. jobs in the industry, 40,000 in his home state.
Industry officials also contend that the very viability of the Caribbean Basin Trade Partnership Act is put into question by the standoff. The law, which went into effect in October, was partly intended to boost the U.S. textile industry by increasing demand for U.S. fabrics in the Caribbean. Many company officials have said that they haven’t yet seen much new business result from the law and some contend that the uncertainty over how trade breaks will be applied is to blame.
“It’s the damnedest thing,” said Ron Sorini, a lobbyist representing apparel importer clients, about the sticky stalemate.
Helms, a longtime supporter of the domestic textile industry, argues that the trade bill requires U.S.-made fabrics to be dyed, printed or finished in the U.S. if the garments they are made into in the Caribbean are to qualify for trade benefits. He’s opposing proposed Customs Service guidelines which would allow qualifying fabrics to be dyed and finished in the Caribbean.
He has not been persuaded by the advances of Treasury secretary Paul O’Neill, or by the offers of other White House deputies dispatched by Bush to try to negotiate a compromise.
According to sources, free-trader Thomas (R., Calif.) has now told Helms (R., N.C.) that he’ll relent on the dyeing and finishing issue if the senator agrees to a menu of trade-liberalizing items affecting the Caribbean and sub-Saharan Africa, which was also covered by the Trade and Development Act of 2000.
Helms has so far spurned all of Thomas’s offers, sources said.
Nonetheless, some observers held out hope that a solution to the impasse will be reached.
“Helms isn’t budging and certainly Thomas isn’t either, but I do think there can be a deal,” said Julie Hughes, vice president of international trade, U.S. Association of Importers of Textiles and Apparel, who’s siding with Thomas. “But someone has to move and the question is who’s going to move first.”
The administration could end the controversy by ordering Customs to nix the proposed regulations in question.
But Bush trade officials, much like Thomas — who as the House’s top lawmaker would have to approve any compromise on the law — don’t want to seek such a change, which would mean abandoning the President’s free-trade principles, unless their cause of lowering trade barriers was given a boost in another area.
While Helms has said he’s ready to deal, he’s only willing to go so far, sources said. He’s cast aside ideas like lifting tight quota restrictions on duty-free African apparel made on the continent from local fabric. According to observers, Helms does seem to be more favorable to ideas like settling questions about how duty breaks in Africa and the Caribbean are applied to knit-to-shape garments, like sweaters.
The standoff has become a classic Washington test of wills. Passions are high on both sides.
“It was never the intent of Congress to allow dyeing, finishing and printing opportunities abroad in the manufacture of U.S. fabric,” Helms wrote President Bush last month, explaining to his fellow conservative his recalcitrance on the issue.
“Mr. President, I make no apology for insisting that congressional intent regarding the Trade and Development Act of 2000 be followed, particularly when the livelihoods of so many Americans are at stake,” he added.
Helms and Thomas have declined requests to talk about their dealings, which in many respects mirror last year’s House-Senate divide over the extent of the trade breaks contained in the Africa and Caribbean trade bills and whether the domestic textile industry should be afforded preferential treatment.
Another compromise is in the wings. It’s being offered by the American Apparel and Footwear Association the American Textile Manufacturers Institute and a host of yarn spinners, knitters and cotton growers.
The proposal would fulfill Helms’s requirement to keep dyeing and finishing in the U.S., and raise the cap on the amount of apparel which can be knitted in the Caribbean region and still qualify for trade preferences. It would also extend the knitting benefit to include socks.
With an eye to avoiding any further snags on the implementation of the law, the proposal also seeks to clarify other provisions of the law which allow fabrics to be cut in the U.S. or in the Caribbean and make technical changes in how duties are levied on bras.
Helms and Thomas received the proposal late last week, after Helms turned back the Congressman’s initial offers.
Not all segments of the apparel-textile industry are supporting the compromise.
Jock Nash, Washington counsel for the giant textile concern Milliken & Co., called the proposal “an importer deal” created by factions “making their Christmas lists.” Nash said that “Sen. Helms is negotiating in the best interests of our industry.”
Erik Autor, vice president and international trade counsel at the National Retail Federation, said his group doesn’t want to sign onto the compromise for opposite reasons. “If [Helms] gets his way it will mean less business in the Caribbean and I fail to see how that makes American textile mills more competitive,” Autor said, he’s also worried about a precedent being set on how country of origin status for textiles is defined.