SOCK BILL SPARKS DEBATE

Byline: Joanna Ramey

WASHINGTON — Sometimes, seemingly simple legislation, like a House bill introduced last week dealing with socks imported from the Caribbean Basin, can spark controversy.
The measure, introduced by Rep. Sue Myrick (R., N.C.), would make sock-specific changes to last year’s legislation granting duty-free breaks to apparel imports from the Caribbean Basin.
The changes would:
Extend duty-free status to socks that have their toes sewn closed in the region, but are made from fabric knitted to shape in the U.S.
Grant duty-free status to socks entirely made in the Caribbean Basin, as long as U.S. yarn is used.
Myrick’s textile state is home to sock producers and yarn manufacturers, as well as sock importers. She said her bill corrects mistakes made in the original trade measure.
“We have to make our trade agreements work for us,” Myrick said.
It’s the provision in Myrick’s bill — which extends duty-free status to Caribbean Basin-knit socks — that’s already drawing fire from within the U.S. textile industry. Opponents want to limit any apparel imports made of non-U.S. fabric, even if it contains U.S. yarn.
“You would be putting at risk the sock manufacturers in the U.S.,” said Doug Bulcao, director of government relations at the American Textile Manufacturers Institute.
The sock bill revisits the years-long battle between domestic textile producers and apparel importers that culminated in last year’s passage of the Caribbean Basin trade bill. Despite fierce U.S. textile industry objections, the measure ended up granting limited exceptions to the U.S.-fabric-only rule for apparel receiving duty breaks.
But the bill was very specific: Socks aren’t one of the exceptions.
Sid Smith, president and chief executive officer of The Hosiery Association in Charlotte, N.C., said last year’s measure should have treated domestic sock producers and Caribbean Basin importers the same. Both groups belong to the association, which lobbied Myrick to introduce her bill.
Smith dismissed ATMI’s concerns about domestic sock producers being put at a competitive disadvantage. “We want to make sure the industry has all its options open when we go into 2005,” he said, referring to the year when global quotas on apparel will be eliminated. Smith said domestic sock manufacturers account for about 80 percent of the $4.9 billion in U.S. sock retail sales, according to 1999 figures.
Sponsors and supporters of the original Caribbean Basin Initiative said the legislation was needed in order to give U.S. textile sales a competitive edge in the region before 2005.
The provision in Myrick’s bill that would grant duty-free status to socks made of U.S. fabric that have their toes sewn shut in the Caribbean Basin appears to face no opposition. In fact, this provision is designed as an insurance policy for domestic sock producers.
The U.S. Customs Service is currently drafting regulations to implement the Caribbean Basin trade bill, and U.S. sock manufacturers are worried the agency will misinterpret how these socks should be treated under the bill.
The ATMI’s Bulcao said the association supports the provision. “We have no problem with that,” he said.

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