COMPROMISE OVER TEXTILE ORIGIN REACHED FOR BILL ON SUB-SAHARAN AFRICA-CBI DUTIES

Byline: Joanna Ramey

WASHINGTON — Apparel, textile and retail officials greeted the deal struck late last week on a bill dropping duties on apparel produced in sub-Saharan Africa and the Caribbean Basin with a range of emotions — from mild enthusiasm to deep concern.
What most industry officials can agree on, however, is relief that the bill is again in play, after a months-long stalemate between the House and Senate over textile origin provisions.
The compromise calls for duty breaks for apparel made of U.S. fabric, with some allowances for garments made from textiles from either sub-African and Caribbean textiles.
“We have worked hard for seven years to achieve enactment of this legislation,” said Jim Jacobsen, vice chairman of Chesterfield, Mo.-based Kellwood Co.
Dale Apley, director of government relations at Kmart Corp., said the compromise, if it survives a vote in the House and Senate, will be a small start to realizing Kmart’s goal of developing a stable of importers from among the 48 countries in sub-Saharan Africa.
For the domestic textile industry, news that the compromise calls for larger than expected allowances for non-U.S. textiles brought alarm. The agreement “could likely have a detrimental impact on the U.S. textile industry and its nearly 600,000 employees,” Roger Chastain, president of the American Textile Manufacturers Institute, said in a statement.
Lawmakers had placed last week as a deadline for reaching a deal before Congress adjourned Friday for a one-week Easter recess. Leadership wants to dispatch the Africa-Caribbean Basin Initiative bill before Congress votes on the controversial issue of granting China permanent normal trade relations status the week of May 22.
Although there are many issues still outstanding, a Thursday night summit in Senate Majority Leader Trent Lott’s office realized an agreement on the measure’s greatest impediment: how apparel should be treated if its made from U.S. fabric.
Those meeting with Lott were, from the House, Speaker Dennis Hastert, House Ways and Means Chairman Bill Archer (R., Texas) and ranking member Rep. Charles Rangel (D., NY) and Trade Subcommittee Chairman Phil Crane (R., Ill.).
The House and Senate were at loggerheads over textile origin — the House pushed for a broad country-of-origin fabric provision and the Senate favored U.S. fabric only.
What emerged from the closed-door talks included stipulations that apparel produced in Caribbean and Central American countries of U.S.-made fabric would enter the U.S. duty free. Regional fabric, made of U.S. yarn, could be used in producing 250 million square meter equivalents of knit apparel, including underwear categories 352 and 652.
An additional regional-fabric allowance of around 42 million SMEs would be given to knitted shirts, like polo-type designs, in categories 338, 339, 638 and 639. Either allowance is negligible in contrast to current imports from the region, which last year amounted to 3.416 billion SMEs.
For sub-Saharan Africa, the U.S.-textile-only rule would govern, with some exceptions. Countries could ship apparel amounting to 1.5 percent of total U.S. imports if regional fabric is used. That number would increase to 3.5 percent during the eight-year life of the bill. To stimulate apparel production by the poorest countries, fabric from outside the continent could be used for four years.
Some kind of import surge protections for individual countries and product categories would also be imposed. Last year, the U.S. imported about 128 million SMEs from sub-Saharan Africa, less than 1 percent of the total U.S. imports.
For sub-Saharan Africa, lawmakers in the House had pressed for broader fabric-origin provisions in order to breathe life in the beleaguered economies of most of the region.
Ann Hoffman, legislative director of the apparel union UNITE, which criticizes the trade bill as a U.S. job-killer, said the measure will face a particular challenge in the House, which in 1997 rejected a stand-alone Caribbean Basin bill.

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