AFRICA-CBI BILL BEING WRITTEN AS VOTE IN HOUSE GETS CLOSER

Byline: Joanna Ramey

WASHINGTON — The Africa-Caribbean Basin bill is barreling toward a House vote as early as today, as the text of the bill, dropping duties on certain apparel imports from the areas, was still being written Wednesday with much of its contents being kept under wraps.
However, certain key details affecting apparel and textile trade have emerged. According to sources, the measure, which would largely require U.S. textiles to be used in order for garments to receive duty breaks, would make the following exceptions:
Brassieres made in the Caribbean Basin’s 25 island and Central American nations could contain up to 75 percent non-U.S. textiles, calculated on a per company and annual basis. This exception was pushed by bra makers like VF Corp. and Warnaco Inc.
Apparel produced in the Caribbean Basin could contain no more than 7 percent non-U.S. fabric. However, if spandex is used in production it has to be U.S. made, an exception furthered by Dupont.
Apparel made of knit fabric produced in the Caribbean Basin — an initial 292 million-square-meter equivalents would be allowed — could increase by 16 percent annually.
Sweaters made of merino wool and cashmere in sub-Saharan Africa’s 48 countries could be produced from fabric other than U.S. or African and still enter the U.S. duty-free. Qualifying fabric would have to meet strict weight definitions. Retailers and importers advocated this provision.
Velveteen, silk, linen and corduroy apparel produced in sub-Saharan Africa of non-U.S. and Africa fabric could also enter the U.S. duty-free under a “short supply provision.” These fabrics are either not produced or available in small amounts in the U.S. The exception was supported by retailers and importers.
Sub-Saharan countries with per-capita income of $1,500 or less could use textiles from countries other than the U.S. or Africa in apparel receiving duty breaks. The amounts permitted would be limited.
House trade leaders insisted on this provision in order to stimulate apparel production in the poorest countries. Thus, the relatively more developed countries of Mauritius, Botswana and South Africa, with established apparel production, would have to use U.S. or sub-Saharan African textiles. The countries of Gabon and Namibia also wouldn’t qualify for the exception.
Left untouched in the bill is an earlier agreement that would allow sub-Saharan African countries to use their own textiles in apparel receiving duty-free treatment in amounts up to 1.5 percent of total U.S. imports. That number would increase to 3.5 percent during the eight-year life of the bill.
Unrelated to Africa and the Caribbean is the inclusion of a wool tariff exemption for U.S. imports of fine woolen fabric. The U.S. tailored clothing industry lobbied for this provision, arguing the fabric isn’t available in the U.S. in large quantities. Duty-free quantities would be limited to 4 million square meter equivalents annually. A rebate of 1999 tariffs amounting to around $30 million is also provided. Also contained in the bill is an as-yet-detailed import surge protection, something fiercely lobbied for by the domestic textile industry. Left out of the final draft, according to sources, is an exception for Israel to use its yarn in Caribbean Basin apparel receiving duty-free breaks.
Congressional leaders are rushing the Africa-Caribbean Basin bill in order to have it voted on before lawmakers take up the controversial issue of China being granted permanent normal trade relations status (see related story, this page).
Larry Martin, president of the American Apparel Manufacturers Association, forecast the bill’s passage in the House, since it strikes a balance between U.S. textile, importer and apparel maker interests, while promoting economic development in poor countries.
Jock Nash, Washington counsel for Milliken & Co., which has broken from much of the U.S. textile industry in opposing the measure, called the package “totally irrational trade policy” that will harm U.S. worker.