BANANA VS. CASHMERE: TIFF SENT TO PRESIDENT

Byline: Jim Ostroff

WASHINGTON — The banana-cashmere trade controversy has apparently been passed to President Clinton to decide as a foreign policy issue.
The question for importers and retailers comes down to whether European cashmere apparel will be banned from American stores this fall.
While scores of U.S. retailers and manufacturers have filed comments supporting or denigrating the U.S.’s tentative decision to impose “killer duties” on cashmere apparel, the topic has become such a political hot potato that the buck has been passed to the Oval Office, sources said Tuesday.
The Office of the U.S. Trade Representative has completed its final list of recommended European products that would be subject to at least 100 percent duties in retaliation for European Union’s refusal to alter its banana trade policy and its import ban on beef raised with growth hormones.
Congress set a June 19 deadline for the agency to issue these “hit lists” after enacting a law that requires the U.S. to rotate the products subject to retaliatory duties every six months.
The deadline came and went with no action. Officials with USTR said this was due to the large number of comments filed by those seeking to have products knocked off or kept on the lists, which would target $308.2 million worth of European goods.
The proposed banana retaliation list includes cashmere sweaters, coats, pullovers and vests; cotton bed linens; handbags; plastic-coated accessories; bath preparations and gourmet food items. The proposed beef hit list includes two man-made fiber yarns, gourmet food, electric hair clippers and small motorcycles.
Retail and import interests have argued that hitting cashmere now will put many small- and medium-size retail and importing companies out of business, while dealing a severe financial blow to even the largest American chains.
On the other side, U.S. agriculture and textile interests have countered that the Europeans will never budge if the U.S. targets hair clippers and bath salts, and that only a cashmere apparel ban will get their attention.
Sources said British Prime Minister Tony Blair has twice called Clinton in recent weeks imploring him to make sure cashmere is not targeted. Sources said Blair has argued that a cashmere ban would put virtually all of Britain’s cashmere industry out of business, since their U.S. sales account for nearly all their income. Last year, Blair intervened and cashmere was dropped from the final hit list.
It is not known whether any Italian government officials similarly sought to lobby Clinton or administration officials.
Italy and Britain account for nearly all the high-quality cashmere apparel imported into the United States.

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