ATMI OFFERS CBI PARITY POINTERS
MIAMI BEACH — While the exact details of the rules for Caribbean Basin Initiative parity aren’t yet known — since the government still hasn’t issued them — there is at least one thing that is clear: Duties are going be lifted on garments made in the Caribbean of U.S. fabrics.
At press time, it was learned that the U.S. Customs Service’s interim regulations were due to be printed as early as Thursday.
Given that piece of knowledge, American Textile Manufacturers Institute officials sketched out in a seminar at the recent Material World trade show a basic strategy for apparel makers to use in taking advantage of CBI parity, when it becomes reality.
While the law granting trade parity went into effect Sunday, the U.S. government hasn’t issued the set of interim regulations that will initially dictate how goods made in the region of U.S. fabric will be allowed to enter the U.S. duty- and quota-free, according to Carlos Moore, ATMI executive vice president. The final rules won’t be issued until spring.
Among the most important issues remaining up in the air until the guidelines are issued is how the knit-fabrics exemption — which initially allows for 250 million square meters equivalent of fabrics knitted in the region to qualify for parity — will be divvied up among the 24 CBI nations. Another big question is whether unfinished gray fabrics that are finished in the Caribbean will qualify for parity.
Nonetheless, contended Charlie Bremmer, ATMI director of international trade, U.S. mills and apparel-sourcing companies can use a few rules to figure out what categories of garments stand to gain the most from parity.
“The most promising categories are those that have a large volume of imports coming out of the Far East and high tariffs,” he said.
Garments that have high tariffs will see the most significant price cuts under CBI, he explained, adding that those currently coming mainly out of Asia will be most ripe for competition.
He listed several types of women’s garments as most promising. Among them:
Cotton blouses carry a 15.8 percent duty. Asian producers currently produce almost 12 times as many of these for the U.S. market as do Caribbean makers.
Asia currently ships more than three times as many synthetic-fiber dresses to the U.S. as does the CBI region. This category carries a 16.4 percent duty.
Synthetic-fiber panties carry a 16 percent duty, though the Caribbean currently ships almost twice as many of these to the U.S. as does Asia.
Almost six times as much man-made fiber nightwear is shipped to the U.S. from Asia as compared with the Caribbean. This category also carries a 16.4 percent duty.
About four times as many cotton nightwear shipments come out of Asia as compared with the CBI region. This category carries an 8.7 percent duty.
Far Eastern producers ship 1 1/2 times as many pairs of cotton piece-dyed pants to the U.S. as do their Caribbean counterparts; this category carries a 17 percent duty.
A greater amount of cotton shorts, which also carry a 17 percent duty, are also produced in Asia — almost twice as many as are produced in the CBI region for the U.S.
Man-made fiber waterproof anoraks have a 7.3 percent duty; Asia ships 17 times as many of these to the U.S. as does the CBI region.
Similarly, cotton panties carry a 7.8 duty, but the Caribbean ships almost three times as many of these to the U.S. as does the Far East.
Bremmer also noted that CBI production of sweatshirts and polo shirts, which bear respective average duties of 27.5 percent and 25 percent, could benefit substantially from the new trade environment.
Moore added that the parity law contains extensive guidelines for dealing with the problem of garments being illegally transshipped through the area from countries that are not eligible for parity.
Observers generally contend that transshipment is a greater concern from the sub-Saharan African nations, which are also eligible for trade parity consideration under the Trade and Development Act of 2000. But, the same enforcement rules will apply to both regions.
Moore said the enforcement provisions include “jump teams” of U.S. Customs officials authorized to make unannounced inspections and require garment importers to maintain detailed certificates of origin.
In addition, there are a number of transshipment-focused provisions. Among them are that companies found to be illegally transshipping goods through the Caribbean Basin can have their parity benefits stripped from them for two years. Nations found to be permissive on transshipment can be penalized as well.