WASHINGTON — Rep. Bill Thomas (R., Calif.), chairman of the House Ways and Means Committee, has accused the Bush administration of overstepping its authority in a trade case that pitted U.S. yarn producers against Swift Galey, an Atlanta fabric maker.

Thomas wrote a letter to Commerce Secretary Carlos Gutierrez last week charging that the Committee for Implementation of Textile Agreements is using the provisions of three trade preference programs “in a manner that is not authorized by law, was not intended by Congress, does not follow the published procedures of the Department, and is unpredictable and unfair.”

Thomas’ challenge focuses on CITA’s procedures relating to trade-preference programs in the Caribbean Basin, Andean region and sub-Saharan Africa, and stems from a recent trade request for more flexibility under two of those programs.

Under the stipulations of the trade programs, apparel assembled in the regions can be shipped duty-free to the U.S. if the goods are made of U.S. yarn and fabric. However, the import laws allow companies to use non-U.S. yarn and fabric if CITA determines the materials are not commercially available domestically.

Swift Galey, a denim and khaki twill producer, filed a “commercial availability” petition with CITA last May seeking to use imported “compacted, plied, ring-spun cotton yarns” in the hope of developing business with U.S. retailers and apparel firms making clothes in Central America. CITA approved Galey’s petition in September and the mill began developing fabric programs with Gap, Levi’s and J.C. Penney.

The National Council of Textile Organizations, representing the U.S. yarn mills, filed a request in January to have the decision revoked, arguing the yarn is not in “short supply in the U.S. and they could provide a substituteable yarn to the likes of Gap and Levi Strauss.”

CITA rejected the request this month, saying the yarns cannot be supplied by the domestic industry in sufficient quantity.

Although the short-supply request was turned down, Thomas challenged CITA’s authority even to accept an appeal. An exception to this is contained in the Central American Free Trade Agreement.

“For CITA to reopen an investigation after the 60-day period has elapsed usurps the prerogative of Congress,” Thomas said.

This story first appeared in the March 21, 2006 issue of WWD. Subscribe Today.

Meanwhile, Sens. Chuck Grassley (R., Iowa), chairman of the Senate Finance Committee and Max Baucus (D., Mont.) sent a letter to Gutierrez and U.S. Trade Representative Rob Portman last week requesting that CITA change its internal procedures to reflect the transparency mandated in the Administrative Procedures Act.

CITA has drawn fire from importers who charge it makes secret decisions, with no accountability, that affect billions of dollars worth of apparel imports from around the world.

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