WASHINGTON — The House Ways and Means Committee approved draft legislation to implement the Central American Free Trade Agreement Wednesday at a hearing where textiles and apparel issues were prominent in the debate.

The House action and a similar move Tuesday by the Senate Finance Committee set the stage for the Bush administration to decide when it will send a final bill to Congress.

The informal hearings allow lawmakers to make recommendations to modify provisions in the accord and send signals to the administration on where they stand. The suggestions are not legally binding because Congress cannot make amendments to a trade bill.

The committee rejected three amendments or recommendations, including one seeking to double the funding for the Trade Adjustment Assistance program, which gives aid to workers who lose their jobs because of imports, and another seeking to strengthen the labor enforcement provisions in CAFTA. A similar proposal was voted down in the Senate committee.

Opposition to CAFTA is strong, particularly among lawmakers representing the textile and sugar industries and blocs of Democrats who oppose the trade bill’s labor provisions. Retailers and importers who favor CAFTA maintain it will give them a Western Hemisphere alternative to sourcing in Asia. Other proponents believe it will boost export opportunities for U.S. textile and agricultural products to Honduras, Guatemala, Costa Rica, El Salvador, Nicaragua and the Dominican Republic.

An issue raised by Rep. Jim McDermott (D., Wash.) at the hearing revealed further complications related to a Bush administration commitment that secured the support of Sen. Elizabeth Dole (R., N.C.) and the National Council of Textile Organizations, a key industry association.

U.S. Trade Representative Rob Portman sent a letter to Dole in May, assuring her he would seek to change a provision of the agreement to require that pocketing fabrics come from the U.S. or the six signatory countries. But McDermott questioned whether the administration’s proposed change required congressional approval.

Angela Ellard, majority staff director for the ways and means trade subcommittee, told McDermott that Congress would have to approve any changes to the rule of origin, including the proposed pocketing change.

“Ultimately, Congress retains authority over the rule of origin,” Ellard said.

This story first appeared in the June 16, 2005 issue of WWD. Subscribe Today.

Dole recently said she would vote for CAFTA based on the commitment made by Portman. It is unclear whether the latest revelation will have a negative impact on how textile-state lawmakers vote on the accord, but many are closely weighing the administration’s commitments to the textile industry.

Any amendments have to be approved by the countries involved in the deal and the Latin American leaders have not committed to the proposed change. A call to the USTR office seeking clarification on whether the change would need congressional approval was not returned.

On another textile and apparel issue, Rep. Bill Thomas (R., Calif.), chairman of the House Ways and Means Committee, received assurances from USTR Wednesday that the agency would closely monitor a pledge made by Nicaragua to preserve current U.S. orders and not replace them with an allowance they obtained in CAFTA that permits limited use of foreign fabric and yarns.

“If the direction [Nicaragua] moves in is the wrong direction, we’ll be notified?” he asked deputy USTR Peter Allgeier. “We want an early warning system in place and not an after-the-fact pronouncement.”

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