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Washington Outlook Archive

Effort To Expand Apparel Exports Blocked

James A. Morrissey, Washington Correspondent

US textile manufacturers and their supporters in Congress have blocked, at least for the time being, an effort to expand duty-free treatment for apparel imports from Pakistan and Afghanistan. The effort revolves around legislation creating Reconstruction Opportunity Zones (ROZs) designed to strengthen the economies of two key US partners in the war on terrorism. Senate sponsors of the legislation say it will give the people in Pakistan and Afghanistan "new hope and opportunities."

The legislation, which has passed the House of Representatives as part of the Foreign Affairs Authorization, would permit non-sensitive exports of textiles, apparel, agricultural products and hand-crafted goods from these areas to enter the United States duty-free. In order for an area to be designated a ROZ, President Barack Obama must determine that Pakistan and Afghanistan are meeting a number of criteria, including establishing or making progress toward establishing market-based economies, eliminating barriers to US trade and investment, protecting intellectual property rights, meeting internationally recognized worker rights standards, and taking steps to reduce poverty.

When the legislation was being considered by the House, an effort was made, at the behest of US importers, to include the so-called "sensitive product categories" that had been excluded from quota-free treatment under the now-expired US-China bilateral agreement.

Importers of textiles and apparel have pressed to have the duty-exempt categories expanded to include all textile and apparel products, but particularly cotton trousers and shorts and cotton knit tops. These products, importers say, would most likely create job opportunities in the areas covered by the legislation.In a statement made when the legislation was pending in the House, a coalition of textile importers said these products currently account for 64 percent of the apparel exports from Pakistan and more than a quarter of all exports from Pakistan to the United States. "Configuring the ROZ program to include these items will give Pakistan a fighting chance in this competitive industry," the coalition said, "Moreover, US producers are not at risk from apparel exports from Pakistan, it is the other Asian producers who compete with Pakistan."

With a big assist from Rep. John Spratt, D-S.C., the sensitive products were removed from the bill before final House passage, although an effort to restore them is expected to be made in the Senate.

Sen. Maria Cantwell, D-Wash., is sponsoring a ROZ bill that would exclude the sensitive product categories, and Sen. Lindsey Graham, R-S.C., a co-sponsor of the Cantwell bill, has voiced his strong opposition to any changes. The National Council of Textile Organizations supports the ROZ legislation in general but not the expansion into the sensitive categories.

July 14, 2009