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New Trade Law Will Hurt U S Textile Industry

Congress has granted President Bush sweeping new trade negotiating authority and in the process it has created some major headaches for the U.S. textile industry. <BR><BR>The chairman of the American Textile Manufacturers Institute (ATMI) called the legislation "an unmitigated disaster," but apparel manufacturers and other importers hailed the measure as a positive step toward reinforcing trade partnerships and opening new opportunities for market expansion.<BR><BR>The basic legislation granted President Bush Trade Promotion Authority (TPA), formerly known as "fast track." It will enable him to negotiate international trade agreements that Congress can only accept or reject but cannot amend. <BR><BR>U.S. trading partners have contended that TPA was an essential element in any future regional and bi-lateral trade agreements. The problem from the standpoint of the U.S. textile industry is that the TPA legislation was loaded down with other issues that will have a major impact o

Congress has granted President Bush sweeping new trade negotiating authority and in the process it has created some major headaches for the U.S. textile industry. The chairman of the American Textile Manufacturers Institute (ATMI) called the legislation "an unmitigated disaster," but apparel manufacturers and other importers hailed the measure as a positive step toward reinforcing trade partnerships and opening new opportunities for market expansion.The basic legislation granted President Bush Trade Promotion Authority (TPA), formerly known as "fast track." It will enable him to negotiate international trade agreements that Congress can only accept or reject but cannot amend. U.S. trading partners have contended that TPA was an essential element in any future regional and bi-lateral trade agreements. The problem from the standpoint of the U.S. textile industry is that the TPA legislation was loaded down with other issues that will have a major impact on textile and apparel trade. In addition to giving the president expanded trade negotiating authority, the legislation, for the first time, grants textile and apparel tariff concessions to the Andean nations of Colombia, Peru, Ecuador and Bolivia. It also provides for expansion of the amount of textiles and apparel that can enter the U.S. duty free from the Caribbean Basin and Sub-Saharan African nations. The conference report on the bill dropped a provision in the original Senate version of the bill that said a trade agreement could be amended by Congress if the agreement weakens or circumvents U.S. anti-dumping and other trade protection laws.Noting that the U.S. textile industry is experiencing major layoffs, plant closings and bankruptcies, Rep. John Spratt, (D-SC) a leader of the Congressional Textile Caucus, said the legislation makes "unprecedented" textile and apparel import concessions that can only mean more trouble for the industry. He said that by year five of the bill more than 20 percent of U.S. imports will be duty free, and that is " a unilateral benefit, because none of the countries that benefit will reciprocate by lowering their tariffs."ATMI trade officials say the bill will allow "massive increases" in the caps on apparel allowed to enter the U.S. duty-free from the Sub-Saharan Africa, Andean and Caribbean nations that do not have to be made of U.S. fabric. The final version of the bill dropped the Edwards amendment in the Senate version of the bill that called for strong textile negotiating objectives, including a requirement that other nations lower their trade barriers before the U.S. makes any further tariff concessions. It was replaced with much more general overall negotiating objectives to reduce trade barriers, strengthen dispute settlement procedures and protect U.S. trade remedy laws.Importers and companies heavily involved in overseas marketing see the bill differently. Kevin M. Burke, president and chief executive officer of the American Apparel and Footwear Association, said the legislation contains "many important initiatives that will help our industry compete in the future," adding that "TPA gives the president the tools he needs to eliminate tariff and non-tariff barriers that are keeping U.S. branded apparel and footwear out of key markets. Brenda Jacobs, a Washington attorney representing the U.S. Association of Importers of Textiles, said importers are generally pleased with the new law and in particular the potential for increased trade with the Andean nations and clarification of the dyeing and finishing requirements for products benefiting from special Caribbean and Andean trade preference programs.The U.S. textile industry won a significant victory in a separate, but related bill passed by Congress and signed by the President. For more than two years, the industry has been seeking clarification of just which fabrics qualify for special tariff and quota concession when used in apparel products assembled in the Caribbean and Andean nations and exported to the United States. The law states U.S. fabric shipped to the Caribbean and Andean regions for assembly under preferential trade programs must be dyed, finished and printed in the United States. In order to qualify for the preferential treatment.By James A. Morrissey, Washington Correspondent




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