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Washington Outlook Archive
James A. Morrissey, Washington Correspondent

US Seeks Renewal Of Trade Talks

James A. Morrissey, Washington Correspondent

U S Trade Representative Robert B. Zoellick has made an urgent appeal to the 140 member nations of the World Trade Organization (WTO) to set aside their differences and reopen trade liberalization talks this year. In letters to WTO member-nation trade ministers, Zoellick outlined what he called a common sense approach to advancing the trade talks that were suspended last September, when it became apparent there were vast differences between developed and developing countries. Saying he does not want 2004 to be a lost year, Zoellick proposed a ministerial meeting in Hong Kong before the end of this year.

Any renewed negotiations would be of vital concern to US textile manufacturers and retailers and other importers of textiles and apparel. In his letters to foreign trade ministers, Zoellick specifically said tariffs on textiles and apparel need to be cut substantially as part of a comprehensive agreement that would address both tariff and non-tariff barriers to trade.

With all textile and apparel quotas due to expire at the end of this year, domestic textile manufacturers are relying on tariffs as their only remaining protection from overseas competition. If they have their way, there would be no reductions in US textile and apparel tariffs until other nations first lower theirs to US levels. Then, they say, any additional reductions should be reciprocal. In addition, they have been pressing for sectoral negotiations, in which textiles and apparel tariffs and non-tariff barriers would be considered apart from other commodities, so their tariffs could not be traded for concessions in other product sectors. In his letters, Zoellick suggests sectoral negotiations might be employed.

Textile and apparel importers, however, are strongly in favor of eliminating tariffs as soon as possible. They say textile and apparel tariffs are among the highest of any products, and cost American consumers some $80 billion a year. Zoellick, who is conducting a series of face-to-face meetings with key trade ministers, says the administration remains committed to achieving zero tariffs by 2015, and reducing or eliminating non-tariff barriers to trade as soon as possible.

officers

Supervisory Customs inspectors check intelligence information to determine which shipping containers should be searched.

Agency Sees Flaws In Illegal Imports Policing

The General Accounting Office (GAO) sees serious flaws in the way the Customs Service is policing imports of textiles and apparel. An 83-page report by Congress’ top watchdog agency cites major weaknesses in the processes used to inspect textile and apparel imports, and foresees even bigger problems when all textile and apparel import quotas are due to expire at the end of this year. In response to a rash of complaints from domestic textile manufacturers, Congress ordered GAO to look into just how well the Customs Service is monitoring and taking action against illegal textile transshipments. The report card was anything but good.

Because of its limited resources, the Customs and Border Protection (CBP) system uses a targeting approach focusing on what it sees as the “most high-risk” operations. In 2002, the CBP targeted a mere 2,500 textile shipments out of more than 3 million, or 0.08 percent of textile shipments entering the United States. The report says the US government depends heavily on information gained from inspections of foreign factories and on reports from foreign governments, but it acknowledges that foreign information is often unreliable. It also points out that when quotas disappear at the end of this year, they no longer will be able to conduct foreign factory visits, and will have to rely on overseas attachés and cooperative foreign governments. 

Government Funds Textile Research

Congress has approved $11 million to continue research projects designed to improve the US textile and apparel industry’s competitiveness and to combat import fraud. In its appropriations for this fiscal year, Congress granted $10 million to continue the work of the National Textile Center (NTC), $3 million to the Textile/Clothing Technology Corp. ([TC]2), and $1 million to develop a tracer system to help determine whether or not garments imported under trade preference programs are made from components made in the participating countries. An additional $300,000 for tracer research has been provided in another appropriations measure.

The funding will enable [TC]2 to continue its programs to streamline supply chain technology. The idea is to compress supply chain time and permit quicker turnarounds in sales and to respond to fashion changes. It is working on projects that will help manufacturers develop the full package that increasingly is being sought by retailers. Other projects center on 3-D body scanners that will help made-to-order tailors do a better and more efficient job of measuring their customers. This technology also will help made-up clothing manufacturers do a better job of predicting sizes for various lines of men’s and women’s clothing.  

NTC programs focus on basic research to develop new and improved products and manufacturing techniques with projects involving basic chemistry and material fabrication, and on economic value changes and consumer attitudes. While eight textile colleges coordinate the programs, as many as 20 others work on cooperative projects.

bodyscanner

[TC]2’s 3-D body scanner aids manufacturers
in predicting clothing sizes.

Administration Says No To Quota Expansion

The Bush administration has rejected a request from textile and apparel importers to increase import quotas on what it considers popular product categories in which quotas are likely to be filled early this year. The importers had urged the administration to use the so-called carry forward provision in the quota control system, a provision that permits importers to borrow quota from the coming year as quotas are filled. Since there will be no quotas in 2005, textile industry officials have claimed there is nothing to borrow. Secretary of Commerce Donald L. Evans apparently agreed, as he told the importers that permitting carry forward at this time would be inconsistent with the carry forward principle.

Julia K. Hughes, vice president of the United States Association of Importers of Textiles and Apparel, expressed disappointment with the decision and said importers will continue to pursue some relief because shortages and higher prices are not in the best interests of retailers and consumers. She said the blanket approach taken by the administration does not address specific problem areas in which shortages and higher prices are inevitable as quotas are filled. She said importers will continue discussions with the administration in the hope of getting relief in some of the most popular categories such as knit shirts, trousers, coats and nightwear, as well as some home furnishings.

US textile manufacturers contend carry forward is not necessary, and the needs of importers can be filled by manufacturers in the United States, Mexico, Canada and the Caribbean — where special preferential trade agreements exist.

March 2004

 




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