From USA-ITA OFF THE CUFF, March 2012 (Volume 3, Issue 3)
On February 16th, USA-ITA brought government officials and our expert counsel to sunny San Francisco for our West Coast Seminar. Hosted by Levi Strauss & Co. at their beautiful (and eco-friendly!) headquarters on the bay, the event provided an opportunity for our members out west to hear updates on trade and customs policy a little closer to home. The seminar was one of USA-ITA’s most informative seminars to date, thanks to a host of expert speakers who were willing to engage in candid discussions on the topics most important to our industry. Login to read all about it and download the presentations from the day.
Julie Hughes, President of USA-ITA, and Richard DiNucci, Deputy Assistant Commissioner of U.S. Customs & Border Protection Office of International Trade
The day opened with a broad discussion on trade policy in 2012 and beyond, featuring David Spooner, USA-ITA’s Washington Counsel with Squire Sanders & Dempsey, and Jon Fee, a partner with Alston & Bird LLC, an Associate Member of USA-ITA.
After providing an overview of the current political situation, Spooner told us what we can expect to happen in terms of trade policy over the coming months. In short: not much. If this was not an election year, Spooner says Congress would very likely approve Russia’s entry into the World Trade Organization, pass Customs Reauthorization legislation, extend the African Growth & Opportunity Act (AGOA) 3rd-country fabric provisions, and pass the CAFTA “fixes.” However, thanks to politics, Congress will likely only debate issues like China’s currency and trade agency reorganization, and forget about important initiatives like Customs Reauthorization, AGOA, CAFTA fixes, as well as the SAVE Act, the OUTDOOR Act, and the Affordable Footwear Act, to name a few. Spooner’s presentation is available here.
Fee expanded on the Administration’s improbable plan to reorganize the trade agencies, and talked about the issues standing in the way of the implementation of the Free Trade Agreements (FTAs) with Colombia, Panama, and Korea--“don’t hold your breath” on these FTAs being implemented anytime soon, he said. Fee’s presentation is available here—you won’t want to miss the final slides with his analysis of the presidential candidates.
We then heard from a number of key government officials. Richard DiNucci, Deputy Assistant Commissioner at the U.S. Department of Commerce Office of International Trade, talked candidly about customs policies that affect textile and apparel importers—even engaging in some friendly heated dialogue with some attendees, moderated by USA-ITA Customs Counsel John Pellegrini.
DiNucci noted that while Customs is an “agency in transition,” the new leadership plans to be aggressive in the trade realm and plans to not just hold meetings on trade and cargo issues, but actually solve issues. In particular, DiNucci noted that some of the agency’s priorities for the year include facilitation of simplified entry and working with companies and brokers to gain a better understanding of how the industry does business. He said the agency is working to strike a balance between facilitation and enforcement, and welcomes the input of USA-ITA members.
Julie Engelbertson, Supervisory Import Specialist at the Port of San Francisco, expanded on CBP’s FY 2012 goals for the Textile Priority Trade Issue. She noted that Customs is focused on outreach to the industry, removing formal entry requirements, raising formal entry limits, and holding more trade preference training for staff. In addition, she said they are working on enforcement of the FTAs, as well as the details of the Trans-Pacific Partnership (TPP) agreement. Engelbertson’s presentation is available here.
The morning session ended with an off-the-record discussion with Gail Strickler, Assistant U.S. Trade Representative for Textiles. Strickler talked primarily about the Trans-Pacific Partnership (TPP) negotiations and had a frank discussion with attendees about the Rule of Origin debate.
Gail Strickler, Assistant U.S. Trade Representative for Textiles
After lunch, Helga Ying, Senior Director of Worldwide Government Affairs and Public Policy for Levi Strauss & Co., built upon Strickler’s talk and outlined the TPP Apparel Coalition’s goals for the agreement. In particular, she discussed the Coalition’s desire for no separate textile negotiations, a flexible and simple Rule of Origin, and immediate duty-free access. She also explained why a yarn-forward Rule of Origin will not work for importers. Levi Strauss sells in 110 countries and sources a variety of specific types of denim in 40 countries. These inputs are not interchangeable—for a company like Levi Strauss, all denims are definitely not alike, so a yarn-forward Rule of Origin would prohibit them from taking full advantage of the TPP agreement. Since apparel imports account for 67 percent of duties collected from the TPP countries, it is important that the agreement work for the industry. Ying’s presentation is available here.
Jon Fee expanded on his earlier discussion with a focus on the Korea FTA, along with Won Sok Yun, Director General and Chief Trade Commissioner for the Korea Trade Investment Promotion Agency (KOTRA) Los Angeles. Yun noted Korea’s importance as the gateway to the region, and talked about the many opportunities for U.S. importers there. Fee’s presentation is available here and Yun’s presentation is available here.
Jon Fee, Partner, Alston & Bird
The conversation then turned to cotton. Elizabeth King, Vice President of Importer Relations at The Cotton Board, reminded attendees of the opportunities available to them to serve on the Board. Of note, she also discussed the Import Assessment Final Rule that went into effect on September 30th. This rule adjusts the cotton assessment to reflect market price changes, expands the assessment to additional HTS numbers, and revises the conversion factors for all categories to reflect changes in the manufacturing process. She was followed by Mark Messura, Senior Vice President of Global Supply Chain Marketing at Cotton Incorporated, who explained why cotton price levels have gone down. King’s presentation is available here and Messura’s presentation is available here.
The last presentation was on a topic we haven’t discussed much before: the business case for sustainability. We all know about sustainability, but what exactly does it mean—and how can companies make their products sustainable? Brian Whitters, the new DVP of Sustainability at SGS, presented a case study on implementing sustainable design—it’s available here.
The day closed with a roundtable discussion with Jon Fee, David Spooner, and John Pellegrini, as well as USA-ITA President Julie Hughes, answering questions about how apparel brands and retailers can affect policy. The attendees expressed that this was a valuable aspect of the seminar, as industry executives were able to have their questions answered and hash out ideas on policy.