News & Publications
Mexico TPL (1) Embargoes; Safeguard Actions on Imports from Oman; New Bill Prohibits Trade Preferences for Textiles & Apparel from Cambodia; Jobs Bill Introduced
In this TDM:
- Mexico TPL (1) Embargoes
- CITA Publishes Procedures for Considering Requests for Textile and Apparel Safeguard Actions on Imports from Oman
- Congressmen Develop Legislation Prohibiting Trade Preferences for Textiles and Apparel from Cambodia
- Baucus and Levin Introduce Jobs Bill; Expands Wool Trust Fund and Cotton Trust Fund and Duty Suspensions
- Sidley Austin Releases Update on Federal Appeals Court Case Involving Imports from China and Vietnam
On Friday, CBP confirmed that Mexico Tariff Preference Level 1 (Cotton and Man-Made Fiber Apparel made from fabric of any origin) embargoed with goods offered on May 17, 2010 at 2:50 p.m. Mexico TPL (1) is the first to TPL embargo in 2010, and has been the first to embargo every year since 1999. As a reminder, imports of these garments continue to enter the U.S., but they are charged the standard duty rate.
In Friday’s Federal Register, the Committee for the Implementation of Textile Agreements (CITA) announced the procedures for textile and apparel safeguard actions under the U.S.-Oman Free Trade Agreement (FTA). The FTA states that if an increase in U.S. imports from Oman of a textile product damage or threaten to damage the U.S. industry, the U.S. may impose a Safeguard tariff equal to the Most Favored Nation tariff rate.
The timeline for a Textile Safeguard under the U.S.-Oman FTA is relatively quick. CITA will determine within fifteen working days whether to accept a petition. If the petition is accepted, CITA will publish a Federal Register notice requesting comments on the petition, allowing thirty days for comments. The final determination will come sixty days after the close of the comment period. In addition, CITA may also self-initiate a Textile Safeguard case, following the same timeline. These procedures are effective immediately.
Representatives William Delahunt (D-MA) and Dana Rohrabacher (R-CA) recently released a draft of the Cambodian Trade Act of 2010. If passed, the bill would prevent the U.S. from forgiving or reducing any debt owed by the government of Cambodia. More importantly, the legislation also prohibits the U.S. from offering any trade preferences for textiles, apparel, or footwear made in Cambodia. The representatives say the legislation is a response to Cambodia's deportation of Uighur refugees back to China in December 2009. The bans on trade preferences would enter into force on the date they are signed into law.
On May 20, Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Sander Levin (D-MI) released a summary of the American Jobs and Closing Tax Loopholes Act. While the legislation deals mainly with job creation and tax programs, it also includes a few trade provisions that are supposed to promote U.S. businesses.
Among these is an increase in funding for the Wool Trust Fund by diverting other apparel tariff revenues. The exact mechanism for this funding is not clear from the bill summary. Payouts from the Wool Trust Fund are available only to a limited number of U.S. manufacturers that meet certain criteria. The program was created by the 2004 Miscellaneous Tariff Bill to encourage more domestic wool production. While initial funding for the Fund was $5.3 million, revenues shrank over the past two years, decreasing payouts. The legislative proposal says that it will use tariffs collected from the imports of other apparel products in order to maintain the Trust Fund at the 2004 funding level.
The legislation also renews two expired cotton provisions, the Cotton Trust Fund and several duty suspensions that expired along with the last Miscellaneous Tariff Bill. These provisions are supposed to help U.S. companies throughout the cotton supply chain. The bill would renew both provisions until December 31, 2013.
Expanding on the update included in the May 17th Textile Development Memo, Sidley Austin LLP released an International Trade Update about the U.S. Court of Appeals for the Federal Circuit action to strike down a U.S. Department of Commerce regulation used to value labor rates in anti-dumping proceedings involving products from non-market economy (NME) countries. The surprising invalidation of the regulation, which has been in effect for thirteen years, introduces new uncertainty in the Department’s dumping calculations and is anticipated to cause dumping margins to decline on labor-intensive products from NME countries, primarily China and Vietnam.