Fashion Intel & Analysis

CBP Searches for COAC Applicants

Customs and Border Protection is looking for applicants to join its Advisory Committee on Commercial Operations (COAC). COAC provides advice and makes recommendations to the Commissioner of CBP, Secretary of Homeland Security, and Secretary of the Treasury on all matters involving the commercial operations of CBP and related DHS functions. During this two-year term, is expected that the Committee will consider issues relating to enhanced border and cargo supply chain security, CBP modernization and automation, informed compliance and compliance assessment, account-based processing, commercial enforcement and uniformity, international efforts to harmonize customs practices and procedures, strategic planning, northern border and southern border issues, CBP agricultural inspection and import safety. This is an opportunity to have your concerns and suggestions heard by top Customs Officials, so we encourage anyone interested to apply. You can learn more online here.

USTR Begins TPP talks in Australia

A United States negotiating team has begun the first round of talks on the Trans-Pacific Partnership (TPP) Agreement in Melbourne, Australia today. The 22-member team, led by Assistant U.S. Trade Representative for Southeast Asia and the Pacific Barbara Weisel, will engage counterparts from Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam on creating a regional Asia-Pacific trade agreement. Also joining Weisel at the talks is Gail Strickler, Assistant US Trade Representative for Textiles.

Ways and Means Committee Schedules Hearing on China's Exchange Rate Policy

Ways and Means Committee Chairman Sander M. Levin (D-MI) yesterday announced a full committee hearing on the exchange rate policy of the Government of the People’s Republic of China, and its impact on the U.S. and global economies. The hearing will take place on Wednesday, March 24, 2010, in the main Ways and Means Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 a.m.

The Committee press release contains the following summary about the hearing, "Economists generally agree that the Chinese currency (the renminbi – "RMB" – or "yuan") is substantially undervalued as a result of market intervention by the Government of the People's Republic of China. The purpose of this hearing is to consider: (1) the immediate and long-term impact of China's exchange rate policy on the U.S. and global economic recoveries and, more specifically, on U.S. job creation; and (2) steps that could be taken to address the issue." Please click here for complete hearing details.

The "Trade Fact of the Week" is a weekly email newsletter published by the Democratic Leadership Council's Trade & Global Markets Project. The following "trade fact" is from Ed Gresser, Director of the DLC Project, who spoke at Tuesday's Senate Finance Committee hearing on Preference Program reform.


66 percent of America's imports are duty-free.

THE NUMBERS: Duty-free share of imports from -

European Union 66%
"Preference" beneficiaries 64%
China 57%
Pakistan 12%

* 139 low-to-middle-income countries and territories in Africa, Latin America, Caribbean, Asia, Middle East and Pacific.

WHAT THEY MEAN:

Reviewing America's six "trade preference" programs yesterday at the Senate Finance Committee, the DLC's Ed Gresser graded them "A" for intent and "B" for performance The preferences waive some, and sometimes most, tariffs on goods from 139 developing countries and territories around the world, with especially favorable treatment for African countries and Haiti. Last year they covered $21 billion in poor-country imports (excluding oil, or $62 billion counting oil) -- about 1.6 percent of America's total non-oil imports and 15 percent of imports from the preference countries.

In practice, the preferences' overall effect is to even out the American trade regime rather than give poor countries better treatment than rich. This is because on its own, the American tariff system is tougher on poor countries (or more specifically, on poor countries without natural resources). Comparing the $240 billion in goods bought from preference countries with treatment of the roughly comparable value of Canadian, European, and Chinese goods finds the following:

    Canada: 97 percent duty-free. About $8 billion of last year's $225 billion in Canadian merchandise seem to have got tariffs, mainly from anti-dumping cases and lumber disputes. The rest were duty free under the permanent tariff system -- natural gas, books, aluminum, planes, paper -- or through NAFTA. Canadians, meanwhile, imported about $205 billion in American goods.

    European Union: 66 percent duty-free. Americans bought $281 billion in EU goods last year (and about $160 billion in services, which get no tariffs). About $183 billion of this arrived duty free, including planes, artwork, beer, military gear, smoked salmon, computers, satellites, perfumes, etc. The $95 billion in tariffed European goods range from cars to fashion clothing and accessories, jewelry, wine and power equipment. EU members imported $220 billion in American goods.

    Preference countries: 64 percent duty-free. Preference beneficiaries supplied $240 billion in goods, with $90 billion permanently duty free and another $62 billion under preferences. Diamonds, shrimp, rubber, telephones, wood, etc. are permanently duty free; preferences excuse Colombian flowers, Turkish stonework, Thai silver jewelry, Brazilian auto parts, Venezuelan and Nigerian crude oil, South African cars, Kenyan clothes and so on. Indonesian shoes, Pakistani towels, Cambodian pajamas, Brazilian power gear and Bangladeshi shirts, among much else, remain subject to tariffs. The preference countries bought $150 billion in American goods last year, including about a sixth of manufacturing and agricultural exports.

    China: 57 percent duty-free. China, surpassing Canada as the largest single exporter to the United States last year, sent over $296 billion in goods (and a likely $10 billion in services). Of this total, $168 billion was duty free: major examples include cameras, toys, PCs, furniture and telephones. Tariffed goods included $128 billion in clothes, shoes, TV sets, DVD players, luggage, lamps, small appliances and so forth. China bought $70 billion in American goods last year, with Hong Kong and Macao adding another $20 billion.

The mix of permanent tariffs and preference waivers thus leaves lower-income countries, on average, treated slightly more easily than Chinese goods and a bit less favorably than EU products. Their main gap is in treatment of low-income Asia and some big Muslim states. Lacking large natural-resource endowments, these countries rely on exports of clothes, home linens and a few other light manufactures, where preference programs waive tariffs for most African and Latin American countries but keep them in force for low-income Asia. Thus only 12 percent of Pakistani imports -- mainly towels, sheets and pillowcases, clothes and luggage -- are duty free, along with 8 percent of Laos' goods, 4 percent of Bangladeshi products, and 1 percent of Cambodia's pajamas and shirts.

FURTHER READING:

Gresser suggests three reforms to the preference system: (1) simplify and rationalize the six programs, merging all but the QIZ into a single system with common eligibility requirements and rules, and duty-free clothing rights to all least-developed states and selected security-sensitive countries; (2) refocus the African trade program with special attention to agriculture and rural industry; (3) improve benefits for Haiti and broaden the QIZ program.

The testimony: http://www.dlc.org/ndol_ci.cfm?kaid=108&subid=900010&contentid=255120

Hearing record: http://finance.senate.gov/sitepages/hearing030910.html

Introduction to the preferences -

 
 
 
In this TDM:

Specter Introduces Legislation to Allow Civil Court Cases for Trade Remedy Investigations

On March 4, Senator Arlen Specter introduced S. 3080, the Unfair Foreign Competition Act of 2010. If passed, the legislation would allow U.S. companies to file anti-dumping and countervailing duty cases in civil court. While the firms would still have to initiate a petition with the U.S. Commerce Department, the court proceedings would take the place of the determination by the ITC. However, cases could be filed in the district courts where affected companies and manufacturing facilities are located, and decisions could be appealed to the U.S. Court of Appeals. Specter says that the legislation would give affected industries greater flexibilities to seek trade remedies, and would alleviate partisan political pressures that can impact ITC determinations.

Finance Committee Releases Sanchez Responses; Baucus Asks About Earned Income Allowance Program

The Senate Finance Committee has released the written questions and responses submitted by Francisco Sanchez, the Obama Administration nominee for Commerce Undersecretary for International Trade. If confirmed, Sanchez would have responsibility to oversee the Commerce Department International Trade Administration (which handles trade remedy investigations) and the Office of Textiles and Apparel (OTEXA).

While most of the questions from the Senators pressed Sanchez to make commitments to improve the enforcement of dumping and countervailing duty cases, or to guarantee a tougher position on trade issues, Committee Chairman Max Baucus (D-MT) did raise one textile issue. Baucus asked Sanchez for his opinion about the OTEXA implementation of the Earned Income Allowance program for the Dominican Republic. The Senator challenged the OTEXA interpretation of the term "wholly formed" to require that U.S. fabric used to qualify for the program must be dyed and finished in the United States. While Baucus said this interpretation is not consistent with the original intentions of Congress, Sanchez only replied that “If confirmed, I will look into this matter closely in order to ensure that the concerns of all stakeholders are considered.”

New Democrat Coalition Releases Trade Agenda; Supports Preference Reform, FTAs, and Trade Promotion Authority

Earlier this week the New Democrat Coalition released their Trade Policy Agenda. The 69-member coalition of pro-trade Democrats say U.S. trade policy should be proactive. They argue that by leading global trade liberalization, the U.S. will be able to promote domestic industries and employment. The nine priorities listed by the New Democrats address Intellectual Property Rights, Trade Adjustment Assistance, workers rights, and international agreements.

One of the New Democrats' priorities is preference program reform. They reference the 9/11 Commission report, which stated that trade liberalization is a key tool to protect U.S. national security by encouraging development in unstable regions. The agenda calls for trade preference reform as a means to peace and stability.

The trade agenda also emphasizes the importance of Free Trade Agreements (FTA). The New Democrats say that the U.S. manufacturing sector has a trade surplus with our FTA partners, and that trade agreements are good for the U.S. economy and employment. They say the coalition is working to pass the pending FTAs with Colombia, Panama, and Korea, and supports the Trans-Pacific Partnership negotiations. They also assert that renewed Trade Promotion Authority is vital to U.S. economic interests.

CPSC Releases Overview of Product Testing Requirements

On March 12, the Consumer Product Safety Commission (CPSC) released the webinar slides for a presentation entitled Regulated Product Testing and Certification. The presentation reviews the testing requirements under the Consumer Product Safety Improvement Act (CPSIA). Passed in 2008, the CPSIA requires that any consumer product regulated by a safety standard must be accompanied by a Certificate of General Conformity; and any regulated children's product must include third party testing certification. As of February 2010, there were 236 labs recognized by the CPSC, located in twenty-seven countries. China is home to the most recognized labs (sixty-eight), followed by the U.S. (sixty-five). Of these labs, almost ninety percent are accredited to test for lead paint. The presentation addresses some of the concerns related to what constitutes a reasonable testing program, including sampling, and periodic retesting.

House GOP Adopts Unilateral Ban on All Earmarks

Yesterday, Congressman John Boehner (R-Ohio) issued the following statement after House Republicans adopted a unilateral moratorium on all earmarks, including tax and tariff-related earmarks: “For millions of Americans, the earmark process in Congress has become a symbol of a broken Washington. Today House Republicans took an important step toward showing the American people we’re serious about reform by adopting an immediate, unilateral ban on all earmarks. But the more difficult battle lies ahead, and that’s stopping the spending spree in Washington that is saddling our children and grandchildren with trillions of dollars in debt. Only then will we have succeeded in bringing fundamental change to the way Congress spends taxpayers’ money.”

The DOC International Trade Administration's Exporters' Textile Advisory Committee will hold a meeting on Tuesday, April 20th, 2010. The Committee provides advice and guidance to Department officials on the identification and surmounting of barriers to the expansion of textile exports, and on methods of encouraging textile firms to participate in export expansion. The Committee functions solely as an advisory body in accordance with the provisions of the Federal Advisory Committee Act.

Meeting Details

Date: Tuesday, April 20,2010
Time: 1:00-4:30 p.m.
Location: Training Room A, Trade Information Center, Ronald Reagan Building, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20230

The meeting will be open to the public with a limited number of seats available. For further information contact Kim-Bang Nguyen at (202) 482-4805 or Larry Brill at (202) 482-1856. Minutes of all ETAC meetings are posted at OTEXA.ita.doc.gov.