Fashion Intel & Analysis

In a Federal Register notice to be published tomorrow, the Consumer Product Safety Commission (CPSC) is asking for a broad range of industry guidance on how importers and manufacturers should comply with the Consumer Product Safety Improvement Act of 2008 (CPSIA). The notice formally announced a December 10-11 "workshop" in Bethesda, Maryland, which will be used to gather information, as well as a written comment period.

 This may be an important opportunity for the trade to help the CPSC shape its implementation of the law. Registration information for attending, and a link for viewing the workshop via webcast, can be found at:  Written industry comments will also be accepted until January 11, 2010).

 The agenda for the workshop is extensive. For example, the CPSC is seeking input on the critical question of component testing. The CPSC has indicated it might allow manufacturers to rely on safety certificates from upstream component makers, which means components would not have to be re-tested by downstream users. This option would be desirable for apparel importers who need to ensure components like zippers and snaps comply with the law. On this issue, the CPSC is asking for input on how to determine that manufacturers are exercising "due care" to ensure the components are safe, and what reasonable steps they might take to determine if a certificate is false.

In addition, the Commission puts forward the idea that a manufacturer’s "reasonable testing program" to ensure products meet CPSC guidelines should include a product description, testing, the development of a full testing plan, plans for dealing with failed test results, and documentation of the testing program. But the CPSC is asking industry whether these elements are sufficient, or whether additional requirements should be added. CPSC also has several questions about how often manufacturers should test their products, and what sample sizes should be used.

CPSC also says it is considering requiring manufacturers of children’s products to come up with their own reasonable testing programs, even though they are already required to have products tested by a third party to ensure they meet strict new lead content guidelines. In the area of testing for children’s products, CPSC is asking how often tests should be performed, what product change might require new tests, and how verification and labeling should work to ensure compliance.

 Among other things, the CPSC is also asking a range of questions about how compliance procedures might work for smaller companies, what the costs of compliance might be for those companies, and whether there are ways to minimize these costs.

On Friday afternoon, House Ways and Means Chairman Charles Rangel (D-NY) introduced a bill to extend the Andean trade preferences program and the Generalized System of Preferences program for another year, signaling that a deal has been reached between House Republicans and Democrats. Today, the bill is on the “suspension calendar,” and scheduled for a vote sometime after 6:30 pm.

The suspension calendar means that the bill will require a two thirds majority to pass, but assuming that there is a deal, that should not be a problem. Under the bill introduced by Chairman Rangel, there will be a review under the Andean program in June 2010, an apparent response to concerns about Ecuador.

Both programs are scheduled to expire December 31, unless extended. Even assuming the House approves the bill tonight, the Senate still has to approve an identical bill before it can go to the President for signature and become law.
USA-ITA is among the associations that sent a letter to all Members of the House today urging each to support the bill when it comes up for a vote. For a copy of that letter, see the USA-ITA website.

U.S. Trade Representative Ron Kirk today sent letters to House Speaker Pelosi and Senate Majority Leader Reid formally notifying them that the Administration intends to enter into negotiations toward a regional free trade agreement with Australia, Brunei, Chile, New Zealand, Peru, Singapore, and Vietnam. The first round of the proposed Trans-Pacific Partnership negotiation is expected to take place in March in Australia.

The omnibus appropriations bill that was just approved by the Congress includes report language that could help nudge the Consumer Product Safety Commission to extend its stay of enforcement of the lead content standards and open the door to a more flexible standard for determining whether components should be banned from children’s products. The report language instructs the CPSC to recommend improvements to the Consumer Product Safety Improvement Act (CPSIA), asking the CPSC to “assess enforcement efforts… including difficulties encountered, as well as recommendations for improvements to the statute,” and to report back by January 15, 2010, to the House and Senate Appropriations Committees, House Energy and Commerce Committee, and the Senate Commerce, Science, and Transportation Committee.

This request from Congress could break some of the logjam that has developed within the CPSC, since some Commissioners have argued that small businesses will likely have problems complying with the law, and that while some flexibility would be helpful, the law is written too tightly to allow it. One example of an issue that has come up is the CPSC’s inability to decide that a children’s item or component can be exempt from lead content testing even though it poses a very limited risk of lead ingestion, since the law has a zero-tolerance for lead content.

The report language highlights as examples lead testing requirements for parts of youth motorized off-road vehicles and bicycles, sporting equipment and books, and says conferees believe these products that are subject to the CPSIA even though they “likely were not intended to be included.” It adds that the conferees “urge the CPSC to continue considering exemptions under section 101(b) of the CPSIA for parts of products that, based on the CPSC's determination, present no real risk of lead exposure to children.”

Separately, there are blog reports that House Committee on Energy and Commerce Chairman Henry Waxman (D-CA) will try to attach a CPSIA-related amendment to the Defense Department appropriations bill (H.R. 3226), which could come up later this week. The “discussion draft” indicates that the amendment that would give the CPSC flexibility it currently does not believe it has to exclude products, components or materials from lead content rules if normal use of the item will either not result in lead absorption or if the item cannot reasonably be made without lead.

On December 15, 2009, the Committee for the Implementation of Textile Agreements (CITA) will publish the Federal Register notice announcing the new limit for the Haiti HOPE Value-Added Apparel Tariff Preference Level (TPL).    The 2010 limit is lower than the 2009 limit – reflecting the decrease in overall U.S. apparel imports.   Each year the TPL is calculated to be equal to 1.25 percent of the U.S. apparel imports. 

The new TPL offers duty-free access to apparel make in Haiti using fabric of any origin.  However, effective December 20, 2009, at least fifty-five percent of the value of the final product must be produced in Haiti, the U.S., or a U.S. Free Trade Agreement or preference program partner.  This is an increase in the value-added requirement that is required by the legislation.