Fashion Intel & Analysis

Ahern Plans to Retire in January 2010
Sources at the Department of Homeland Security and Customs and Border Protection report that Acting Customs Commissioner Jayson Ahern will retire from Customs and Border Protection on January 2, 2010. The Secretary of the Department of Homeland Security, Janet Napolitano, confirmed that he is leaving. The announcement that Ahern is leaving increases the pressure on the Senate Finance Committee to consider the Obama Administration nominee for Commissioner. The Committee still has not scheduled a hearing on the nomination of Alan Bersin to serve as Customs Commissioner.

On November 18, 2009, Representative Jim McDermott (D-WA) introduced H.R. 4101, the New Partnership for Trade Development Act.    McDermott hopes that the House will use this legislation as the basis for the reform of all U.S. trade preference programs in 2010.  The bill extends the Generalized System of Preferences program through 2015, with the option for a longer extension if the World Trade Organization Doha negotiations are successfully concluded.  There also would be a single Rule of Origin for all preference programs. 

McDermott says the legislation may be controversial to some, but that he wants to start with an ambitious agenda.   While the legislation extends duty-free and quota-free benefits to all Least Developed Countries (LDCs) and to all Sub-Saharan Africa (SSA) countries, the duty-free benefits for apparel are limited for any countries that supply more than two percent of the U.S. apparel imports.  Only two countries are affected by this restriction:  Bangladesh and Cambodia.    At the House Ways and Means Trade Subcommittee hearing on Tuesday, there was serious opposition to any duty-free benefits for these countries, suggesting that the McDermott bill will receive a negative response from the U.S. and overseas groups concerned about competition from Bangladesh and Cambodia. 

The National Council of Textile Organizations is once again repeating its charge that the U.S. textile industry is being harmed by subsidized Chinese imports. The latest reiteration of its allegations is contained in a letter to members of the U.S. Senate, urging them to support legislation that would re-establish “Super 301.” (Super 301 was a law (now expired) that required the U.S. Trade Representative’s office to annually identify priority foreign country practices, the elimination of which were likely to have the most significant potential to increase U.S. exports.  Within 90 days after identification of priority foreign practices, USTR was required to initiate investigations of any priority practices identified in the report.) In a letter sent November 9 (presumably to all Senate offices), NCTO argues that the bill, S. 1982, could be used to fight China’s textile subsidies.

“The textile industry, for example, has eroded over the past decade due to predatory and mercantilist trade practices of the Chinese government,” the letter asserts. “In fact, the Chinese government offers its textile and apparel industry 63 known subsidies, including a number which are believed to be WTO illegal. If S. 1982 were enacted, the United States government would be required to focus its efforts and resources on those unfair Chinese government subsidies that cost the most U.S. jobs.”

S. 1982 was introduced by Sen. Sherrod Brown (D-OH) and has five co-sponsors.

Separately, Reps. Tim Ryan (D-OH) and Tim Murphy (R-PA) gathered a total of 45 signatures from Members of Congress for a letter to the President criticizing the decision by the Department of Treasury not to name China as a currency manipulator.

Today Senators Charles Schumer (D-NY) and Lindsey Graham (R-SC) petitioned Commerce Secretary Gary Locke to self-initiate a Countervailing Duty (CVD) investigation against China’s currency manipulation.   The Senators tell the Administration to treat currency manipulation as a subsidy to Chinese exporters.  In the press release from the Senators, they say a CVD case is an alternative to the Administration naming China as a currency manipulator in the regularly-scheduled Treasury Department reviews.

Frederic Bourke, co-founder of accessories designer Dooney & Bourke, was sentenced on Tuesday to a year in prison and fined $1 million under the Foreign Corrupt Practices Act for his role as an investor in a deal that involved bribing foreign government officials. Bourke was convicted earlier this year of conspiracy to violate the FCPA and lying about these efforts to investigators, with the court determining that he knew or should have known about the bribes.

Reportedly, Bourke obtained a lighter sentence because he, too, was a victim of fraud and had testified against the person with whom he had invested. Bourke is expected to appeal his conviction to the Second Circuit Court of Appeals.