Fashion Intel & Analysis

Concurrent with implementation of the amendments to the Lacey Act, in which the United States is asserting the right to enforce foreign laws addressing illegal logging, the Office of the U.S. Trade Representative on Thursday announced the start of new talks with Indonesia and Malaysia aimed at the promotion of legal forest products trade.  The talks this week are the first round of sessions that will convene two or three times each year.  Delegates from Australia, Brunei, Papua New Guinea, Singapore, Solomon Islands, and Vietnam also joined this week’s talks in Jakarta, Indonesia.  The U.S. delegation was led by USTR but includes members of the departments of State, Agriculture, Justice and Homeland Security, and the Agency for International Development.

The Commerce Department’s International Trade Administration tomorrow will publish notices giving companies 30 days to ask for a tariff rate quota allocation for imported worsted wool fabrics. In two separate notices, Commerce will ask companies that cut and sew men’s and boys’ worsted wool suits, suit-type jackets and trousers in the U.S. to apply for quota, and will also ask companies that weave worsted wool fabrics to apply for quota as well.

 

            The quotas were established under the Trade and Development Act of 2000, but have been extended and expanded several times since then. The Emergency Economic Stabilization Act of 2008 extended the quotas until 2014, and in 2004, the combined quota for worsted wool fabric (HTS 9902.51.11 and 9902.51.11

The Consumer Product Safety Commission (CPSC) is expected to have in place by early 2010 a rule that would formally declare drawstrings a “substantial product hazard,”  due to the strangulation threat they pose for children.  The result would be that imports of children’s upper body garments with drawstrings would be inadmissible. 

 

CPSC staff said in an open meeting held yesterday that the rule, permitted by the Consumer Product Safety Improvement Act of 2008 (CPSIA), should be completed by January or February at the latest.

 

            The CPSIA allows the Commission to declare a product to be a “substantial product hazard,” if the product is covered by voluntary standards that are generally followed by industry.  In this way, the law allows CPSC to regulate products beyond those that are covered by mandatory product standards.  Designated items can be denied entry into the U.S. and destroyed. 

 

            CPSC staff said they are about “three-quarters of the way” toward completing the ruling on drawstring clothing (as well as a ruling on hair dryers that pose a risk of electrocution). Staff is also considering listing certain holiday lights as a third substantial product hazard.

 

            CPSC Chairwoman Inez Tenenbaum and Commissioner Robert Adler were supportive of the effort at the hearing. Both said the CPSIA language seems to resolve how to handle hazardous products that have been identified as hazardous for several years.  Children’s apparel containing drawstrings have been the subject of repeated recalls in the last year or more.

 

            At the same meeting, commissioners appeared to provide assurance that children’s clothing or blankets would not be subject to the CPSIA requirement that durable infant or toddler products must be sold with product registration cards that make it easier to contact consumers in the event of a recall. CPSC staff told commissioners that they believe the law is written in a way that would allow the commission to expand the list of products covered by this rule. In an apparent effort to clarify that durability has its limits, Commissioner Adler then queried whether children’s clothing and blankets might be considered “durable.” Commissioner Anne Northup and CPSC legal staff responded that they think these items could not be included because Congress intended the product registration card requirement to cover durable goods such as furniture.

 

 

 

 

Importers have won at least a temporary victory in their effort to minimize trade disruption caused by new reporting requirements under the Lacey Act. The Animal and Plant Health Inspection Service (APHIS) will announce in a Federal Register notice tomorrow that it is delaying the implementation of several new Lacey Act requirements – this includes a delay of at least one year before importers have to declare the specific origins of particleboard, fiberboard, and wood packaging materials that accompany goods sent to the U.S.

 

The Lacey Act as amended in 2008 expanded the number of protected plants and plant products that are banned from U.S. entry. Applying the law to particleboard, fiberboard and wood packaging materials in particular has been controversial, since importers argue that it is difficult or impossible to determine the exact species used in these materials. This, in turn, makes it difficult or impossible for importers to submit accurate declarations when these goods enter the U.S.

 

Without APHIS’s decision, importers would have been required to begin the arduous process of submitting declarations under the Lacey Act for these materials starting this October.

 

In addition, the announcement says APHIS is seeking comment on how to handle these and a range of other controversial items, and that these goods are “currently under consideration for subsequent phases that would be scheduled to begin on or after September 1, 2010.” This is a sign that there is still discussion to be had on how feasible it is for the trade to offer this information.

            The Federal advisory committee system, including a large number of committees that advise U.S. trade officials on trade negotiations and a broad range of issues related to importing and exporting, appears headed toward major changes under the Obama Administration. 

 

On September 23, the White House special counsel for ethics and government reform announced that he had directed executive agencies and departments to refrain from appointing federally registered lobbyists to federal agency advisory boards and commissions once their current terms expire.  Earlier this week, U.S. Trade Representative Ron Kirk stated that he intended to follow that directive with respect to the advisory committees with which USTR works.  Under the charter of those committees, current appointments will expire in February 2010. 

 

The Cotton Board, which is charged with overseeing the cotton research and promotion program and whose membership is composed of producer and importer representatives (and one consumer representative) appointed by the Secretary of Agriculture, is also presumed to be affected by the White House announcement.

 

            NCTO issued a strongly worded press release blasting the White House decision, charging that it “disenfranchises textile workers” because it will preclude trade association executives, who lobby and therefore are registered lobbyists, from representing their members on advisory committees.  The concern is that small and medium sized enterprises in particular do not have the personnel and resources to participate in advisory committees directly.  NCTO urged the White House to rescind its decision.

 

            Alternatively, there are indications that some company and association executives who are currently registered lobbyists are reconsidering whether they need to be registered.  Some might de-register.  Under the U.S. lobbying laws, registration is required only if a person spends at least 20 percent of his or her time in a single quarter lobbying plus has at least two contacts with “covered officials” during that period. (Two lobbying contacts alone does not trigger a registration requirement.)  Covered officials include anyone in the U.S. Congress, executive branch officials (such as Assistant Secretaries of Departments and higher, the leaders and their deputies of independent agencies), all agency commissioners and anyone in the Executive Office of the President, which includes the White House and the Office of the U.S. Trade Representative (as well as the Office of Management and Budget and other Presidential offices).

 

Company executives who come to Washington for “lobby days” on an occasional basis are unlikely to be subject to the registration requirement, even if they have many contacts during those visits because it is unlikely that lobbying accounts for 20 percent of their time over the quarter period.  Assuming a 40 hour work week and 13 weeks in a quarter, or 520 hours, a person would have to spend at least 104 hours actually lobbying and preparing to lobby or assisting someone to prepare or plan a lobbying effort. Testifying or preparing written comments in response to a Federal Register notice does not count as lobbying.

 

            There is some movement afoot to obtain Congressional action to reverse the Administration decision, although it is unclear whether that effort will gain traction or be successful.  Assuming that the new policy is implemented, the change may mean that the Administration will soon seek out new members for these committees.   

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