Fashion Intel & Analysis

In this TDM

House Hearing on CPSIA Fixes Acknowledges Big Problems, But Indicates Only Small Changes Likely
By Brenda A. Jacobs and Pete Kasperowicz

The House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection held a hearing today to discuss proposed legislation to amend the Consumer Product Safety Improvement Act (CPSIA).  Full Committee Chairman Henry Waxman (D-CA) has drafted legislation that would give the Consumer Product Safety Commission (CPSC) the flexibility to exempt some products and components from lead testing rules, exempt used children's products, and allow "small batch" manufacturers to use less costly testing methods to meet the requirements of the law.

The hearing – the first on the CPSIA since it became law in August 2008 -- was long sought by Republicans and industry representatives who want fundamental reforms to the CPSIA.  Speaking briefly at the beginning the hearing, Waxman said the law needs "targeted changes," and asserted that his proposed bill (which has yet to be formally introduced but is entitled the Consumer Product Safety Enhancement Act, or CPSEA) reflects a compromise between industry groups and consumers. He insisted that the bill's "text is not set in stone," but also emphasized that he wants any changes to it to be "narrowly crafted."  

Republicans used their opening remarks to note that the 63 page CPSIA has led to thousands of pages of regulations that are confusing and stifling to small companies, and argued that Waxman's proposed bill does not go far enough to ease this burden. Rep. Joe Barton (R-TX), the ranking member on the full committee, said he supports Waxman’s proposal because it "moves the ball forward," but said he is still worried that further improvements are needed to ensure that the law does not overreach. Chairman Emeritus John Dingell (D-MI) used his opening statement to place all the blame for the CPSIA's problems on the Senate.  He asserted that the Senate is where all the "unintended consequences" arose, conceding that there are unnecessarily onerous burdens on business with little appreciable positive impact on health and safety.

Dingell asked the seven member panel of witnesses a series of questions about Section 2 of the proposed bill and possible report language. That section would allow the CPSC to exempt a product or component from lead testing rules if three conditions were met: 1) it is not "practicable" to produce the product or component without lead, 2) the item is not likely to be mouthed or ingested, and 3) an exemption will have no "material adverse effect" on public health. Several witnesses asked that the terms "practicable" and no "material adverse effect" be strictly defined either in the bill or in report language accompanying the bill – but none appeared to directly challenge what is essentially a functionality requirement for the lead content exemption.

The panel of witnesses was composed of six representatives of business, including from the apparel industry, the handmade toy and sellers of used goods.  Steve Levy, speaking as part of the apparel industry, argued for a broad exemption to lead testing for clothing, since tests have shown there is no risk of lead absorption through clothing, and also asked that language be included that ensures the federal law pre-empts any state law that tries to address product safety.  Levy also pressed for an exemption for rhinestones.  He also suggested that for apparel, an RN label should be deemed to satisfy the tracking label requirement. 

Rachel Weintraub of the Consumer Federation of America was a last minute addition to the witness list.  Not surprisingly, Weintraub was diametrically opposed to the other witnesses. Weintraub said her group does not oppose the Waxman bill but would oppose any attempt to weaken it. Weintraub rejected the ideas of 1) giving the CPSC more authority to conduct risk assessments to exempt products  (saying the CPSC had this authority before and never used it), 2) lowering the age for defining children's products, or 3) restricting the requirement for tracking labels to durable goods, even rejecting a suggestion by one Member to eliminate the tracking requirement for items valued at less than $5.

Some members of the Committee expressed dismay that the CPSC was not asked to testify, because it would have been an opportunity for them to explain why they asked for the changes they did in their January 15 report to Congressional appropriators.

79 Congressmen Sign Letter Supporting FAAAA Amendment

Rep. Jerry Nadler’s (D-NY) letter to colleagues supporting the FAAAA Amendment was sent out yesterday to House Transportation and Infrastructure Committee (T&I) leadership.   Seventy-nine Democrats signed the letter, which advocates changing federal law to allow localities and ports to enact and enforce tougher clean truck programs. Click here to view the letter.

Environmental groups, labor unions, and community groups have thrown their support behind the effort. The letter was sent just before a May 5th hearing of the House T&I Committee to explore the Los Angeles program.

A trial is currently under way in U.S. District Court in Los Angeles concerning a suit filed by the American Trucking Associations (ATA). ATA is challenging the constitutionality of a portion of the port of Los Angeles clean truck program that would ban independent owner-operators from drayage services in favor of companies that sign concession agreements and hire drivers who are employees.

USA-ITA is working with the Clean and Sustainable Transportation Coalition which plans to send an industry letter in opposition to the FAAAA amendment.

Ways and Means Committee Chairman Sander M. Levin (D-MI) and Senate Finance Committee Chairman Max Baucus (D-MT), along with Ways and Means Ranking Member Dave Camp (R-MI), Finance Ranking Member Chuck Grassley (R-IA), and Rep. Charles B. Rangel (D-NY) introduced legislation today to help speed Haiti’s economic recovery following the devastating January earthquake.  The Haiti Economic Lift Program (HELP) Act, introduced in both the House and Senate today, expands duty-free access to the U.S. market for additional Haitian textile and apparel exports and extends existing trade preference programs for Haiti through 2020.

The HELP Act supports the USTR's Plus One for Haiti program by making it more cost effective for U.S. companies to import Haitian textiles and apparel. 

Key provisions in the bill include:

  • Extension of CBTPA and HOPE September 30, 2020
  • Expansion of the Wholly Assembled List to  provide duty-free treatment for additional textile and apparel products that are wholly assembled or knit-to-shape in Haiti regardless of the origin of the inputs.
  • Increases the TPLs from 70 million SMEs to 200 million SMEs. The increase will be triggered in any given year if 52 million SMEs of Haitian apparel enter the United States under the existing knit or woven TPL. Once the increase is triggered, certain knit apparel products entering duty-free under the knit TPL will be subject to an 85 million SME sublimit, and certain woven apparel products entering duty-free under the woven TPL will be subject to a 70 million SME sublimit.
  • Safeguards against transshipment by requiring CBP to verify that apparel articles imported under the TPLs are not being unlawfully transshipped into the United States. The bill also authorizes the President to reduce the TPLs to account for unlawful apparel transshipment.
  • Liberalizes the Earned Import Allowance Rule by permitting the duty-free importation of one SME of apparel wholly assembled or knit-to-shape in Haiti regardless of the origin of the inputs for every two SMEs of qualifying fabric purchased from the United States.
  • Extends until December 20, 2015, the rule that provides duty-free treatment for apparel wholly assembled or knit-to-shape in Haiti with at least 50 percent value from Haiti, the United States, a U.S. free trade agreement partner or preference program beneficiary, or a combination thereof. The bill similarly extends until December 20, 2017, duty-free treatment for Haitian apparel with at least 55 percent of value from qualifying countries, and until December 20, 2018, duty-free treatment for Haitian apparel with at least 60 percent of value from qualifying countries.
  • Authorizes funds for CBP to help Haiti meet its immediate customs infrastructure needs, and to maintain a U.S. customs team in Haiti.

In this TDM:

Customs, CPSC Sign Data Sharing Agreement

U.S. Customs and Border Protection (CBP) and the Consumer Product Safety Commission (CPSC) signed a memorandum of understanding today that will allow the CPSC to access commercial data filed at CBP and use it to conduct import safety risk assessments. The understanding is the result of the wave of product recalls in 2007 and 2008, which led Congress to beef up U.S. product safety rules and prompted calls for a closer working relationship between CPSC and CBP.

The understanding allows the CPSC to access data in CBP’s Import Safety Commercial Targeting and Analysis Center, which was established last October in an effort to bring together the various elements of the government charged with food and product safety. The CPSC already provides input into this program, as does the Food and Drug Administration and the U.S. Agriculture Department’s Food Safety Inspection Service.

A copy of the understanding has not been made available, but in a joint press release issued by the two agencies, CBP Commissioner Alan Bersin said the understanding will help the government “further protect consumers against the importation of dangerous goods into the U.S.” CPSC Chairwoman Inez Tenenbaum said the government will be able to reduce the flow of dangerous products to the U.S. by “identifying and checking consumer products at our ports.”

USTR Seeks Comments on Broadening Industry Trade Advisory Committees

Just months after excluding registered lobbyists from the federal advisory committee system, the U.S. Trade Representative’s Office and the U.S. Department of Commerce are jointly indicating an interest in expanding the scope of the Industry Trade Advisory Committees (ITACs), which offer industry advice on trade policy, to a broader group, opening the door to the possibility of labor or environmental viewpoints on the committees.

A Federal Register notice to be published tomorrow says ITAC membership historically has been limited to “industry stakeholders,” but that USTR and Commerce have received “multiple inquiries… regarding the appropriate viewpoints to be represented on the ITACs.” The agencies are seeking public comments on the “appropriate scope of viewpoints” in the ITACs, and have asked for written comments by May 25.

Witnesses at House Hearing on CPSIA Amendments Include An Apparel Importer

The hearing before the House Committee on Energy and Commerce's Subcommittee on Commerce, Trade and Consumer Protection on draft legislation to amend the Consumer Product Safety Improvement Act is still on track for Thursday morning. Although no official witness list has been issued, indications are that witnesses will include some vocal critics of the CPSIA and of the earlier drafts of legislation by Chairman Henry Waxman to amend the CPSIA.

Reportedly, witnesses will include Steve Levy of Star Ride Kids, an importer of children’s clothing and the President of The Coalition for Safe and Affordable Childrenswear, Inc., a group created in response to the CPSIA; Rick Woldenberg, Chairman, Learning Resources, and author of a blog on the CPSIA; Frederick Locker, counsel to the Toy Industry Association; and representatives of the Handmade Toy Alliance, Goodwill Industries, and the all-terrain vehicles industry.

Prepared by Brenda A. Jacobs and Pete Kasperowicz, Sidley Austin LLP

© Copyright 2010 USA-ITA, All rights reserved.

In this TDM:

CPSC Approves Proposed Notice of Rulemaking on Drawstrings

The Consumer Product Safety Commission this morning approved publication of a notice of proposed rulemaking to designate that children's upper body garments with drawstrings are a "substantial product hazard."   Such a designation would effectively turn what is currently a voluntary standard into a mandatory standard, and will permit the agency to refuse admission into the United States of non-compliant garments.

The action is being taken under section 15j of the Consumer Product Safety Act, as amended by the Consumer Product safety Improvement Act, which says that the Commission can  specify, by rule, for any consumer product or class of consumer products, characteristics whose existence or absence shall be deemed "a substantial product hazard" so long as:

  • the characteristics are readily observable
  • there is voluntary standard,
  • such standard has been effective at reducing the risk of injury, and
  • industry is in substantial compliance with such standard.

Under the proposed rule:

  • Drawstrings are not permitted at all at the neckline of garments sized 2T through 12. 
  • Drawstrings at the waistline are permitted in garments sized 2T through 16 only so long as they are not more than 3 inches in length and there are no toggles, knots, or other attachments at the free end. If the waist drawstring is one continuous string, it must be bartacked or sewn to the garment at the midpoint of the channel so that it cannot be pulled out of the channel. Fully retracting drawstrings are contained within the garment and are exempt.

The proposed rule also attempts to deal with sizing that is not numbered, such as size medium or extra large.  According to the proposed rule, a size medium or large will be considered a size 12 or 14 and therefore within the scope of both the neck and waist rules.  A size extra-large will be considered a size 16, within the scope of waist rule. 

The proposed rule would be effective 30 days after the final rule is issued.  A Federal Register setting out the proposed rule, and providing a comment period, is expected to be published soon.  A similar proposed rule was approved for hair dryers as well.

It should be noted that once designated as a substantial product hazard, drawstrings in children’s upper body garments will be subject to a reporting requirement and may be subject to a corrective action (in addition to non-compliant imports being refused admission).  The proposed rule expressly states that the standard does not preempt state requirements.

The Commission also was supposed to consider today proposed rules on testing and labeling and on testing of component parts, but postponed those two agenda items until its meeting on May 5.

Hearing on Prospective Versus Retrospective Application of Trade Remedies Gives No Hint of Administration Interest in Changing Rules

The Commerce Department (along with officials from the Departments of Treasury and Homeland Security) hosted a public hearing yesterday aimed at exploring the advantages and disadvantages of the current U.S. "retrospective" method of collecting antidumping and countervailing duties versus a "prospective" system. As was to be expected, and reprising the written comments filed last week,  testimony from the 19 witnesses was split between U.S. producers, who favored maintaining the current retrospective system, and the importer/retailer community, which favored a move to a prospective system.

It is not clear at all that Congress or the Administration are prepared to undertake the serious work needed to move to a prospective system.  Commerce Department officials offered no indication that they were doing anything other than fulfilling Congress's demand for an examination of these issues. Deputy Assistant Secretary of Commerce for Import Administration Ron Lorentzen, who led the hearing, expressly noted that questions asked by officials should not be seen as a sign that the government favors maintaining or changing the current system, but instead as attempts to probe the issue as presented by Congress.

Commerce officials did acknowledge that it is difficult to compare a retrospective system with a prospective system because there is no detailed proposal for what a prospective system might look like. This was a problem throughout the hearing, as the lack of detail allowed witnesses to talk past each other when debating the pros and cons of each system.

The government panel asked witnesses several times about how the government's burden might increase or decrease if the U.S. amended its trade remedy system, and seemed curious about whether litigation involving administrative reviews and increased requests for refunds under a prospective system might equal the legal battles that now occur under the retrospective system. As expected, each group speculated that their preferred system would lead to a reduced administrative burden for the government.

Chairman Waxman Issues Briefing Memo and Witness List for CPSIA Hearing

House Energy & Commerce Committee Chairman Henry Waxman is circulating a briefing memo to committee members in anticipation of a hearing tomorrow morning, identifying the goals of his yet to be introduced legislation to amend the Consumer Product Safety Improvement Act and identifying the witnesses who will testify.  A copy of that memorandum is available here.

Prepared by Brenda A. Jacobs

In this TDM:
  • Customs Nominates Sandra Bell for World Customs Organization
  • U.S.-China Business Council Says U.S. Exports To China Steady
  • China Imposes Anti-Dumping Duties on Nylon 6

Customs Nominates Sandra Bell for World Customs Organization

On April 23, 2010, U.S. Customs and Border Protection announced the nomination of Sandra Bell to serve as Director, Compliance and Facilitation for the World Customs Organization (WCO).  Bell currently serves as Executive Director for Regulations and Rulings in the Customs Office of International Trade. 

U.S.-China Business Council Report Says U.S. Exports To China Steady

On April 21, 2010, the U.S.-China Business Council (USCBC) released the report,

U.S. Exports to by State: 2000-09.  According to the USCBC, U.S. exports to China in 2009 remained at 2008 levels, even though exports to the rest of the world declined by approximately twenty percent.  In fact, close to half of U.S. states increased exports to China during 2009.  USCBC says quarterly U.S. exports to China set a new record of $20 billion during the fourth quarter of 2009.  China is the third largest market for U.S. products after North American Free Trade Agreement (NAFTA) partners Canada and Mexico. 

USCBC says the top U.S. products shipped to China are computers, electronics, and components; agricultural products; chemicals; and transportation equipment.  Maine is the only state that lists textiles and fabrics as one of the top five exports. 

China Imposes Anti-Dumping Duties on Nylon 6

On April 22, 2010, China's Ministry of Commerce (MOFCOM) announced the final determination in the anti-dumping investigation on imports of Nylon 6 from the United States, the European Union, Taiwan, and Russia.  MOFCOM previously announced the preliminary dumping rates in October 2009.  Final rates range from 4 percent to 96.5 percent.  Nylon 6 [polycaprolactam] is used to manufacture hosiery, threads, and knit apparel, as well as filaments, tire cords, and nets.