Fashion Intel & Analysis

The Consumer Product Safety Commission (CPSC) on November 9 indicated that it may decide to extend a stay of enforcement for some products under the Consumer Product Safety Improvement Act of 2008 (CPSIA) beyond February 10, 2010, which marks the end of the one-year duration of the stay. In a public hearing, CPSC Chairwoman Inez Tenenbaum stressed that the commission will have to vote affirmatively to lift the stay, and indicated that a partial lifting of the stay might be an option.

The question of how the CPSC will proceed in February came up as the commission discussed a proposed guidance document that is meant to explain what is required under the CPSIA, which prohibits lead in children’s products that could be absorbed by children and requires children’s products to be tested for lead by accredited third-party testers. The document is titled “Guidance
Document: Testing and Certification Requirements under the Consumer Product Safety Improvement Act of 2008,” and was released on November 3. (It can be found at: http://www.cpsc.gov/library/foia/foia10/brief/102testing.pdf).

During the discussion of the document, Commissioner Anne Northup said it implies that once the stay is lifted in February, third-party testing would be required for all children’s products if the CPSC has accredited relevant labs, and if not, manufacturers would have to issue a general conformity certificate (GCC), and then get products tested by third parties once labs are accepted by CPSC. However, a CPSC lawyer and Tenenbaum entered into a discussion in which they agreed that a way around this problem would be to only lift the stay of enforcement on goods for which accredited labs have been named.

USA-ITA members should closely review the draft guidance, which the Commission is expected to approve for publication in the Federal Register as part of a request for public comment. The draft guidance appears to be a step forward, indicating that some of the most nagging questions could soon be resolved.  Among the key points included is an indication that a manufacturer can rely on supplier based, third-party testing for components.  That would mean that inputs suppliers can test components for compliance to the relevant standards before these components are incorporated into the final product; the product manufacturer does not need to retest these components.  However, the manufacturer would still be responsible for issuing a General Conformity Certificate and there can be no material changes between the component used in the test and the component in the final product .

The Guidance Document also defines a reasonable testing program as: “one that demonstrates with reasonable certainty that all consumer products certified to comply with the applicable standards will meet all the requirements of those standards.”  Reasonable testing programs do not need to be carried out by accredited third-party testing facilities.  The CPSC presented five essential elements for a reasonable testing program:

1) Product specifications describing the product and the applicable standards,
2) Certification tests performed on samples of the products demonstrating that the product is capable of passing the applicable standards,
3) A production testing plan describing the tests that must be performed and at what intervals,
4) Remedial action plans in case a sample produces a failing test result, and
5) Documentation of the reasonable testing program and how it is implemented.

Senate Finance Committee Chairman Max Baucus (D-MT) today said Congress would “probably” approve simple extensions of the Andean Trade Preferences Act (ATPA) and the Generalized System of Preferences this year, since there is little time to do anything more substantive before they expire on December 31. Some industry groups have pressed to exclude Ecuador from ATPA, but while Baucus said this is a “sticky” and “difficult” question, he said Ecuador would “probably” be included in a short extension of the program.

Baucus today also predicted passage of a miscellaneous tariff bill, which would help extend temporary tariff cuts that would otherwise expire this year and would likely include additional tariff cuts. Baucus predicted a short-term extension that would give Congress time to consider changes to these programs in 2010.

But more broadly, Baucus said he supports a trade agenda that raises labor and environmental standards and stresses trade enforcement. He also gave little reason for comfort on pending free trade agreements with Korea, Panama and Colombia, saying only that the well-known obstacles facing these agreements remain unresolved.
Congress Ready to Consider Trade Preference Programs

With the GSP program and Andean preferences scheduled to expire in a few weeks, the U.S. Congress is ready to begin consideration of the options for the future. The House Ways and Means Committee Trade Subcommittee has scheduled a hearing for November 17th, followed by a hearing before the Senate Finance Committee on November 19th. These hearings will provide an opportunity for discussion about the various proposals to revise the requirements for the many trade preference programs already in place. Behind-the-scenes meetings between NGOs and the business community continue, but it has been difficult to develop a consensus position.

During a public event earlier today, Senate Finance Committee Chairman Max Baucus (D-MT) said he is confident that GSP and the Andean program will be extended before the end of the year. He expects there will be a short-term extension, although longer than six months.
The Brazilian Government on Monday issued a preliminary list of U.S. products that could be subject to tariff increases as retaliation against the U.S. in the World Trade Organization dispute over cotton subsidies. An unofficial translation of Brazil’s list cites 72 different tariff provisions covering textile goods, including cotton, fabrics, yarns dyed goods, wadding and synthetic fibers.
Brazil could seek WTO authorization to retaliate as early as next week, but could also decide to delay this depending on whether the U.S. can takes steps Brazil sees as necessary to come into compliance with an adverse WTO decision on cotton subsidies. Brazil gave its domestic industry until November 30 to comment on the proposed list.

Below are the apparel and home furnishing products included on Brazil’s list:

61012000 Of cotton men’s and boys’ knit overcoats
61022000 Of cotton women’s and girls’ knit overcoats
61043200 Of cotton suit type jackets knit women’s and girls’
61044200 Of cotton knit dresses
61046200 Of cotton women’s and girls’ knit trousers
61061000 Of cotton women’s and girls’ knit shirts and blouses
61091000 Of cotton knit shirts
61102000 Of cotton sweaters
61112000 Of cotton babies’ knit garments
61159500 Of cotton hosiery
61161000 Gloves impregnated, coated or covered with plastics or rubber
61169200 Of cotton gloves
62034200 Of cotton men’s and boys’ woven trousers
62044200 Of cotton dresses
62046200 Of cotton women’s and girls’ woven trousers
62052000 Of cotton men’s and boys’ woven shirts
62063000 Of cotton seeds women’s and girls’ woven shirts
62079100 Of cotton seeds nightwear, robes
62132000 Of cotton handkerchiefs
63022100 Of cotton bed linen
63023100 Of cotton bed linen
63039200 Of synthetic fibres curtains
63079010 Of nonwovens other
63079090 Others

Some importers are reporting that they have received multiple ballots from the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS), for the proposed amendment to the Cotton Research and Promotion Order.  That is a good thing. Multiple ballots are being sent because there is a ballot for each Importer of Record of a cotton-containing product for which the cotton fee was assessed.  If your company has multiple IORs, each IOR is entitled to vote and should take advantage of that opportunity. 

 

A ballot should be submitted for each importer of record number, along with a corresponding 7501 for a calendar year 2008 entry of a cotton-containing product for which the cotton fee was assessed. 

 

According to AMS, the referendum will be decided by a majority vote, not allocated by the amount of cotton produced or imported by each voter.    That makes it extremely important that importers take advantage of every opportunity they have to vote.

 

The vote is to decide whether to implement the proposed amendment to the Order to give each of the small cotton producing states of Kansas, Virginia and Florida their own producer seats and votes on the Cotton Board, in place of their current treatment as a combined producer seat on the Board. 

 

USA-ITA recommends that importers vote NO on the ballot, because approval of the amendment would only further dilute the value of importers’ representation on the Cotton Board.

 

Signed ballots, accompanied by the required 7501, must be received by AMS by November 10, 2009.  USA-ITA member companies are strongly urged to mail their completed ballots and 7501s early. 

 

            If you have questions or need help, please contact USA-ITA.