Fashion Intel & Analysis

USA-ITA last week filed comments opposing a proposed revocation by U.S. Customs and Border Protection of a ruling that a cotton pullover made in Singapore from U.S. originating yarn and fabric qualifies for duty-free treatment under the U.S.-Singapore Free Trade Agreement. As reported in the September Customs Overview, CBP proposed revoking the ruling because the pocket fabric, which is also cotton, is not originating. USA-ITA’s comments explain that the original ruling reached the correct conclusion by focusing on the pullover shell, the component providing the essential character of the pullover, without regard to other components such as pockets. For a copy of the USA-ITA comments, contact USA-ITA.

            Certain cotton/polyester three thread circular knit fleece fabrics have been deemed to unavailable in commercial quantities in the CAFTA-DR countries, and as of today these fabrics from non-CAFTA DR countries can be used to make apparel that qualifies for trade benefits under the agreement.

 

            The Committee for the Implementation of Textile Agreements formally added these fabrics today to the DR-CAFTA short supply list. Two of the fabrics are classified under HTSUS subheading 6001.21; two grades of fabric are included, one with a 67-73% cotton content and the rest polyester, and another with a 77-83% cotton content. The request was made on behalf of Intradeco Apparel Inc. The third fabric, a cotton/nylon/spandex raschel knit open work crepe fabric, is classified under HTSUS subheadings 6005.22.00 and 6005.24.00. This request was from Hansae Co. LTD.

            U.S. Trade Representative Ron Kirk has chosen Gail Strickler as the Assistant USTR for Textiles, giving the position last known as “special textile negotiator” a new title.  As an Assistant USTR, Strickler will be at the same level as all of the other assistant USTRs, rather than at a level between a Deputy USTR and an Assistant USTR.

 

            Strickler is no stranger to textile issues.  She was on the board of the National Council of Textile Organizations for five years, and was previously vice president of the global apparel division for Duro Textile LLC of Massachusetts. In 2007, Duro bought Saxon Textile Corp., a company that Strickler worked at for 26 years, during which she became president and CEO.  She was on the USDA’s Cotton Board since 2002.

 

            Strickler was also associate director for the Institute for Textiles and Apparel Product Safety at Philadelphia University’s College of Textiles and Sciences, and was president of the Textiles Distributors Association for five years.

 

            In a press statement, Kirk said that he wants Strickler to help USTR and textile companies “adapt to a trade environment that has undergone significant changes in the recent past,” and explore “new market opportunities.” She also will have responsibility for “supervising negotiations affecting textiles and apparel.”

 

            The position, while political, does not require any Senate confirmation. 

 

            The United States, European Union, Mauritius and Sri Lanka last week asked the World Trade Organization to circulate a revised proposal for a special “Understanding” under the WTO’s Agreement on Technical Barriers to Trade (TBT Agreement) on labeling rules for textiles, clothing, footwear, and travel goods. U.S. officials have said the proposal is aimed at helping U.S. companies avoid technical barriers to trade and require WTO members to provide advance notice when new labeling rules are being proposed.

 

            USA-ITA has previously indicated to U.S. officials and others some skepticism for the need to establish “special” rules for textile and apparel products – but not for other consumer goods -- particularly now that textiles and apparel have been integrated into normal WTO rules.

 

            The newly circulated version of the proposal contains one noticeable change from prior versions, which may be in response to USA-ITA criticism:  It no longer identifies which products would be covered by the labeling clarification through a citation to the annex to the now expired Agreement on Textiles and Clothing.  USA-ITA had expressly advised U.S. government officials that it is inappropriate to cite to the expired agreement.  Nevertheless, the proposal still covers only labeling for silk, wool, cotton and other vegetable fibers; safety headgear; rubber, plastic, fur skin and other headgear; headgear components; footwear; and multiple categories of travel goods.

 

            U.S. officials have suggested that the Understanding is aimed at getting other countries, where U.S. brands may be sold, to not use labeling rules as a disguised trade barrier.  Under the proposal, textile labels requiring fiber content, country of origin and care instructions would be presumed to be not more trade restrictive than necessary. In contrast, rules that prohibit the use of more than one language on a label, require pre-approval of a label, prohibit non-required information on a label, or require that a label be made of a certain fabric would be presumed to be more trade restrictive than necessary. The Understanding also would specify that WTO members must give advance notice and set up a comment period when labeling changes are made, which U.S. officials say is a way of getting other governments to adopt U.S.-style administrative procedures.

 

           

As a practical matter, the TBT Agreement already requires advance notice for changes in rules (for all goods, not just those covered by the proposed Understanding), and already gives WTO members the right to challenge labeling rules that are more trade restrictive than necessary. And while U.S. officials have said the clarification would explicitly require that advance notice reach “interested parties,” it would not create any new rights under the WTO for the private sector, because the WTO is forum for government-to-government challenges.

 

            The U.S. and EU, along with Mauritius and Sri Lanka, are seeking to include this proposal in the Non-Agricultural Market Access (NAMA) talks in the ongoing Doha round.

 

 

            USA-ITA filed comments today with the U.S. Trade Representative’s office on two of the three pending free trade agreements, the U.S.-Colombia Trade Promotion Agreement and the Korea-U.S. Free Trade Agreement.  USTR had requested public comment on whether there has been progress in Colombia on protection of worker rights and on whether the Korea agreement, often referred to as KORUS, promotes the negotiating objectives set out in the Bipartisan Trade Promotion Act and the May 10, 2007 Congressional-Executive Agreement on Trade Policy (the so-called “May 10 Agreement”).

 

            In its comments, the association expressed its support for both free trade agreements and cited how the agreements meet each U.S. objectives as well as how the agreements could have included terms that would have encouraged even more business.  For a copy of USA-ITA’s comments, contact USA-ITA.