Fashion Intel & Analysis
There are yet more instances in which apparel companies and retailers are being subjected to civil penalties for making and distributing children’s upper body garments with drawstrings that pose a choking risk.
One company has agreed to pay a $100,000 penalty for selling sweatshirts with drawstrings from 2003 to 2008. The sweatshirts were recalled earlier this year. In addition, one retailer agreed to pay a $425,000 settlement for failing to report the sale of children’s drawstring sweatshirts, and two others agreed to pay a total of $85,000 in civil penalties for selling children’s sweatshirts and jackets with drawstrings that do not comply with CPSC rules.
The Committee for the Implementation of Textile Agreements (CITA) has concluded that certain woven modal-polyester apparel fabric is not available in commercial quantities in CAFTA-DR countries. This decision means goods made with such third country fabric can still qualify for trade preferences under CAFTA-DR. The decision, in favor of BWA, applies to fabric under HTSUS subheadings 5516.12, 5516.13, 5516.22, and 5516.23.
The Government of Brazil earlier this week was told by a WTO arbitration panel that it has the right to retaliate against hundreds of millions of dollars worth of U.S. exports due to the inability of the U.S. implement an earlier WTO ruling against U.S. cotton subsidies. But this complex case, which appears likely to continue to evolve, appears unlikely to affect companies doing business in the
The WTO panel said
Specifically, the Step 2 program that was found to violate WTO rules in 2005 paid U.S. textile mills for using U.S. cotton, and the payment was the difference between the U.S. and world price. The new system offers a much smaller payment to textile mills for using cotton, regardless of origin.
Taken together, these changes have already had a transformative effect on the
Further debate on whether and how
The White House is widely expected to offer relief to the USW on or before September 17, as the pressure to help a key labor constituency at a time of economic turmoil and slow, uncertain recovery – even though no U.S. tire producers have expressed support for relief and two small U.S. companies with U.S. production have expressly come out against relief.
But President Obama is likely to be wary of the need not to undermine the
Regardless of the remedy, any remedy decision by President Obama can be expected to be seen as a signal that the Section 421 door has finally been opened, after the Bush administration had kept it shut. In addition, any remedy provided in the tire case sends a signal that safeguards are possible even when only labor applies for them, since the tire case was brought by USW and has had no public support from any
Assuming that President Obama provides some form of relief in the tires case, over the next year other petitions are likely by similarly small, budget-challenged companies and industries. As a general rule, Section 421 has been used by small producers, including single entities that
account for virtually all
provided under Section 421 is also more fleeting, limited to a maximum of three years, while the antidumping and countervailing duty laws provide many years of relief – and uncertainty – for foreign producers and U.S. importers. A company or industry with the financial wherewithal would almost certainly choose the more “permanent” relief provided by an antidumping and/or countervailing duty order.
As a result, it is not surprising that
Apparel importers and producers alike should be taking steps now to make sure they are prepared to act quickly in the event that an apparel 421 petition is filed – particularly because these cases move on a highly expedited schedule. The entire investigation, from the filing of the petition to the date the President announces his decision on remedy, assuming that the USITC finds market disruption, is 150 days long. As a result, once a petition is filed, the USITC can be expected to issue questionnaires to manufacturers, importers and purchasers within three days, with the questionnaire responses due just 14 days later. Those questionnaires, which are very similar to the questionnaires used by the USITC in antidumping and countervailing duty cases (even though safeguard investigations do not involve allegations of unfair trade) would ask for data going back five years. (Copies of the questionnaires issued in prior 421 investigations are available upon request.) Generally, the time line for the USITC part of a 421 investigation is as follows:
Day 1 Petition filed
Day 3 Questionnaires issued
Day 17 Questionnaire responses due
Day 35 Deadline for filing requests to appear at public hearing
Day 37 Deadline for filing pre-hearing briefs
Day 40 Hearing is held
Day 45 Deadline for filing post-hearing briefs
Day 56 Commission votes on market disruption
Day 62 Comments due on remedy
Day 76 USITC Report to the President and USTR on remedy recommendation
President Obama yesterday nominated Michael Punke as Deputy U.S. Trade Representative in
Punke also previously served as international trade counsel to Senator Max Baucus (D-MT), now the Senate Finance Committee Chairman, from 1991 to 1992. After leaving government in the 1990s, Punke worked at a