On December 4th the National Textile Association filed public comments with the Senate Finance Committee in opposition to 24 duty suspension or related bills that were being considered for inclusion in a Miscellaneous Tariff Bill.
In the case of the bill S.1981 to provide for the liquidation or reliquidation, at the rate of zero percent, of certain line items in entries of tailored garments from Costa Rica. NTA objected because the bill seeks duty relief on the entry of these garments due to the fact that they did not qualify for tariff free treatment under the terms of CAFTA. These products were obviously denied CAFTA duty preferences because they are made from fabrics that were formed outside of the CAFTA region. There are major U.S manufacturers of the very fabrics that are used in these types of garments. Production facilities for these fabrics are located in a number of states including Connecticut, North Carolina and Oregon. If the U.S. government provides duty rebates for garments made in Costa Rica from fabrics formed outside of the CAFTA region, these U.S. manufacturers and their workers will suffer.
The CAFTA is very specific in that it requires garments of this type to be constructed of fabrics that were either formed in the United States or in one of the other CAFTA countries. This requirement is critical to U.S. and Central American fabric makers. The elimination of this fabric requirement would severely undermine any potential benefits for fabric producers in this region. Instead passage of the bill would allow for fabric to be manufactured in China or India, shipped to Central America for simple assembly and then exported duty free to the United States.
In addition, we believe that S.1981 violates the basic prerequisites for consideration under the MTB process. The bill seeks to eliminate tariffs on entries from Costa Rica retroactively. Finance committee guidelines for the MTB process prohibit such bills. Moreover, while the bill did not provide duty payment data for entries listed in the bill, we assume that the monetary loss to the U.S. Treasury would far exceed the normal $500,000 benchmark established for bills under the miscellaneous tariff process.
For three bills -- S.2053 duty suspension relating to women's sports bras of stretch fabric with textile or polymer-based electrodes knit into or attached to the fabric and that incorporate connectors designed to secure an electronic transmitter that transmits physiological information from the electrodes to a compatible monitor, S.2054 relating to knit tank tops of stretch fabric with textile or polymer-based electrodes knit into or attached to the fabric and that incorporate connectors designed to secure an electronic transmitter that transmits physiological information from the electrodes to a compatible monitor, and S.2058 duty suspension relating to knit garments of stretch fabric with textile or polymer-based electrodes knit into or attached to the fabric and that incorporate connectors designed to secure an electronic transmitter that transmits physiological information from the electrodes to a compatible monitor -- NTA objected bacause these products are made of fabric of the type manufactured in the United States by member companies of NTA who would be harmed by this duty suspension. Further, a significant portion of the domestic U.S. production of this fabric is for export to our preference or free trade partners for assembly and re-importation, with the result that this bill would likely weaken our existing regional preference and free trade arrangements.
In the case of the three bills -- S.2358 relating to certain warp knit open-work fabric, S.2360 Nonwoven fabric consisting of two layers of needleloom felt, the fabric weighing less than 250 g/m2, of a thickness not exceeding 3.7 mm, of a blend of all of the following staple fibers each with filament decitex measuring 3.5 or less: fire retardant rayon staple fibers, fire retardant modacrylic staple fibers, fire retardant para-aramid staple fibers and polyester staple fibers, and S.2516 Nonwoven air filter and diffusion media having layers of fine denier polyester fibers (2 to 10 decitex, with a length of 40 mm or more, but not more than 80 mm), weighing 400 to 700 g/m2, thermally bonded and impregnated in full depth with an adhesive coating, reinforced on one side with a supporting woven open-mesh scrim, used in downdraft spray cabins for painting applications where the media is required both as an air filter and as an air diffuser, providing uniform, nonturbulent air flow -- NTA objected bacause the fabrics are the same, or competitive with, fabrics made in the U.S. by NTA member companies.
In the case of 17 bills -- S.2578, S.2579, S.2580, S.2581, S.2582, S.2583, S.2584, S.2585, S.2586, S.2587, S.2588, S.2589, S.2590, S.2591, S.2592, S.2593, S.2602 all relating to knit-to-spape garments -- NTA objected bacause:
1. The subject garments are made of yarn of the type made in the U.S. and which may be exported for use in production of such garments in our trade preference or free trade partners, so that this bill could erode our current preference and free trade programs.
2. Such duty reduction will exert downward price pressure on competing products made in the U.S., which will harm the already weakened U.S. textile and apparel industries.
3. We also oppose because it has always been our understanding that the Miscellaneous Tariff Bill was intended to promote U.S. manufacturing by providing limited tariff relief (up to $500,000 for any specific tariff line) to domestic U.S. manufacturers who use inputs that are not available from a domestic source, not as a vehicle to swell the profit margins of importers and retailers of finished goods to the discouragement of domestic manufacturing.
4. Further we note that the U.S. is currently, in the Doha Round of World Trade Organization talks, negotiating reductions in textile and apparel duties in exchange for certain trade liberalization with regard to other goods and services on the part of our trading partners, in that context it makes no sense to unilaterally give up a tariff with no compensation from our trading partners.
