Trade Politics Do Affect You!

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I realize that trade politics do not always make compelling reading. However, considering how much international trade affects our economic well-being, it is mind-boggling to see the lack of attention by importers and exporters regarding trade politics that could cause the loss of their businesses!

True, most of the information is disseminated in a manner that only lawyers can understand, and it is available only on bureaucratic and legislative government entity websites.

We are at one of the most critical moments in the textile/apparel industry, which will change both export and import revenues. The plan to continue and add more Free Trade Agreements (FTA's) is the bold agenda of this administration. The new appointment of US Trade Representative (USTR) Chairman, Mr. Rob Portman, is a clear message that FTA's are going full speed ahead.

We are in the textile/apparel industry, but you must understand that problems in the agricultural, biotech, electronic, transportation and other major industries will all have dramatic effects on the textile/apparel sector.

We have two major areas to be EXTREMELY concerned about:

1.      Serious trade friction exists between the USA and the European Union (EU) as each charges the other with subsidizing cotton production, aircraft manufacturing, and the Byrd amendment, all in violation of the WTO rules. Therefore, if you are an exporter of US apparel to these countries, be prepared for more penalty tariff restrictions put onto your products.

2.      China and the safeguards initiating QUOTAS and anti-dumping regulations that will be submitted prior to the end of this year are critical. I am writing this article in early May, and a lot of faster moving information will pass after this article is published.

A notice was published in the Federal Register on May 9, 2005, announcing that the Committee for the Implementation of Trade Agreements (CITA) will resume consideration of threat-based safeguard petitions filed in 2004, which had previously been blocked by the Court of International Trade (CIT) on December 30, 2004. This could lead to the swift imposition of safeguard quotas. I am betting that by the time this article is published, some of the following categories will have been already have established quotas:

         Cat.338/339 (cotton knit shirts and blouses) **

         Cat. 340/640 (men's and boys
cotton & man-made fiber shirts, not knit)

         Cat. 347/348 (cotton trousers)**

         Cat. 638/639 (man-made fiber knit shirts and blouses)

         Cat. 647/648 (man-made fiber trousers

         Cat.  352/652 (cotton and man-made fiber underwear)**

         Cat. 301 (combed cotton yarn).

The Federal Register notice will also cover other categories not mentioned above.

The California Fashion Association (CFA) will have already hosted an open meeting on May 17, 2005, discussing the China safeguard issues. If I were an apparel manufacturer or an importer and not a member of the CFA, I would investigate the services that this California organization provides to our industry and become a member.  Call them at (213) 688-6288.

I have been on speaking engagements, participated in seminars and panel discussions, and have been invited by my clients and other financial groups to cover the above topics since October of 2004.  Attendees at these events who listened, evaluated their risk factors and took ACTION can rest a lot easier. To those who said it would not really happen, I say,
Good Luck!!

The Textile/apparel Consulting Group at Stonefield Josephson has over 100 years of experience.  Sourcing, logistics, Free Trade Agreements, US Customs regulations, offshore rules and Do's and Don'ts, are just some of the services we offer to our clients.

Know the risk factors and make plans to overcome them. We have the information that can help your business grow and stay profitable.

** CITA announced on Friday, May 13 that safeguards on these categories will be imposed before the end of May.
 

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