TRADE BILL OK'D, GOES TO BUSH

WASHINGTON -- A trade bill with duty-free apparel breaks and a renewal of the President's trade promotion authority cleared Congress Thursday after Senate passage.

The Senate voted 64-34 to send President Bush the controversial measure, with apparel provisions for Andean, Caribbean Basin and sub-Saharan Africa. Bush has said he's anxious to sign the bill, which he argues will give the economy a lift. With TPA, he maintains the U.S. will more readily be able to negotiate agreements opening foreign markets to American exports.

However, the measure is being decried by domestic fabric makers as a job-loser, in part because its U.S. fabric provisions will be wiped out by new and increased allowances for regionally produced fabric content. For their part, retailers and importers applauded final passage because the bill will expand garment sourcing opportunities in the Western Hemisphere and sub-Saharan Africa.

As reported, the House early Saturday narrowly passed the bill, voting 215-212.

"Our member companies look forward to expanding their production in the Andean region," said Julia Hughes, vice president of international trade with the U.S. Association of Importers of Textiles & Apparel.

On the other hand, Jock Nash, Washington trade counsel for textile maker Milliken & Co., called the bill "ruinous" for the flagging domestic textile industry, as well as apparel manufacturers. Nash faulted the lack of unity among House textile-state lawmakers whose votes could have derailed the bill. Several GOP lawmakers from textile producing districts voted for the measure at the urging of Bush.

Yarn spinners broke from fabric makers in supporting the bill because of breaks specific to them. Mike Hubbard, executive director of the American Yarn Spinners Association, said: "There are a lot of provisions in this bill that will allow for opportunities for U.S. yarn in the Caribbean."
He expects U.S. yarn sales to climb for use in fabric for T-shirts. Current duty-free limits for T-shirts in the region have almost been reached this year and the legislation would raise the quota.

The bill's key apparel provisions would:
 - Eliminate duties on apparel produced in the Andean countries of Colombia, Bolivia, Ecuador and Peru, if U.S. or regional textiles are used. However, shipments are limited, starting at 2 percent growth over existing trade and increasing to 5 percent in 2006 when the breaks must be renewed. The region now ships less than 1 percent of all imported apparel.
 

- Increase existing duty-free apparel benefits for the Caribbean and Central America covering T-shirts and knit shirts made of regional fabric using U.S. yarn, also subject to limits. For sub-Saharan Africa, current duty-free provisions for garments made of regional fabric also were enhanced.
 

- Allow knit-to-shape garments produced in sub-Saharan Africa and merino wool sweaters to enter the U.S. duty-free, a clarification of a 2000 trade bill.
Senate passage of the bill wasn't in doubt, after the House and Senate last week reconciled differences in legislation.
 

The Democrat-controlled Senate got what it wanted most in the deal: an expanded federal assistance program for workers laid off due to import competition that for the first time includes a health insurance subsidy and covers factory suppliers, including contractors.
 

The Republican-controlled House pressed for Andean, Caribbean Basin and African and sub-Saharan apparel breaks close to the chamber's original bill.
 

The centerpiece of the legislation was renewal of TPA, which expired in 1994. Often called fast-track, the authority keeps Congress from amending negotiated trade deals, which is seen as giving foreign trading partners confidence that agreements won't be undone. Renewal of the authority has been elusive because of calls among a bloc of Democrats that labor and environmental provisions should be part of trade negotiations.
 

Lawmakers in both chambers rushed to complete work on the trade bill before their August recess. They were also anxious to put some distance between their vote and November's elections, fearing voter backlash due to concerns over the negative impact of increased trade on import-sensitive manufacturing sectors, such as textiles and apparel.
 

By Joanna Ramey. Article date: Aug. 2, 2002.

Copyright © 2002 Fairchild Publications, Inc.

This article is reprinted from WWD for classroom use only.