Yarn Makers Fear DR-CAFTA Ruling
By James A. Morrissey, Washington Correspondent
US yarn spinners are concerned that a recently announced US Department of Commerce (DOC) ruling will endanger the yarn-forward rule of origin in the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). The controversy arises from the use of compacted yarn manufactured primarily in Asia and the ring-spun yarns made in the United States.
Under the Commercial Availability Provision of DR-CAFTA, inputs from nonparticipating countries can be used in apparel if it is determined that fabrics, yarn or fibers are not available in commercial quantities in a timely manner in the United States. The procedures announced by the DOC establish criteria for requests, responses and rebuttal information with respect to short supply.
Members of the Washington-based National Council of Textile Organizations (NCTO) are not at all happy with the regulations, charging that they will open the door to Asian yarns when comparable products are available in the United States. NCTO President Cass Johnson says the decision lacks sound judgment, objectivity, and is in defiance of the evidence presented for review by US yarn spinners.
The ruling stems from a case brought by eight major US yarn producers who contend compacted yarns from Asia should not be eligible for duty-free treatment under DR-CAFTA. On March 14, the DOC ruled against the yarn spinners petition. Johnson contends that by doing so, the DOC has set a precedent that threatens a significant provision in the DR-CAFTA, adding that this has troubling implications.
March 1, 2006