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Textile News
James A. Morrissey, Washington Correspondent

Textile Manufacturers To Seek Countervailing Duties Against Chinese Imports

By James A. Morrissey, Washington Correspondent

US textile manufacturers plan to take advantage of a new government policy to consider using countervailing duties (CVDs) against illegally subsidized goods from nonmarket economies. At the annual meeting of the National Council of Textile Organizations (NCTO) in Washington April 24, NCTO Chairman Smyth McKissick, Alice Manufacturing Co., told Textile World his organization “definitely” sees the CVD policy as another tool in the industry’s efforts to combat a flood of imports from China.

In a major reversal of policy, the US Department of Commerce on March 30 announced that it would, for the first time, use the CVD anti-subsidy law against China. While the case involves a manufacturer of coated paper products, David Spooner, assistant secretary of commerce for import administration, said applications covering imports of other commodities could be considered. US antidumping and countervailing duty laws are recognized by the World Trade Organization.

Although CVD cases generally are complicated and time-consuming, NCTO believes they are worth pursuing because it believes Chinese textile and apparel products are heavily subsidized and are costing the US industry thousands of jobs. While anti-dumping laws provide another avenue of relief, the government has held that US textile manufacturers have no standing in cases involving apparel. Since the US apparel industry has shrunk so much, there has been very little activity on that front.

In an address to the NCTO members attending the annual meeting, McKissick put high priority on legislation that would levy punitive tariffs on goods from countries that manipulate their currencies to gain advantage in international trade. NCTO is pushing the Fair Currency Act of 2007 that would define “exchange rate manipulation” as a prohibited export subsidy and permit use of the CVD law to seek relief from injury caused by imports that benefit from the subsidy offsetting any advantage.

In citing “progress” in dealing with trade issues, McKissick told NCTO members that free trade agreements (FTAs) recently negotiated with Peru, Colombia and Panama have the “very best rule of origin we have ever had.” He said they have a yarn-forward rule with no tariff preference level that would allow non-participating countries to benefit from the agreements, and they call for strong Customs enforcement. He also gave general praise to the South Korea FTA, although details have not yet been released. One area of possible concern is that 61 percent of textile and apparel tariffs will be eliminated immediately upon enactment of the agreement, and textile manufacturers are uneasy about which products will by duty free and which ones will continue to have tariff protection.

McKissick also was bullish on the FTA with Vietnam because of the government’s monitoring program and a commitment to self-initiate anti-dumping actions if it determined that Vietnam textiles or apparel are being dumped on the US market at unfair prices.

As the meeting concluded, the textile executives headed for Capitol Hill to shore up their relations with members of Congress. McKissick said this is a continuation of a number of activities, which underscore the fact that “our industry is being heard, and we are able to influence policies that help shape our industry and the ways we do business.”

April 24, 2007