United States Invokes Safeguards On Honduran Sock Imports

James A. Morrissey, Washington Correspondent

In a move that was sharply criticized by importers of textiles and apparel, the US Department of Commerce (DOC) has invoked a safeguard mechanism on imports of cotton socks from Honduras. The move will permit the United States to place a 5-percent tariff from now until the end of this year. The safeguard tariffs will expire at the same time as the current quota on Chinese cotton socks.

Commerce Assistant Secretary of Textiles and Apparel Matt Priest said the action will give US manufacturers time to adjust to increased import competition from its Central American trading partners that participate in the Central America-Dominican Republic Free Trade Agreement. Priest said US manufacturers have a long history of coproduction with Honduras, and that approximately half of the socks imported from Honduras were knit in the United States prior to finishing and packaging in Honduras. Honduras is the second-largest supplier of socks to the United States, behind Pakistan but ahead of China.

Laura Jones, executive director of the US Association of Importers of Textiles and Apparel, blasted the DOC’s action, saying it will do nothing to help US textile manufacturers. “Safeguards are a dangerous mechanism, especially in these regional arrangements,” Jones said. “It is tantamount to shooting yourself in the foot, especially when the US is the one supplying the yarns used to make the targeted products.” She said Honduran manufacturers are not threatening the United States and that Pakistan and China are the “real winners.”

She warned that importers of textiles and apparel need “certainty” in their sourcing, and that actions such as safeguards in connection with a regional FTA could encourage importers to seek products elsewhere in countries that would not use US yarn.

May 6, 2008