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Washington Outlook Archive
James A. Morrissey, Washington Correspondent

Administration Moving Forward With Free Trade Pacts

James A. Morrissey, Washington Correspondent

E mboldened by strong congressional support for the recently negotiated free trade agreements with Singapore and Chile, the Bush administration is moving forward with negotiations on no less than six additional free trade agreements. Both houses of Congress approved the Chilean and Singaporean agreements by one-sided bipartisan votes.

Following the congressional approval, US Trade Representative (USTR) Robert B. Zoellick said he saw this as an endorsement of the administration’s plans to promote trade liberalization “ globally, regionally and bilaterally.”

“These votes,” Zoellick said, “show that when real agreements with concrete benefits for business and consumers are on the line, Congress supports the expansion of free trade.” He pointed out that the United States currently is in various stages of free trade negotiations with Morocco, Australia, five nations in Central America and five nations in southern Africa. In addition to Chile and Singapore, the United States already has in place free trade agreements with Canada, Mexico, Israel, Jordan and Sub-Saharan Africa.

As all of these negotiations go forward, Auggie Tantillo, a veteran Washington textile lobbyist who represents the American Manufacturing Trade Action Coalition, said US trade policy is “ seriously flawed” and does not address the key issue of what it means to US manufacturing industries.

He believes liberalized trade agreements should be negotiated with nations that offer two-way trade opportunities and not just those interested in exploiting the United States.

From the standpoint of US textile manufacturers and importers of textiles and apparel, the existing trade agreements are at best a mixed blessing, and they expect to wage some fierce battles in connection with the agreements that are being negotiated.

Textile manufacturers and their supporters in Congress insist that future agreements should include yarn-forward country of origin provisions that require apparel to be made of yarn and fabric manufactured in the participating countries. That pattern was established with the North American Free Trade Agreement; the Sub-Saharan Africa, Singapore and Chile agreements; and the initial US offer in the Central American negotiations.

In addition to yarn-forward requirements, those agreements also provide for Tariff Preference Levels (TPLs) that grant special treatment to specified amounts of textiles and apparel from third countries not participating in the agreements. TPLs are strongly opposed by US textile manufacturers, who insist they should not be part of future trade agreements. At the same time, textile and apparel importers strongly oppose yarn-forward provisions, as they contend such provisions discourage, and in some cases severely limit, trade. They do, however, see some limited opportunities resulting from TPLs. Organized labor can be expected to continue pressing for trade agreements to include protection of labor rights, including freedom of association, freedom to bargain collectively and restrictions on use of child labor.

Arguments over these issues already have come to the forefront in connection with the proposed Central America Free Trade Agreement, and they certainly will be played out in connection with each of the others.

Things will get stickier the closer we come to the 2004 election campaigns, when candidates will be drawing lines between support and opposition to free trade, but many of these specific issues may be sidetracked until after the election, since members of Congress would rather not deal with trade issues in an election year.

CPSC Looks At New Furniture Flammability Rules
The Consumer Product Safety Commission (CPSC) has announced plans to investigate a mandatory upholstered furniture flammability standard that, for the first time, would address the role of cigarettes in upholstered furniture fires. The CPSC has had a rulemaking under consideration since 1994 that addresses the risk presented by small open-flame ignition sources such as matches, candles and cigarette lighters, but it has stayed away from doing anything about cigarettes themselves. It is estimated that some 80 percent of upholstered furniture fires are caused by cigarettes.

The tobacco industry has strongly opposed including cigarettes in flammable fabrics standards, and the issue has been a political hot potato. However, a briefing package issued by the commission staff said it is “reasonable to expand” the agency’s proposed rulemaking to include cigarettes, as well as other hazards.

USDA Approves Cotton Packaging Changes
The US Department of Agriculture (USDA) has published changes in its cotton baling and packaging specifications that should benefit textile manufacturers. The new specifications will be incorporated into the Southern Mill Rules governing cotton/textile mill purchasing contracts.

The specifications, recommended by the Joint Cotton Industry Bale Packaging Committee, approve of two new procedures using plastic strapping and automated wiring systems. These procedures should result in cotton being delivered to the mills in better condition and help to reduce waste.

The full specification is available on the National Cotton Council’s website: www.cotton.org/tech/bale/specs.

CITA Agrees To Consider Limits On Chinese Imports
The Committee for the Implementation of Textile Agreements (CITA) has agreed to at least consider using the “safeguard mechanism” in the Chinese trade agreement to restrict growth of Chinese textile and apparel imports. The US textile industry had filed petitions asking the government to reimpose import quotas on four product categories — knit fabric, cotton and man-made fiber gloves, cotton and man-made fiber dressing gowns and robes, and cotton and man-made fiber brassieres. CITA accepted the petitions, except for the one covering gloves. The action sets in motion a timetable to determine if the industry’s assertion that these imports are creating market disruption is valid.

CITA will take 30 days to accept public comment, and then it must determine within an additional 60 days whether action is called for. If it is, CITA will enter into “consultations” with China. If these bilateral negotiations are not satisfactory, the United States can impose unilateral quotas.

Using the safeguard mechanism has been one of the US textile industry’s highest priorities, but it is strongly opposed by US importers of textiles and apparel.

zoellick_Copy

USTR Proposes Additional Free Trade Pacts
Moving forward with his ever-expanding free trade agenda, USTR Zoellick has notified Congress that he wants to begin negotiations on free trade agreements with the Dominican Republic and Bahrain. Describing the Dominican Republic as the largest economy in the Caribbean Basin, Zoellick said an agreement with that country would add momentum to his plans to have a free trade agreement with six Central American nations. He said the Dominican Republic is one of the world’s fastest-growing economies and an “economic engine in the Caribbean Basin.” An agreement with Bahrain, Zoellick said, would move the United States closer to creation of a Middle East Free Trade Area. He noted Bahrain’s imports of US-made aircraft, machinery, pharmaceuticals and toys worth $419 million and exports to the United States of $395 million including apparel and clothing accessories.

September 2001



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