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From The Editor

Walks Like A Textile, Quacks Like A Textile, But Not A Textile Product

James M. Borneman, Editor In Chief

Textile trade law is a fascinating area of frustration. For some, U.S. trade laws are preferred foreign policy tools that establish economic links among nations — usually involving foreign makers and U.S. consumers and the promise of trade balance sometime in the future.

For others, using trade law progressively is a way to help raise least developed countries out of poverty. U.S. merchants have interests in trade law that assists them in bringing low-cost goods to U.S. consumers while improving the competitiveness of their operations. U.S. trade unions want trade law to reward countries that make improvements in worker rights, freedom to organize, child labor restrictions and wages. U.S. textile manufacturers range from hard-line protectionists to more moderate "level playing field" players that want to ensure fair competition with foreign sources that may have an advantage by leveraging cheap labor; low safety, health and environmental regulations; and manipulation of currency that acts like an export subsidy.

And, don't forget the political game of trade that attracts big dollars and support from all of these interests and others to candidates running for office.

A news piece by Textile World Washington Correspondent Jim Morrissey concerning controversy over a recent trade-related ruling states: "The controversy stems from the release by the U.S. Trade Representative of the latest Generalized System of Preferences [GSP] Review, in which the government denied a petition from Exxel Outdoors, a manufacturer of sleeping bags, to have them classified as textile products. The decision will allow overseas manufacturers to avoid a 9-percent tariff on a wide range of products, including sleeping bags, that are not classified as textile products."

Aside from being a real head-scratcher — who knew that a sleeping bag wasn't a textile product? — the ruling is a brilliant example of what a tangled web trade law really is.

For background, the United States International Trade Commission concluded investigation No. 332-513 and issued Publication 4141: "Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2010 Special Review, Certain Sleeping Bags." Although in the public version of the report, most of the data and, ironically, the advice are removed - literally - from the document, you can see how detached from reality the world of trade policy really is.

Bangladesh — which has cheaper labor costs than China, which has a 98-percent market share of sleeping bags imported to the U.S. — exported $17,287 worth of sleeping bags to the United States in 2008 and $611,927 in 2009. Bangladesh also qualifies for relief under GSP, and because sleeping bags aren't textile products, it is not subject to the 9-percent tariff. China, on the other hand, is subject to the tariff.

Is a sleeping bag a textile product? At the moment, no, and the ruling is a win for Cellcorp Global Limited - rival of Exxel in the matter; the NorthPole Ltd., which has an operation in Bangladesh and a second underway; the Peoples Republic of Bangladesh; and the National Retail Federation.

July/August 2010