Legislation Would Expand Imports From Poor Countries

Rep. Jim McDermott, D-Wash., is in the process of developing legislation that would grant duty-free
and quota-free access to the US market for a wide range of least developed countries in a move that
does not sit well with US textile manufacturers. While details of the proposed legislation are
still being worked on, it reportedly would result in freer access to the US market for as many as
50 countries, including Bangladesh and Cambodia, which already are major shippers of apparel to the
United States. The McDermott proposal reportedly would place some limits on imports from Cambodia
and Bangladesh for that reason.

The proposed bill also could provide more liberalized treatment for imports from countries
covered by the African Growth and Opportunity Act, under which textile and apparel trade is
somewhat limited by a country-of-origin rule that requires yarn and fabric in apparel to be made in
participating countries. Without the rule of origin, US manufacturers fear the African nations
could become major transshipping points for Chinese apparel. They also believe US trade in apparel
components with Western Hemisphere nations would decline as result of increased imports from other

The McDermott proposal is expected to incorporate language that would require countries
benefiting from the special treatment to adopt International Labor Organization labor standards. It
also would require that human rights protection be promoted.

The bill also would provide US funds for capacity building and infrastructure development in
the participating countries.

October 16, 2007