WTO Will Negotiate Textile Issues

hen the World Trade Organization (WTO) launches a new round of international trade
negotiations January 28 in Geneva, three issues of major importance to textile industries worldwide
will be on the table. They are: an effort by the less-developed nations, led by India, to speed up
removal of textile and apparel tariffs now due to expire in 2005; reductions in textile and apparel
tariffs; and revisions in trade remedy laws, suchas anti-dumping and countervailing duties.

While the Bush administration has steadfastly said it will not agree to any speed-up for
removal of quotas, the issue remains on the table and is of concern to U.S. manufacturers. The
question of how to address tariff reductions is wide open at this time.

Many in the WTO would like to see an across-the-board percentage cut in tariffs, but the
U.S. industry contends that would not be fair, as many countries currently have tariffs ranging as
high as 70 percent, while U.S. tariffs average 13 percent. Industry representatives are urging U.S.
negotiators to resist any tariff cuts and focus instead on the duties that other nations levy on
imports. Retailers and importers of textiles and apparel would like to see all tariffs removed
everywhere in order to encourage freer trade.

In a statement regarding trade issues, President George W. Bush said: “I will insist that we
press open foreign markets for our textile products as a part of future trade agreements, and that
our trading partners comply with the rules of our existing arrangements. In short, I intend to
ensure that the interests of our textile industry and workers are at the heart of our trade

FTC Issues Warning On ‘Made In USA’ Labeling

The Federal Trade Commission (FTC) has issued a “Consumer Alert” warning consumers, retailers and
manufacturers that unscrupulous textile and clothing manufacturers may take advantage of the wave
of patriotism following the September 11 terrorist attack and mislabel their products “ Made in
U.S.A.” The FTC warning says consumers are seeking products that are “Made in U.S.A.” with the
expectation that the claim is “truthful and accurate.” There is no law requiring manufacturers in
general to disclose U.S.

content, but many do so for marketing purposes. However, in the case of textiles and
apparel, there is a law requiring labels on every product to state where the product is
manufactured. The textile labeling act is quite specific in that all U.S.-made products have to
have a “Made in U.S.A.” or equivalent phrase; products made in the United States of imported
materials must so state, and products made in part in the United States and partly abroad must
identify both countries.

More Textile And Apparel Quotas Dropped

The third phase of the 10-year phase-out of textile and apparel quotas going into effect
this month lifts restrictions on a verity of yarns, fabrics, made-up goods and apparel. Products
now free from import quotas include: some textured and non-textured filament yarns, man-made fiber
staple yarns and some silk yarns; knit fabrics, wool tapestry fabrics and glass fiber fabrics;
made-up goods, including luggage and some table linens, non-terry towels and blankets; and apparel
products, including brassieres, robes and dressing gowns. Details, including specific product
categories, are available on the Office of Textiles website:

Textile Industry Gets More Promises From Bush On Trade

The U.S. textile industry and its supporters in Congress have extracted a far-ranging, nine-point
commitment from the Bush administration to address international trade issues that are contributing
to the industry’s severe economic problems. Letters from Commerce Secretary Donald L. Evans to
members of the Congressional Textile Caucus say President Bush recognizes the “competitive
challenges” facing the industry and promises to work closely with members of Congress “to level the
playing field for our industry internationally.” The program outlined by Evans says the
administration will:

1. Work aggressively to pursue the opening of foreign markets to U.S. textiles and apparel
in any future trade agreements, making reciprocal market access in the textile and apparel market a
priority in trade.

2. Place high priority on enforcing existing trade agreements and closely monitor foreign

trade barriers.

3. Resist efforts on the part of some developing countries to accelerate the textile quota
phase-out now scheduled to be completed by 2005, noting that the Agreement on Textiles and Clothing
covering quotas was carefully balanced to provide the U.S. industry with a gradual transition to
eventual removal of all quotas.

4. Help U.S. textile companies take advantage of the benefits of U.S. tariff preference
programs, including the Caribbean Basin Trade Partnership Act and the African Growth and
Opportunity Act. This will emphasize requirements to use U.S.-manufactured yarn and fabrics.

5. Conduct market promotion programs with a variety of trade shows, seminars and other
events under the Commerce Department’s Export Promotion Program.

6. Combat illegal textile transshipments by strengthening customs enforcement both under
U.S. Customs laws and in connection with any future trade agreements, ensuring that they include
clear and enforceable rules of origin.

7. In connection with the administration’s program to assist Pakistan in return for its
support of the anti-terrorist program, to work with Congress to minimize the impact of any such
efforts on the U.S. textile and apparel industry.

8. Expand the Trade Adjustment Assistance Program to better address the needs of textile and
apparel workers who lose their jobs as a result of international trade.

9. Enforce anti-dumping and other trade remedy laws generally and on behalf of the textile
industry in particular.

While the Evans letter outlines a comprehensive approach to addressing textile trade issues,
much of what is contained in the letters depends on just how diligent and effective the
administration will be in following through on its promises and to what extent Congress will go
along with them.

OSHA Agrees To Reporting Changes

An agreement between the National Association of Manufacturers and the Occupational Safety
and Health Administration (OSHA) to modify new reporting rules, which go into effect this month,
incorporates some changes supported by the textile industry. Key among the changes is an agreement
that during the first 120 days after January 1, OSHA compliance officers will not issue citations
for violation of the new rules if employers can demonstrate they are making a good-faith effort to
comply. OSHA also agreed to clarify its definition of work-related injuries. The agreement does not
affect OSHA’s earlier decision to delay implementation of three other provisions of the rule for at
least a year. Those provisions include criteria for recording work-related hearing loss, the rule’s
definition of musculoskeletal disorders and the method for reporting such disorders. Additional
information about the new reporting rules is available on OSHA’s website: www.osha.gov.

Editor’s Note: Blending the best of Textile Industries and Textile World, the new Textile World
will continue to publish James A. Morrissey’s Washington Outlook column.

Accredited by the U.S. Congress Periodical Press Association, Morrissey has reported
extensively on Washington developments affecting the textile industry for more than 30 years.

January 2002