*EPF312 12/12/2001
Some U.S. Legislators Lament Promised Limits on Textile Imports
(House deal would affect textiles from Caribbean, Andes) (1060)

By Berta Gomez
Washington File Staff Writer

Washington -- In the week since the House of Representatives voted to grant the president broader authority to negotiate trade agreements, some U.S. lawmakers and industry representatives are criticizing promises made by House leaders in exchange for favorable votes.

The House passed trade promotion authority (TPA) December 6 on a 215-214 vote -- but only after Republican leaders promised colleagues from textile-producing districts that they would act to limit existing apparel and textile trade benefits for Caribbean Basin countries and pending benefits for Andean countries.

The changes would require knitted and woven fabrics to be dyed and finished in the United States to qualify for duty-free benefits, rolling back tariff benefits previously granted by Congress.

The promise came in a letter signed by House Speaker Dennis Hastert, Republican Majority Leader Dick Armey and Republican Whip Tom DeLay. The leaders pledged that no new trade bills would be brought before the House without changes to the Caribbean Basin Trade Partnership Act (CBTPA) passed in 2000 and the pending Andean Trade Preferences Act (ATPA).

The ATPA expired December 4. The House passed a bill in November extending and expanding ATPA, but the Senate has not yet acted on its own version.

Textile-state Republicans were also assured in a letter from Commerce Secretary Donald Evans that the Bush administration would consult closely with Congress before proposing trade benefits for Pakistan, its ally in the war on terrorism, in order to "minimize the impact on the U.S. textile and apparel industry."

Although the Evans letter might have convinced some wavering lawmakers to support the trade bill, the House leaders' pledge was widely credited for last-minute vote-switching on the House floor in favor of trade promotion authority (TPA) for the president.

Also known as "fast-track," TPA requires Congress to conduct up-or-down votes on trade agreements negotiated by the administration within a specified time frame and without possibility of amendment. For TPA to become law, a final bill must be passed by both the House and Senate and then signed by President Bush. Senate Democratic Majority Leader Tom Daschle says he plans to schedule a vote on TPA in early 2002, and passage is expected.

TPA has been a top priority of the Bush administration, which is eager to pursue a Free Trade Area of the Americas (FTAA), bilateral free trade agreements with Chile and Singapore, and full participation in World Trade Organization (WTO) talks launched in November.

The House leaders' pledge on textiles, however, has come under intense criticism for its promised limitations on trade benefits for U.S. neighbors and allies in the Western Hemisphere.

In a December 11 letter to Hastert, the National Retail Federation expressed outrage over the deal and said it could prove to be a "Pyrrhic victory" for the textile industry.

"With the addition of a new restriction on the ability to dye and finish fabric in the region, U.S. retailers and importers will have little, if any, incentive to source under the [CTBPA] program or under any Andean initiative that also includes such a restriction. The result will be that less, not more, U.S. fabric will be sold in the Caribbean Basin and Andean regions, which will end up benefiting Asian producers," the federation said.

Within Congress, opponents include Charles Rangel of New York, the ranking Democrat on the House Ways and Means Committee, who has said he will actively lobby Senate Democrats to oppose the change. Rangel was a key supporter of the CBTPA, which aims to spur economic development through apparel and textile trade.

Reporters quoted him as saying that the promise on textile imports was "blatant protectionism in the name of free trade and at the expense of the Caribbean nations."

Similarly, Senator Bob Graham, a Florida Democrat who strongly supported both the Caribbean and Andean bills, called the House leaders' side deal misguided. He said December 12 he hoped that when the full Senate considered TPA members would ignore the House deal. He had no legislative remedy to offer because the deal is not part of the bill, he said.

Graham said the deal runs counter to the U.S. textile industry's best interests by punishing other Western Hemisphere producers. Before the protective quotas under the existing Multifiber Arrangement (MFA) governing textile trade run out in 2005, he said, the U.S. industry should now be working to strengthen integration with Caribbean and Andean suppliers in order to compete with cheaper Asian imports.

For its part, the Bush administration has been muted in its reaction. At a December 12 trade conference in Washington, Deputy U.S. Trade Representative Peter Allgeier responded indirectly to a question about the House leaders' side deal by indicating that affected countries may prefer textile-related trade agreements to existing benefits. Allgeier said he had met on December 11 with a Central American trade official who demonstrated a "clear recognition" of the difference between unilateral preferential tariff programs that can be altered, and the more lasting benefits that result from "reciprocal trade negotiations."

President Bush also sent a letter December 6 thanking Republican Robin Hayes for his vote on TPA and assuring the representative from textile-producing North Carolina that the White House will protect the interests of textile and apparel industry workers.

"I share [Hayes'] view that our industry can be globally competitive if we demand a level playing field," Bush said in the letter. "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 negotiations."

Hayes told reporters that his vote was one of the most difficult of his career but that assurances from House leaders and the administration had moved him in favor of the TPA measure.

"We got everything we wanted," Hayes said. "We received concrete assurances that our textile industry would be not only protected, but also bolstered in the future."

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

Return to Public File Main Page

Return to Public Table of Contents