[WPRT 105-8]
[From the U.S. Government Publishing Office]


105th Congress                                                   WMCP:
2d Session                  COMMITTEE PRINT                      105-8 
_______________________________________________________________________

                                     


                         SUBCOMMITTEE ON TRADE

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                               __________

                            WRITTEN COMMENTS

                                   ON
 
         ADDITIONAL MISCELLANEOUS TRADE AND TARIFF LEGISLATION





                                     
[GRAPHIC] [TIFF OMITTED] NOT AVAILABLE IN THIS FORMAT

                                     
                              JULY 7, 1998

  Printed for the use of the Committee on Ways and Means by its staff


                              -------------

                     U.S. GOVERNMENT PRINTING OFFICE
48-732 CC                    WASHINGTON : 1998






                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa


Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed record of written comments remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing/written comments 
record, the process of converting between various electronic formats 
may introduce unintentional errors or omissions. Such occurrences are 
inherent in the current publication process and should diminish as the 
process is further refined.



                            C O N T E N T S

                               __________

                                                                   Page

Advisory of Monday, December 22, 1997, announcing request for 
  written comments on additional miscellaneous trade and tariff 
  legislation....................................................     1

                                 ______

H.R. 2148:
    Hickory Throwing Company, Hickory, NC, Michael R. Cobb, 
      letter.....................................................     6
    Highland Industries, Inc., Greensboro, NC, Randy Lippard, 
      letter.....................................................     7
    Hoechst Corporation, H. Newton Williams, letter..............     7
    ICF Industries, Inc., New York, NY, statement and attachment.     8
    Rayon Yarn Corporation, Spartanburg, SC, Steve Lathan, letter    16
H.R. 2151:
    Disguise, Inc., San Diego, CA, statement and attachment......    17
    Mattel, Inc., El Segundo, CA, Kelly Bundy, letter and 
      attachments................................................    22
H.R. 2236: No comments submitted.
H.R. 2237: No comments submitted.
H.R. 2238: No comments submitted.
H.R. 2239: No comments submitted.
H.R. 2240: No comments submitted.
H.R. 2241: No comments submitted.
H.R. 2242: No comments submitted.
H.R. 2243: No comments submitted.
H.R. 2244: No comments submitted.
H.R. 2245: No comments submitted.
H.R. 2246: No comments submitted.
H.R. 2268: No comments submitted.
H.R. 2269: No comments submitted.
H.R. 2270: No comments submitted.
H.R. 2271: No comments submitted.
H.R. 2287: No comments submitted.
H.R. 2322: No comments submitted.
H.R. 2324: No comments submitted.
H.R. 2325: No comments submitted.
H.R. 2326: No comments submitted.
H.R. 2334:
    AlliedSignal Inc., statement.................................    28
H.R. 2336:
    American Textile Manufacturers Institute, Carlos Moore, 
      statement..................................................    31
H.R. 2339:
    ABB CENO, Windsor, CT, and Hematite, MO, Robert S. Bell, Jr., 
      and Bruce J. Kaiser, statement.............................    31
H.R. 2498: No comments submitted.
H.R. 2520: No comments submitted.
H.R. 2521: No comments submitted.
H.R. 2576: No comments submitted.
H.R. 2583: No comments submitted.
H.R. 2686: No comments submitted.
H.R. 2770: No comments submitted.
H.R. 2771:
    Maloney Commodity Services, Inc., Stamford, CT, Robert F. 
      Maloney, letter............................................    35
H.R. 2857: No comments submitted.
H.R. 2899:
    Hed Cycling Products, White Bear Lake, MN, Anne Hed, letter..    36
    Innovations in Composites, Inc., Vista, CA, Kirk Jones, 
      letter.....................................................    37
H.R. 3083: No comments submitted.
      

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEANS


                           SUBCOMMITTEE ON TRADE

FOR IMMEDIATE RELEASE                                CONTACT: (202) 225-6649

December 22, 1997

No. TR-19

              Crane Announces Request for Written Comments

                   on Additional Miscellaneous Trade

                         and Tariff Legislation

     Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on 
Trade of the Committee on Ways and Means, today announced that the 
Subcommittee is requesting written public comments for the record from 
all parties interested in additional technical corrections to recent 
trade legislation and miscellaneous trade and tariff proposals.
      

BACKGROUND:

      
    During the 105th Congress, a number of technical amendments have 
been proposed to facilitate the implementation of major trade 
legislation passed during the 103rd and 104th Congresses, including the 
North American Free Trade Agreements Implementation Act (P.L. 103-182), 
the Uruguay Round Agreements Act (P.L. 103-465), and the Miscellaneous 
Trade and Technical Corrections Act of 1996 (P.L. 104-295).
      
    On June 30, 1997, Chairman Crane requested written public comments 
from parties interested in technical corrections to U.S. trade laws, 
and legislation introduced by Members to provide temporary suspensions 
of duty for specific products (TR-10). The request for comments 
included all such bills introduced by Members to that date during the 
105th Congress.
      
    In response to Chairman Crane's request, the Subcommittee prepared 
a draft bill, including those provisions which were non-controversial 
and revenue neutral based on the public comments, Administration 
review, and estimates by the Congressional Budget Office. The 
provisions also reflected technical comments by the U.S. International 
Trade Commission and revisions proposed by the Administration. On 
October 7, 1997, Chairman Crane introduced H.R. 2622, the 
``Miscellaneous Trade and Technical Corrections Act of 1997.'' The 
Committee reported H.R. 2622 to the House on October 31, 1997 (H. Rept. 
105-367).
      
     Chairman Crane is requesting submission of written comments on 
additional proposals to amend U.S. trade law and on legislation 
introduced to provide temporary suspensions of duty or other duty 
changes for specific products. This request for written comments 
includes all such bills introduced by Members after June 30, 1997, and 
before the end of the First Session of the 105th Congress.





PROPOSED MISCELLANEOUS TRADE PROVISIONS, DUTY-SUSPENSION, DUTY-REDUCTION, AND
                       DUTY-FREE ENTRY BILLS:

      
    1. H.R. 2148 would amend subchapter II of chapter 99 of the 
Harmonized Tariff Schedule (HTS) by inserting a new heading for viscose 
rayon yarn, untwisted or with a twist not exceeding 120 turns/m 
(provided for in subheading 5403.31.00), except for medium-tenacity 
rayon filament yarn (2.8 to 4.1 grains per denier) manufactured solely 
for the purpose of carbonizing, and to provide a reduced duty of 7.5 
percent through December 31, 1998.
      
    2. H.R. 2151 would amend the notes to chapters 61 and 62 of the HTS 
by adding at the end of each a new note to cover costumes and pieces or 
component thereof; and, amend note 1(e) of chapter 95 of the HTS by 
inserting a provision for costumes, and pieces or components thereof.
      
    3. H.R. 2236 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irganox 1520 (CAS No. 110553-27-0) 
(provided for in subheading 2930.90.29) as duty free through December 
31, 1999.
      
    4. H.R. 2237 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irganox 1425 (CAS No. 65140-9-2) (provided 
for in subheading 2931.00.30) as duty free through December 31, 1999.
      
    5. H.R. 2238 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irganox 565 (CAS No. 991-84-4) (provided 
for in subheading 2933.69.60) as duty free through December 31, 1999.
      
    6. H.R. 2239 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irganox 1520LR (provided for in subheading 
3812.30.60) as duty free through December 31, 1999.
      
    7. H.R. 2240 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacure 184 (CAS No. 947-19-3) (provided 
for in subheading 2914.40.40) as duty free through December 31, 1999.
      
    8. H.R. 2241 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Darocure 1173 (CAS No. 7473-98-5) (provided 
for in subheading 2914.40.40) as duty free through December 31, 1999.
      
    9. H.R. 2242 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacure 819 (CAS No. 162881-26-7) 
(provided for in subheading 2931.00.30) as duty free through December 
31, 1999.
      
    10. H.R. 2243 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacure 369 (CAS No. 119313-12-1) 
(provided for in subheading 2934.90.39) as duty free through December 
31, 1999.
      
    11. H.R. 2244 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacure 1700 (provided for in subheading 
3815.90.50) as duty free through December 31, 1999.
      
    12. H.R. 2245 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacor 252LD (CAS No. 95154-01-1) 
(provided for in subheading 2934.20.40) as duty free through December 
31, 1999.
      
    13. H.R. 2246 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Irgacor 1405 (CAS No. 171054-89-0) 
(provided for in subheading 2934.90.39) as duty free through December 
31, 1999.
      
    14. H.R. 2268 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for 2-amino-4-(4-aminobenzoylamino)-
benzenesulfonic acid sodium salt (CAS No. 167614-37-1) (provided for in 
subheading 2930.90.29) as duty free through December 31, 2000.
      
    15. H.R. 2269 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for 2,3-xylenesulfonamide, 5-amino-N-(2-
hydroxyethyl) (CAS No. 25797-78-8) (provided for in subheading 
2935.00.95) as duty free through December 31, 2000.
      
    16. H.R. 2270 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for 3-amino-2'-(sulfato-ethylsulfonyl) ethyl 
benzamide (CAS No. 121315-20-6) (provided for in subheading 2930.90.29) 
as duty free through December 31, 2000.
      
    17. H.R. 2271 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for 5-Nitro-2-thiazolamine (CAS No. 121-66-4) 
(provided for in subheading 2934.10.10) as duty free through December 
31, 2000.
      
    18. H.R. 2287 would apply rates of duty effective after December 
31, 1994, to certain water-resistant wool trousers (provided in 
subheadings 6203.41.05 or 6204.61.10) that were entered, or withdrawn 
from warehouse for consumption, after December 31, 1988, and before 
January 1, 1995.
      
    19. H.R. 2322 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for the organo-phosphorus compound ACM (CAS No. 
167004-78-6) (provided for in subheading 2931.00.90.30) as duty free 
through December 31, 1999.
      
    20. H.R. 2324 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for the synthetic organic coloring matter C.I. 
Pigment Yellow 109 (CAS No. 106276-79-3) (provided for in subheading 
3204.17.04) as duty free through December 31, 1999.
      
    21. H.R. 2325 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for the synthetic organic coloring matter C.I. 
Pigment Yellow 110 (CAS No. 106276-80-6) (provided for in subheading 
3204.17.04) as duty free through December 31, 1999.
      
    22. H.R. 2326 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for the organic chemical para-
chlorobenzonitrile (CAS No. 623-03-0) (provided for in subheading 
2926.90.14) as duty free through December 31, 1999.
      
    23. H.R. 2334 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for ferroboron (provided for in subheading 
7202.99.50) as duty free through December 31, 2000.
      
    24. H.R. 2336 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for woven fabric, suitable for making 
industrial and automotive power transmission and timing belts, 
containing 75 percent or more, by weight, of filaments of polyamides or 
aromatic polyamides, scoured and heat set and of any weight and having 
warp or fill stretch properties greater than 75 percent at break 
(provided for in subheading 5407.41.00) to provide most-favored-nation 
(MFN) duty rate of 6.7 percent ad valorem through December 31, 2000.
      
    25. H.R. 2339 would amend the tariff classification of nuclear fuel 
assemblies by adding a new note to chapter 84 of the HTS to stipulate 
that subheading 8401.30.00 applies only to fuel rods which are 
collected into bundles to form fuel assemblies. In addition, the bill 
would amend the classification of enriched uranium compound shipped 
abroad and converted into sintered, enriched uranium dioxide pellets 
and then inserted into zirconium alloy tubing sealed by the means of 
plugs, which are welded into either end. The provision would be 
retroactive to January 15, 1996, for eligible goods classified under 
HTS subheadings 2844.20.00 and 8109.90.00, pursuant to Additional U.S. 
Note 3 to chapter 84 as added by the bill.
      
    26. H.R. 2498 would amend the HTS to extend to certain fine jewelry 
certain trade benefits of insular possessions of the United States 
under the Production Incentive Certificate program.
      
    27. H.R. 2520 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for halofenozide (CAS. No. 112226-61-6) 
(provided for in subheading 2928.00.25) as duty free through December 
31, 2000.
      
    28. H.R. 2521 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for anion exchange resins based on copolymers 
of phenol/formaldehyde in primary form (provided for in subheading 
3914.00.60) as duty free through December 31, 2000.
      
    29. H.R. 2576 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for -Bromo--nitrostyrene (CAS 
No. 7166-19-0) (provided for in subheading 2904.90.47) as duty free 
through December 31, 2000.
      
    30. H.R. 2583 would amend section 304 of the Tariff Act of 1930 to 
provide an exemption to the country-of-origin marking requirements for 
golf club components that are imported for processing into finished 
golf clubs in the United States; and golf clubs that are produced in 
the United States.
      
    31. H.R. 2686 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for beta hydroxyalkylamide (CAS No. 6334-25-4) 
(provided for in subheading 3824.90.90) as duty free through December 
31, 2000.
      
    32. H.R. 2770 would amend the Tariff Act of 1930 by inserting a new 
section 484b to provide that large yachts which would otherwise be 
dutiable, may be imported without the payment of duty if imported with 
the intention of offer for sale at a boat show in the United States. 
Payment of duty would be deferred until such a large yacht is sold.
      
    33. H.R. 2771 would amend Additional U.S. Note 5 to chapter 17 of 
the HTS relating to the definition of raw value for purposes of the raw 
sugar import tariff-rate quota.
      
    34. H.R. 2857 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for 2,6-Dimethyl-m-Dioxan-4-ol Acetate (CAS No. 
000828-00-2) (provided for in subheading 2932.99.90) as duty free 
through December 31, 2000.
      
    35. H.R. 2899 would amend chapter 87 of the HTS by inserting a new 
subheading with the article description for subheading 8714.97.00 for 
bicycle wheel assemblies consisting of rim, carbon-fiber spokes, and 
hub flange assembled in one piece, or the above plus a rear freewheel/
free hub, to provide an MFN duty rate of 1.5 percent ad valorem.
      
    36. H.R. 3083 would amend subchapter II of chapter 99 of the HTS by 
inserting a new heading for Grilamid TR90 (CAS. No. 163800-66-6) 
provided for in subheading 3908.90.70) as duty free through December 
31, 1999.
      

DETAILS FOR SUBMISSIONS OF REQUESTS TO BE HEARD:

      
    Any person or organization wishing to submit a written statement 
for the printed record should submit at least six (6) single-space 
legal-size copies of their statement, along with an IBM compatible 3.5-
inch diskette in ASCII DOS Text or WordPerfect 5.1 format only, with 
their name, address, and hearing date noted on a label, by the close of 
business, Monday, January 26, 1998, to A.L. Singleton, Chief of Staff, 
Committee on Ways and Means, U.S. House of Representatives, 1102 
Longworth House Office Building, Washington, D.C. 20515.
      

FORMATTING REQUIREMENTS:

      
     Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
     1. All statements and any accompanying exhibits for printing must 
be typed in single space on legal-size paper and may not exceed a total 
of 10 pages including attachments. At the same time written statements 
are submitted to the Committee, witnesses are now requested to submit 
their statements on an IBM compatible 3.5-inch diskette in ASCII DOS or 
WordPerfect 5.1 format. Witnesses are advised that the Committee will 
rely on electronic submissions for printing the official hearing 
record.
      
     2. Copies of whole documents submitted as exhibit material will 
not be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
     3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
     4. A supplemental sheet must accompany each statement listing the 
name, full address, a telephone number where the witness or the 
designated representative may be reached and a topical outline or 
summary of the comments and recommendations in the full statement. This 
supplemental sheet will not be included in the printed record.
      
     The above restrictions and limitations apply only to material 
being submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__MEANS/'.
      

                                

      

H.R. 2148

    To suspend temporarily the duty on certain other single 
viscose rayon yarn.
      

                                

                         Hickory Throwing Company, Inc.    
                                          Hickory, NC 28602
                                                   January 20, 1998

Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
1102 Longworth house Office Building
Washington, DC 20515

    Dear Mr. Singleton,

    Currently H.R. 2148 is in the Ways & Means Committee process during 
which you are receiving written public comment. The letter is written 
to state our official opposition to the passage of this proposed 
legislation. Specifically, we are opposed to those sections, or any 
future proposals which would reduce or eliminate the import duties or 
tariffs that pertain to the importation of continuous filament rayon 
yarn from any country except those supported by the North American Free 
Trade Agreement (NAFTA). In addition to the proposed H. R. 2148, we 
have been informed that similar legislation (H.R. 2622) has been passed 
from Committee and will be coming to the House of Representatives for a 
vote. We wish to also go on record as being opposed to this proposed 
legislation as it pertains to those aspects of rayon yarn duty 
reductions or elimination. In particular included in H.R. 2148 and 
buried within the text of H.R. 2622 (Sec.221, Sec.241) is legislation 
which would undermine the preferences given to our Mexican (NAFTA) 
partners/ producers in three categories of viscose rayon yarn. If 
passed, these bills would eliminate the 10% U.S. import duty now 
charged on ``non-NAFTA'' produced rayon yarn. We ask that you record 
our official opposition to those rayon yarn import duty reductions 
being proposed in H.R. 2148 (and H.R. 2622). Instead we ask that our 
Representatives support the significant business development which 
NAFTA has brought to our textile industry. Our particular reasons are 
as follows.
    Since 1990, we have been making substantial investments in both 
capital equipment and personnel in anticipation of the favorable 
impacts that NAFTA would bring to our yarn business. In the past six 
months, we have added over $1,100,000 in projected equipment 
expenditures and about $1,700,000 to construct a new manufacturing 
facility in Hickory, NC. Combined with the investments of a related 
business partner, we will be creating a major new production facility 
(nearly $4,000,000) and creating over 20 new jobs as a direct result of 
the NAFTA supported business. These projects are well documented as 
viable projects as the financing is being structured through our local 
government's Industrial Revenue Bond (IRB) program.
    After all the careful planning and work to develop these 
investments in our company and community, it is devastating to learn 
that legislation could be passed to undermine the progress that our 
textile industry has made in recent years. With the U.S. Dollar 
presently as strong as it is, the European and Asian yarn producers 
effectively have at least a 25% lower cost on their products sold in 
the U.S. If you were to grant them a further reduction of 10% by 
eliminating the import duty, it will be nearly impossible for us to 
compete. Viscose filament rayon yarn is currently flooding in to the 
U.S. from Europe. However, we can not export to those European and 
Asian countries due to their protective tariffs and the current 
currency situation. Likewise, with the failing Asian economies, we can 
anticipate significant textile product ``dumping'' in the U.S. And we 
wonder what can be done about the U.S. foreign trade imbalance. The 
answer is obvious, vote  against  this bill.
    If our Legislators fail to support our NAFTA commitments, and 
instead, finance the profit margins of those European/Asian markets 
which are effectively ``closed'' to the U.S. textile companies, then 
much of our gain in recent years will be lost. We ask for your careful 
review of this situation, and we ask you to support our textile 
industry and NAFTA partner countries in this matter.
            Sincerely,
                                            Michael R. Cobb
                                 Director of Planning & Development
      

                                

                              Highland Industries, Inc.    
                                       Greensboro, NC 27408
                                                   January 20, 1998
Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
1102 Longworth House Building
United States House of Representatives
Washington, D.C. 20515

Re: House Resolutions H.R. 2148 & H.R. 2622

    Dear Mr. Singleton:
    We are writing in opposition to all of the above proposed 
legislation and any additional legislation that would seek to suspend 
or eliminate the duty on continuous filament rayon yarn.
    Highland Industries produces a fabric from this yarn that is a 
vital component in the production of Defense Launch Vehicles. Highland 
is the sole approved weaver of this product. Our only current operating 
supplier is Rayon Yarn Corporation of Spartanburg, S. C., a subsidiary 
of CYDSA Corporation, Monterrey, Mexico. There is no supplier of 
continuous rayon that conforms to the present U. S. Military 
specifications.
    The specialized yarn that we purchase from Rayon Yarn Corporation 
and their parent company, CYDSA, is only a small part of their total 
product mix. We have been informed that if any of the above referenced 
proposals are passed, Rayon Yarn Corporation and CYDSA will be forced 
to cease production of all rayon products, and this will leave the 
United States without a qualified production source for our critical 
product.
    The foreign suppliers are currently enjoying a 25 to 30% price 
advantage over our NAFTA supplier due to the devaluation of the 
European currencies against the dollar. Giving an additional 10% 
advantage will force Rayon Yarn Corporation and CYDSA into an 
impossible market situation and they will be forced to cease production 
of all products. This will leave Highland and the United States without 
an on-going supplier of a material critical to the defense of this 
country.
            Sincerely,
                                              Randy Lippard
                                              Director of Marketing
      

                                

                                    Hoechst Corporation    
                                       Washington, DC 20005
                                                   January 19, 1998
Mr. A.L. Singleton
Chief of Staff
Committee of the Ways & Means
1102 Longworth House Office Building
United States House of Representatives
Washington, DC 20515

    Dear Mr. Singleton:

    This correspondence is in response to the Ways and Means 
Committee's request for comment on various miscellaneous tariff bills. 
The Hoechst Corporation is strongly opposed to any legislative effort 
to suspend, reduce or eliminate tariffs on rayon filament yarns. This 
objection is designed to cover H.R. 2148, which is included on your 
most recent list of bills for comment, as well as the two rayon 
provisions that were included in the initial draft of H.R. 2622.
    We base our objection on the fact that rayon filament yarn is a 
direct substitute for acetate filament and high tenacity polyester 
yarn, which are produced in the US by two of our divisions--Celanese 
Acetate and Trevira. We have found this to be true in several valuable 
export markets for our products. In Korea, Chinese rayon filament is 
currently displacing our exports of acetate, which is used in woven 
fabrics, circular knits and velvets. The Chinese certainly recognize 
that substitution of rayon for acetate is possible in that they have an 
18% import duty on acetate. This duty is specifically designed to 
protect their domestic production of rayon, since there is no acetate 
production in China. High tenacity rayon filament is also a substitute 
for high tenacity polyester filament which has several industrial uses 
such as tire cord and is a major competitor for our products in Europe.
    Producers of acetate yarns, as well as manufacturers of fabrics 
that use these yarns, are already under enormous pressure from the 
sheer volume of imports of finished apparel containing fabrics made 
from rayon or acetate yarns. Acetate in the form of linings for 
garments has been particularly hard hit by these imports. 
Unfortunately, the market for rayon filament, acetate filament and high 
tenacity polyester yarns in the United States is stagnant. An increase 
in imports of rayon filament would occur at the expense of US producers 
of acetate and high tenacity polyester filament yarns. Moreover, it is 
inappropriate to grant a unilateral reduction or suspension to these 
important tariffs at a time when our domestic acetate and polyester 
industries are under pressure and our major trading partners continue 
to maintain high duties on our products.
    Ultimately, the effect of suspending or reducing rayon tariffs 
could negatively impact US workers. Celanese Acetate currently is the 
world's largest producer of acetate, employing 2500 people in the 
United States. Its primary production facilities are in Rock Hill, 
South Carolina and Narrows, Virginia. Trevira produces high tenacity 
polyester filament in Salisbury, North Carolina employing 1600 workers.
    For all these reasons, the Hoechst Corporation maintains its strong 
opposition to any legislation that either suspends, eliminates or 
reduces US tariffs on imports of rayon yarn. As a result we oppose H.R. 
2148 and we request the House Ways and Means committee to strike all 
existing provisions in H.R. 2622 associated with rayon duties. We 
further request that the committee oppose any effort to move as an 
individual bill, legislation that eliminates, suspends or reduces 
duties on rayon yarns.
    Thank you for your consideration of our concern in this area.
            Sincerely,
                                         H. Newton Williams
                               Vice President, Government Relations

HNW/clm

98NW31.DC2
      

                                

Comments of ICF Industries, Inc. of New York, New York

in Support of H.R. 2148 (Proposed Duty Suspension Affecting Certain 
Viscose Rayon Yarn)

January 26, 1998

    Chairman Archer and Members of the Committee:
    ICF Industries, Inc. (``ICF'') is a U.S. merchant 
distributor of filament yarn products headquartered at 111 West 
40th Street, New York, New York 10018. This statement is 
submitted on behalf of ICF, its officers and employees. ICF 
very much appreciates the opportunity to comment in detail on 
H.R. 2148, a bill to reduce for one year the existing duty on 
two types of viscose rayon yarn (also known as ``rayon filament 
yarn'') described at HTS #5403.31.00.\1\ This product is used 
in a wide range of textile applications. H.R. 2148 is vital to 
the interests of several important U.S. industries and many 
U.S. companies, and is directly related to legislation already 
approved by the Ways and Means Committee on October 8, 1997 and 
incorporated into H.R. 2622, the Trade and Technical 
Corrections Act of 1997.\2\
---------------------------------------------------------------------------
    \1\ H.R. 2148 provides duty relief through December 31, 1998; if 
approved, relief should extend to December 31, 1999.
    \2\ Section 221 of H.R. 2622 provides a two-year duty suspension 
for high tenacity single yarn of viscose rayon (for industrial end 
uses), as described at HTS #5403.10.30 and proposed in H.R. 1954; 
Section 241 of H.R. 2622 provides a three-year duty suspension for 
other single yarn of viscose rayon with a twist exceeding 120 turns/m 
(for textile end uses), as described at HTS #5403.32.00 and proposed in 
H.R. 1888.
---------------------------------------------------------------------------
    With the exception of a specialized category of yarn 
manufactured for ``carbonizing'' (by North American Corporation 
of Tennessee), rayon filament yarn is no longer manufactured in 
the United States. ICF endorses the exception to the proposed 
duty reduction for carbonizable yarn provided in H.R. 2148, as 
set forth below.
    This statement also notes a printing error in H.R. 2148 and 
provides the correct form.

                              The Product

    Rayon filament yarn is an artificial fiber extruded by what 
is known as the viscose process in which cellulose is liquefied 
via dilution in a caustic alkali solution, heated with carbon 
disulfide and then forced through tiny spinneret holes into a 
bath where it coagulates to form extremely fine jets of rayon 
filament yarn. The product has a wide variety of end uses 
ranging from delicate, silk-like fabrics made for apparel out 
of fine denier textile yarn; to lining, velvet and other more 
durable textile fabrics for apparel; to embroidery, 
monogramming tive stitching threads; to drapery, upholstery and 
other fabrics for home furnishings.

                        The Proposed Legislation

    H.R. 2148 was introduced on July 10, 1997 by 
Representatives Floyd Spence (R-SC) and Norman Sisisky (D-VA), 
and affects two types of textile yarn as follows:
     HTS #5403.31.00 (Textile Yarn): Other yarn; 
single: of viscose rayon, untwisted or with a twist not 
exceeding 120 turns per meter;
    monofilament; multifilament, untwisted or with twist of 
less than 5 turns per meter (#5403.31.00.20)
    multifilament, with twist of 5 turns or more per meter 
(#5403.31.00.40)
    The general duty rate applicable to these yarns is ten 
percent. The current duty rate for imports from Mexico is six 
percent.\3\ The duty rate for imports from Canada is one 
percent. Imports from Israel are exempt from duty. H.R. 2148 
would reduce the general duty to 7.5 percent for one year.
---------------------------------------------------------------------------
    \3\ On October 21, 1997, the U.S. Trade Representative requested 
public comment on a list of articles produced in Mexico that the three 
NAFTA governments (Mexico, Canada and the U.S.) have agreed to consider 
for accelerating tariff elimination. Included in the list of articles 
produced in Mexico are those classified under HTS #5403.31.00 (62 F.R. 
5467).
---------------------------------------------------------------------------

                 Absence of General Domestic Production

    According to data compiled by the Textile Organon, a 
respected industry publication, 658 million pounds of rayon 
filament yarn were produced in the United States during the 
year 1953. Thereafter, a combination of environmental and 
economic constraints forced producers in this country to reduce 
capacity or to shut down altogether. By 1965 U.S. production 
had been reduced to 434 million pounds. By 1975 U.S. production 
had dropped to 65 million pounds. By 1984, production in the 
United States was down to 41 million pounds.
    By the late 1980's there was only one remaining producer of 
rayon filament yarn in the United States. This company was the 
North American Rayon Corporation (``North American'') of 
Elizabethton, Tennessee. In 1996 North American sold only 9.5 
million pounds of rayon filament yarn and was being crushed by 
the massive financial burden of attempted compliance with the 
stringent federal and state environmental regulations 
applicable to the environmentally ``dirty'' rayon filament yarn 
extrusion process. In late 1996, North American decided to 
follow the lead of all other U.S. producers and er part of its 
rayon filament yarn manufacturing activities.
    North American's termination of all but its carbonizable 
rayon filament yarn production means that there is no longer 
any producer in the United States of the type of rayon filament 
yarn that ICF distributes. Further, the high costs which would 
be associated with the construction in the United States of a 
new rayon filament yarn manufacturing facility that could meet 
this country's stringent environmental standards, coupled with 
the historically low margins for textile and apparel inputs, 
assure that domestic users of rayon filament yarn will not be 
able to obtain these yarns from U.S. producers during coming 
years.

                Exception Proposed For Carbonizable Yarn

    North American Rayon Corporation's successor company, North 
American Corporation, now produces only a small category of 
rayon filament yarn that is manufactured for a specialized 
process known as carbonizing. ICF endorses an exception to the 
proposed duty reduction that would allow any imported 
carbonizable yarn to remain subject to the existing ten percent 
duty. The following language in H.R. 2148 sets forth this 
exception with respect to products that fall within HTS 
#5403.31.00: except for medium tenacity rayon filament yarn 
(2.8 to 4.1 grams per denier) manufactured solely for the 
purpose of carbonizing.\4\
---------------------------------------------------------------------------
    \4\ H.R. 2148 as printed contains the wording, ``grains'' per 
denier. The correct term is ``grams,'' which should be used in 
subsequent versions of this legislation.
---------------------------------------------------------------------------

                The U.S. Market for Rayon Filament Yarn

    U.S. consumption of rayon filament yarn for textile and 
industrial end uses during the year 1995 amounted to 
approximately 29,380,000 pounds. North American supplied 
approximately 12,900,000 of these pounds, representing 
approximately 44 percent of combined U.S. demand. In dollars, 
North American's sales accounted for approximately $40 million, 
or 44 percent, of the combined $91.5 million 1995 United States 
market. U.S. consumption of rayon filament yarn for textile and 
industrial end uses during the year 1996 amounted to 
approximately 22,500,000 pounds. North American supplied 
approximately 9,500,000 of these pounds, representing apercent 
of combined U.S. demand. In dollars, North American's sales 
accounted for approximately $32 million, or 44.5 percent, of 
the combined $72 million 1996 United States market.

                             The Consumers

    The consumers of rayon filament yarn for textile end uses 
fall into three general categories: weavers, knitters and 
processors. ICF customers who consume textile rayon filament 
yarn include the following companies:

WEAVERS
Bally Ribbon Mills, Inc.
Bloomsburg Mills, Inc.
Carthage Fabrics Corp.
CMI Industries Inc.
Doran Textiles, Inc.
Fabric Resources Ltd.
Hoffman Mills Inc.
Frank Ix & Sons, Inc.
JPS Converter & Industrial Corp.
Keystone Weaving Mills, Inc.
J.B. Martin Company, Inc.
McGinley Mills, Inc.
Meder Textile Company, Inc.
C.M. Offray & Sons, Inc.
Lawrence Schiff Silk Mills
Schneider Mills, Inc.
Stonecutter Mills Corporation
Trimtex Company Inc.
Wear Best Sil-Tex Mills
A. Wimpfheimer & Brothers, Inc.


KNITTERS

Allied Fabrics Inc.
Andrex Industries
H.H. Fessler Knitting Co., Inc.
Ge-Ray Fabrics
Guilford Mills
Hope Industries
I.G. Textile Mills Inc.
Johnson & Johnson (Ethicon Co. Inc. Division)
Jomac Inc.
Kentex Industries Inc.
Kronfli Spundale Mills Inc.
Liberty Fabrics
Lida Stretch Fabrics Inc.
Metritek Corporation
Mohawk Fabric Co., Inc.
Native Textiles
Richland Mills
Shara-Tex Inc.
Universal Connection Corp.


PROCESSORS

Barbour Threads
Clifton Yarn Mills
Danville Chenille Co., Inc.
Decorative Aides Inc.
Excel Elastic Corp.
Huntingdon Yarn Mills
Ideal Braid Corporation
Kent Manufacturing Co.
Lending Textile Co., Inc.
London Yarn Co.
Moki Yarns, Div. of Lacy Lace Co.
Novita Yarns (Division of St. John Knits)
Robison-Anton Textile Co.
Twistex Yarns Inc.
William Wright Co.
  
  
  
  
  
  

                       The State of the Industry

    Although unemployment in the U.S. declined in 1997 from 5.3 
percent to 4.7 percent, conditions in the apparel and textile 
industries were far less favorable. According to the U.S. 
Department of Labor, the year 1997 witnessed the loss of 57,000 
jobs in the U.S. apparel and textile industries.
    The portions of these industries dependent upon the 
consumption of domestically produced fabrics and processed 
yarns containing filament rayon were no exception. On the 
contrary, the U.S. weaving, knitting and yarn processing 
industries have been hit hard by intense competition from 
overseas suppliers of fabrics and stitching threads containing 
rayon filament yarn, and by the importation of low priced 
apparel and home furnishings. Selling prices are down. 
Employment is down. Looms, knitting machines and twisting and 
other processing machines are standing idle.
    For instance, according to industry sources, domestic 
weavers once controlled approximately 95 percent of the U.S. 
market for woven goods containing filament rayon. Today, 
domestic weavers control only approximately 25-30 percent of 
this domestic market, and they do so only by selling at very 
low prices. Industry sources also indicate that the converters 
who arrange for the dying and finishing of textile greige goods 
are now prone to look to U.S. weavers only for initial orders 
requiring innovation or for quick response, and that volume 
business is being given to overseas suppliers in China, Korea, 
India, Indonesia, Pakistan and Turkey whose quality generally 
does not match that of the U.S. weavers, but whose 
manufacturing costs and prices are considerably lower.
    This has reduced U.S. employment at some weavers. 
Similarly, the rece priced velvet fabrics from Korea and 
elsewhere has caused the domestic weavers' share of the market 
for rayon velvet fabrics to decline over the last few years 
from approximately 70 percent of the market to less than 50 
percent. Employment has declined and this decline has been 
attributable to the high price of rayon filament yarn.
    Similarly, U.S. manufacturers of embroidery and other 
decorative yarns and threads have maintained market share in 
the face of intense Korean and other foreign competition only 
by slashing prices. Despite dramatic investment in new 
equipment to ensure that quality and productivity remain at the 
highest levels, average selling prices per unit today are 
significantly lower than they were some ten years ago.

             Industry Supports the Proposed Duty Suspension

    Based on the initial industry reaction to proposals for 
duty suspensions for rayon filament yarn that were received by 
the Ways and Means Committee last year, ICF believes that there 
is significant support for H.R. 2148. The Committee opened a 
45-day period for public comment on June 30, 1997 on a group of 
miscellaneous duty suspension bills affecting rayon filament 
yarn that included H.R. 1742, H.R. 1888 and H.R. 1954. During 
that time, the Committee received 50 comments in support of 
H.R. 1742 and one or more of the other bills, all of which 
comments were also applicable to tariff relief for imports of 
the rayon filament yarn described at HTS #5403.31.00. In 
addition to 47 supportive comments from weavers, knitters and 
processors of rayon filament yarn, comments in support were 
received from the American Textile Manufacturers Association, 
the National Knitwear and Sportswear Association, and the 
Textile Distributors Association. The names of the companies 
and associations supporting such tariff relief are listed in 
the attached Table 1 and, under separate cover, we are 
providing you with copies of their comments for review and use 
by the Committee.

                     Opposition to the Legislation

    In 1997, the Commerce Department completed a changed 
circumstances antidumping duty administrative review and 
subsequently revoked the antidumping order on high-tenacity 
rayon filament yarn from Germany. According to the Federal 
Register notice dated May 30, 1997 (62 F.R. 29329), the 
Commerce Department's determination was based on the fact that 
North American, which had been the petitioner in the original 
underlying investigation, ``states that it has no further 
interest in the order.'' The Commerce Department finding 
further stated: We are now revoking the order based on the fact 
that the order is no longer of interest to domestic interested 
parties.
    There were no submissions to the Commerce Department, and 
thus no opposition from the public, in response to the notice 
of preliminary determination to revoke the antidumping order, 
which had included an opportunity for public comment.
    Although there was no opposition to the revocation of the 
antidumping order, and although there was overwhelming support 
for the House tariff suspension legislation (H.R. 1742, H.R. 
1888 and H.R. 1954), one company, Hoechst Corporation 
(hereinafter ``Hoechst Celanese''), did state its opposition to 
the House legislation within the prior official comment period. 
In addition, Eastman Chemical Company also expressed opposition 
in a November 17, 1997 letter to the Committee. Celanese 
Acetate, a member of the Hoechst Group, and Eastman manufacture 
acetate, a cellulosic product which comprises over 90 percent 
of the overall cellulosic product market, and sells at a 
significantly lower price than the rayon filament yarn now 
being imported into the U.S. by ICF.
    ICF has learned that current comments opposing H.R. 2148 
have been sent to the Committee by Hoechst Celanese and by two 
other entities: Rayon Yarn Corporation of Spartanburg, South 
Carolina and Hickory Throwing Company of Hickory, North 
Carolina. In the balance of this statement, ICF provides 
evidence demonstrating that rayon does not compete with acetate 
and hence that Hoechst Celanese's opposition is not justified 
by the facts. With respect to Rayon Yarn Corporation and 
Hickory Throwing Company, ICF urges the Committee to give no 
weight to their opposition. Rayon Yarn Corporation is a 
distribution and warehousing subsidiary of Cydsa, a Mexican 
manufacturer of rayon filament yarn. Cydsa does not manufacture 
any rayon filament yarn in the United States, and Rayon Yarn 
Corporation simply imports Mexican yarn for sale in the United 
States. Cydsa's opposition to H.R. 2148 is therefore apparently 
motivated solely by the self-interested desire to maintain the 
current duty advantage afforded to Mexican yarn, to the 
economic disadvantage of dozens of American consumers of non-
Mexican yarn. Hickory Throwing Company is a commission 
processor of yarn. The address of Hickory Throwing's facility 
aacent to the warehousing facility of Rayon Yarn Corporation, 
which raises the question of whether there is a business 
affiliation or relationship between these two commenters such 
that Hickory Throwing may also be characterized as seeking to 
protect the current tariff advantage of rayon filament yarn 
produced in Mexico.

                  Rayon Does Not Compete with Acetate

    ICF believes and strongly asserts that acetate will not be 
competitively threatened by a tariff reduction on rayon 
filament yarn. On the contrary, rayon and acetate are two very 
different products.
    On the basis of quantity alone, US. acetate capacity is 
over ten times the current volume of rayon imports. This 
enormous difference in volume is because rayon and acetate are 
different scientifically and technically, subject to different 
tariffs and customs treatment, priced differently, and have 
different end uses.

Rayon and Acetate Are Classified Differently Under the 
Harmonized Tariff System

    Artificial filament yarn, single, of viscose rayon is 
classified at HTS headings #5403.10.30 (industrial yarn) and 
#5403.31.00 (textile yarn) and #5403.32.00 (textile yarn). 
Artificial filament yarn, single, of cellulose acetate is 
classified at HTS heading #5403.33.00.

Rayon and Acetate Are Subject to Different Duty Rates

    The general duty rate on these categories of rayon is ten 
percent. The general duty rate on this category of acetate is 
9.6 percent. The special duty rate for textile rayon imported 
from Canada under NAFTA is one percent. The special duty rate 
for acetate imported from Canada (where Hoechst Celanese has an 
affiliate) under NAFTA is 0. The special duty rate for rayon 
imported from Mexico under NAFTA is six percent. The special 
duty rate for acetate imported from Mexico (where Hoechst 
Celanese also has an affiliate) under NAFTA is 0. The 
significant rate differential between the duties on imports of 
acetate and rayon filament yarn from Mexico reflects the 
recognition on the part of U.S. and Mexican tariff negotiators, 
Congress and the U.Sers that there is a qualitative difference 
between the two products, despite current, inconsistent 
arguments to the contrary by Hoechst Celanese and Eastman 
Chemical.

Rayon and Acetate Are Different Chemically

    Although both rayon and acetate derive from wood pulp, the 
chemicals and processes utilized to create rayon and acetate 
spinning dope (the chemical compound from which filaments are 
formed) are markedly different.

Rayon and Acetate Are Made Differently

    Rayon is produced via a Wet Spinning process in which 
filaments emerge from spinnerets into a water based solution. 
Acetate is produced via a Solvent Spinning process in which 
filaments emerge into a vertical tube in which solvents 
evaporate into the air.

Rayon and Acetate Have Different Anti-Static Properties

    Fabrics made of acetate have a strong tendency to cling. 
Fabrics made of rayon do not. This is significant to wearing 
comfort.

Rayon and Acetate Have Different Strengths

    Rayon has considerably higher tenacity or breaking 
strength. This is significant to product lifespan and to ease 
of handling in garment manufacturing.


                                                                        
------------------------------------------------------------------------
                                         Rayon              Acetate     
------------------------------------------------------------------------
cN/tex..........................  17-21.............  10-15             
------------------------------------------------------------------------

Rayon and Acetate React Differently to Moisture

    Rayon has approximately double the capacity to regain 
moisture from the atmosphere, meaning that it will hold a 
considerably higher percentage of its own bone dry weight of 
water than acetate without becoming wet. Likewise, if submerged 
in water rayon will absorb four to five times more water than 
acetate. These differences are significant to wearing comfort.


                                                                        
------------------------------------------------------------------------
                                         Rayon              Acetate     
------------------------------------------------------------------------
Moisture regain at 70 F, 65       11-14 percent.....  6-7 percent       
 percent humidity:.                                                     
Moisture regain at 75 F, 95       26-28 percent.....  13-15 percent     
 percent humidity:.                                                     
Water Imbibition:...............  90-120 percent....  20-28 percent     
------------------------------------------------------------------------


Rayon and Acetate React Differently to Heat

    Rayon chars and decomposes; acetate softens and melts; and 
they do so at different temperatures. Rayon discolors at 284 
degrees Fahrenheit and decomposes at 347-401 degrees 
Fahrenheit. Acetate softens at 356 degrees Fahrenheit and melts 
at 491 degrees Fahrenheit.
    These differences are significant to dying, finishing and 
processing.

Rayon and Acetate Have Different Stretch Capacity

    Acetate has considerably greater capacity to stretch. This 
is significant to wearing comfort, style and textile 
processing.


                                                                        
------------------------------------------------------------------------
                                         Rayon              Acetate     
------------------------------------------------------------------------
Extension of break, dry percent.  16-21.............  20-30             
Extension of break, wet percent.  20-26.............  30-40             
------------------------------------------------------------------------

Rayon and Acetate Must Be Dyed Differently

    Rayon may be dyed by reactive, vat, direct, sulfur, or 
basic dyestuffs. Acetate may only be dyed by dispersed 
dyestuffs. This difference is significant to dying, finishing 
and processing and to environmental issues.

Rayon and Acetate Have Different Reactions to Flame

    Burning rayon leaves a white-gray ash. Burning acetate 
leaves a dark lump.

Rayon and Acetate Have Different Densities

    Rayon is a much denser fiber.


                                                                        
------------------------------------------------------------------------
                                         Rayon              Acetate     
------------------------------------------------------------------------
Specific gravity (g/cm \3\).....  1.52..............  1.32              
------------------------------------------------------------------------


Rayon and Acetate Have Different Supply Levels

    The capacity of the two U.S. acetate manufacturers, Hoechst 
Celanese and Eastman Chemical, is in excess of 200 million 
pounds per annum. Hoechst Celanese accounts for approximately 
75 percent of this volume. By contrast, U.S. imports of rayon 
for textile end uses during the first eleven months of 1997 
were less than 14 million pounds.

Rayon and Acetate Are Priced Differently

    Rayon and acetate sell at considerably different price 
points, with rayon being the more expensive fiber by far. 75 to 
150 denier acetate put up on cones or tubes (small packages 
containing single ends amounting to several pounds of yarn) 
sells in the United States at approximately $1.80 to $2.25 per 
pound. 75 to 150 denier acetate put up on beams (large 
cylinders containing multiple ends amounting to several hundred 
pounds of yarn) sells in this market at approximately $2.00 to 
$2.40 per pound. By contrast, the average import value 
(exclusive of duty) for all rayon for textile end uses brought 
into the United States during the first eleven months of 1997 
was $2.81 per pound. Adding marine freight and insurance and a 
dealer's or distributor's mark-up to this figure would bring 
the average U.S. market price for all rayon for textile end 
uses imported into the United States during the first eleven 
months of 1997 to above $3.00 per pound even without duty. The 
price of high quality rayon imported from Germany and Holland 
(which constituted over 37 percent of all textile rayon imports 
during the first eleven months of 1997) currently ranges from 
approximately $3.90 to $4.25 per pound for 100 to 150 denier 
bright yarn on cones or tubes and from approximately $4.10 to 
$4.45 for 100 to 150 denier bright yarn on beams. Although 
inexpensive rayon package yarn is also being shipped into the 
U.S. from Asia and Eastern Europe for textile end uses, this 
yarn is of poor quality and not suitable for linings, velvets 
or better apparel fabrications. Nor is the quantity of such 
yarn (several hundred thousand pounds per month) sufficient to 
affect the U.S. acetate market.

Rayon and Acetate Are Used Differently

    Although Rayon and acetate are both consumed by the textile 
industry, the two fibers serve distinctly dis in the 
marketplace. For instance, rayon tends to be used for higher 
priced goods requiring greater abrasion resistance and tensile 
strength. Fabrics made of rayon tend to be more comfortable, to 
cling less, and to last longer. Likewise, in sharp contrast to 
rayon, acetate is not suitable for sewing or embroidery yarns 
or for high twist crepe yarns. Similarly, acetate is not used 
for industrial purposes. By contrast, approximately 13 percent 
of the total U.S. imports of rayon during the first eleven 
months of 1997 were applied to industrial end uses.
    In sum, based on all comparative factors, including 
quality, price, and usage, it remains ICF's position, and that 
of dozens of purchasers of rayon filament yarn, that 
continuation of the existing duty serves no useful commercial 
or public policy purposes. The U.S. textile industry 
overwhelmingly supports this position. Nonetheless, ICF has 
entered into discussions with Hoechst Celanese to review the 
basis for its opposition and to determine whether an 
appropriate compromise would address Hoechst Celanese's 
concerns and still provide U.S. consumers with the tariff 
relief they need and support.

                               Conclusion

    While not a complete panacea, a reduction of the ten 
percent duty on the types of rayon filament yarn affected by 
H.R. 2148 would lower the cost of these yarns to domestic 
producers no longer able to buy a U.S.-made, duty-free rayon 
filament yarn product. Such a duty reduction would thus go a 
long way toward enhancing the ability of U.S. companies 
manufacturing fabrics for apparel and home furnishings and 
embroidery and similar decorative yarns--and of their customers 
in the apparel and home furnishings industries--to compete more 
effectively in their U.S. home market against imported products 
and in the world market generally. It is also important to 
emphasize that if the tariff reduction on rayon filament yarn 
classified under HTS #5403.31.00 is accelerated pursuant to 
NAFTA, significant imports of this product will be duty-free by 
the end of 1998 or soon thereafter. This situation will create 
an unfair and discriminatory competitive imbalance between 
rayon filament yarn imports from Mexico and those from other 
countries. Unless necessary and reasonable tariff relief is 
granted to those non-Mexican imports, U.S. users of Mexican 
yarn will benefit at the expense of other U.S. users of non-
Mexican yarn. The fact that the U.S. marketing subsidiary of a 
major Mexican yarn producer and another company apparently 
allied with it are opposing H.R. 2148 is clear evidence just 
how valuable, albeit unjustified, an advantage the Mexican 
producer has captured.
    In short, ICF urges the Committee to include H.R. 2148 as 
part of any miscellaneous tariff legislation approved by the 
Committee.
      

                                

      

                                 Table 1                                
------------------------------------------------------------------------
            Supporter                 Location(s)       Date of letter  
------------------------------------------------------------------------
Akzo Nobel Industrial Fibers,     Scottsboro, AL....  8/14/97           
 Inc..                                                                  
Allied Fabrics, Inc.............  Belmont, NC.......  7/30/97           
Bally Ribbon Mills..............  Bally, PA.........  7/31/97           
Beaver Manufacturing............  Mansfield, GA.....  8/4/97            
The Bibb Company................  Atlanta, GA.......  8/4/97            
                                  Porterdale, GA....                    
Bloomsburg Mills, Inc...........  New York, NY......  7/24/97           
                                  Bloomsburg, PA....                    
                                  Monroe, NC........                    
Carthage Fabrics Corp...........  Carthage, NC......  8/1/97            
                                  New York, NY......                    
Clifton Yarn Mills..............  Clifton Heights,    7/24/97           
                                   PA.                                  
CMI Industries Inc..............  Greensboro, NC....  8/5/97            
                                  Clarkesville, GA..                    
                                  New York, NY......                    
                                  Columbia, SC......                    
                                  Clinton, SC.......                    
                                  Elkin, NC.........                    
                                  Geneva, AL........                    
                                  Stuart, VA........                    
Danville Chenille Co., Inc......  So. Danville, NH..  8/8/97            
Ethicon (Div. of Johnson &        Somerville, NJ....  8/4/97            
 Johnson).                        Coamo, PR.........                    
                                  Caguas, PR........                    
Excel Elastic Corporation.......  Northvale, NJ.....  8/5/97            
                                  Pawtucket, RI.....                    
Fabric Resources Ltd............  Great Neck, NY....  7/31/97           
                                  Rock Hill, SC.....                    
                                  Mullins, SC.......                    
Frank Ix & Sons, Inc............  New York, NY......  7/30/97           
                                  Lexington, NC.....                    
                                  Charlottesville,                      
                                   VA.                                  
Ge-Ray Fabrics..................  Morganville, NJ...  8/6/97            
                                  Asheville, NC.....                    
                                  Augusta, GA.......                    
                                  New York, NY......                    
Hoffman Mills Inc...............  New York, NY......  7/25/97           
                                  Shippensburg, PA..                    
Hope Industries.................  Nashua, NH........  8/6/97            
Huntingdon Yarn Mills, Inc......  Philadelphia, PA..  7/30/97           
I.G. Textile Mills, Inc.........  New York, NY......  8/1/97            
Jomac Inc.......................  Warrington, PA....  8/8/97            
JPS Converter & Industrial Corp.  New York, NY......  8/5/97            
                                  Greenville, SC....                    
                                  South Boston, VA..                    
                                  Rocky Mount, VA...                    
                                  Lincolnton, NC....                    
                                  Kingsport, TN.....                    
                                  Slater, SC........                    
                                  Stanley, NC.......                    
                                  Laurens, SC.......                    
Kent Manufacturing Co...........  Pickens, SC.......  8/6/97            
Kentex Industries, Inc..........  Hudson, NH........  7/31/97           
Keystone Weaving Mills, Inc.....  Lebanon, PA.......  8/5/97            
                                  York, PA..........                    
Lawrence Schiff Silk Mills, Inc.  Quakertown, PA....  7/24/97           
                                  Bethlehem, PA.....                    
                                  Allentown, PA.....                    
                                  Carlisle, PA......                    
                                  Newville, PA......                    
Lending Textile Co., Inc........  New York, NY......  7/29/97           
                                  Montgomery, PA....                    
Lida Stretch Fabrics, Inc.......  New York, NY......  8/14/97           
                                  Charlotte, NC.....                    
J.B. Martin Company, Inc........  New York, NY......  7/29/97           
                                  Leesville, SC.....                    
McGinley Mills, Inc.............  Easton, PA........  7/23/97           
                                  Phillipsburg, NJ..                    
Meder Textile Co., Inc..........  Port Washington,    7/17/97           
                                   NY.                                  
                                  Kings Mountain, NC                    
Metritek Corp...................  Boca Raton, FL....  8/6/97            
Mohawk Fabric Co., Inc..........  Amsterdam, NY.....  7/17/97           
Native Textiles.................  New York, NY......  7/28/97           
                                  Glens Falls, NY...                    
North American Corporation......  Elizabethton, TN..  8/12/97           
C. M. Offray & Son, Inc.........  Chester, NJ.......  7/24/97           
                                  Hagerstown, MD....                    
                                  Anniston, AL......                    
                                  Leesville, SC.....                    
                                  Watsontown, PA....                    
                                  Danville, VA......                    
Richland Mills..................  Hialeah, FL.......  7/31/97           
Robison-Anton Textile Company...  Fairview, NJ......  7/23/97           
                                  Clark Summit, PA..                    
Schneider Mills, Inc............  New York, NY......  7/17/97           
                                  Taylorsville, NC..                    
                                  Forest City, NC...                    
Shara-Tex Inc...................  Vernon, CA........  7/30/97           
St. John Knits..................  Irvine, CA........  8/6/97            
Stonecutter Mills Corporation...  Spindale, NC......  8/4/97            
                                  New York, NY......                    
Trimtex Company, Inc............  Williamsport, PA..  8/12/97           
Twistex Yarns...................  Oceanside, CA.....  7/22/97           
Universal Connection............  Los Angeles, CA...  7/31/97           
Wearbest Sil-Tex Mills Ltd......  Garfield, NJ......  8/7/97            
A. Wimpfheimer & Bro., Inc......  New York, NY......  7/11/97           
                                  Stonington, CT....                    
                                  Orange, VA........                    
                                  Blackstone, VA....                    
Wm. E. Wright L.P...............  West Warren, MA...  8/11/97           
ASSOCIATIONS:                                                           
American Textile Mfgrs.           Washington, D.C...  8/13/97           
 Institute.                                                             
Nat'l Knitwear & Sportswear       New York, NY......  8/12/97           
 Ass'n..                                                                
Textile Distributors Association  New York, NY......  7/23/97           
------------------------------------------------------------------------

      

                                

                                       Rayon Yarn Corp.    
                                      Spartanburg, SC 29307
                                                 January 17th, 1998
Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
U.S. House of Representatives
Longworth House Office Building
Washington, DC 20515

    I am writing for the official record to express strong opposition 
to tariff bill HR 2148, which concerns the reduction, suspension, or 
elimination of duties on rayon filament yarns (primarily from Europe 
and Asia). These specific yarns are also currently being manufactured 
by Celulosa y Derivados de Monterrey, SA de CV (CYDSA), in Monterrey, 
Mexico, and sold and distributed by Rayon Yarn Corporation, an eight 
year old U.S. subsidiary of CYDSA, based in Spartanburg, South 
Carolina. The basis of our objection is that the reduction, suspension, 
or elimination of such duties, would negate or minimize our trading 
preference afforded under the North American Free Trade Agreement.
    Prior to NAFTA, CYDSA identified a segment of the textile 
manufacturing industry consisting of small to medium size companies 
(mostly family owned) which would benefit from an American source of 
rayon yarn. Subsequently, CYDSA invested over $5 million in inventory 
to support these U.S. textile manufacturers and now supply rayon yarn 
to a customer base of over 600 companies. By our calculations, this 
translates to over 40,000 U.S. textile workers who ``benefit'' from 
this product in some fashion. To further expand this U.S. industry, 
CYDSA through Rayon Yarn Corp. and two other North Carolina companies 
(Hickory Throwing Company and Diamante Group,LLC) is participating in a 
$3.5 million Industrial Revenue Bond project to substantially increase 
its employment base and customer service ability. The success of this 
development is directly dependent upon our continued support under the 
NAFTA trade agreement.
    These European/Asian high-volume rayon filament producers are 
intent upon ``dumping'' their products in to the U.S. market while 
remaining protected by unfair (high) import duties in their own 
countries. The allowance of such a ``dumping'' of rayon would pose 
severe economic harm to our industry. Without proper tariff support, 
this unreasonable advantage would force the closure of both our 
production facility in Monterey, Mexico, and the U. S. subsidiary 
locations in Spartanburg, SC and Hickory, NC. This closure would also 
negatively effect the 600+ small to medium size companies who have come 
to rely and thrived on our rayon product. We are the only domestic 
source for these companies for small minimum orders. The overseas 
producers would likely require container load minimums only which would 
be unaffordable to many of our customers. Foreign monopolization of the 
rayon filament yarn market would only dim the future for the small to 
midsize textile industry base.
    Finally, in the age of world-wide economies, it is clearly the 
responsibility of the United States to insist upon ``level playing 
fields'' for its domestic manufacturers. We never shy away from fair 
competition in the international markets. But, we ask that you insure 
equal market access to the European/Asian markets. Under NAFTA, Mexico 
(and Canada) have committed to this. As a result, Mexico is one or the 
only countries that we currently enjoy a positive trade balance. 
Interestingly, CYDSA purchases 100% of its largest rayon raw material 
(wood pulp) from the United Sates, in US$. If HR 2148 or any similar 
legislation passes, the spirit of free trade (NAFTA) will be 
undermined. The subsequent economic crisis in our industry will force 
the closures of our operations. This will eliminate the production of 
all rayon filament yarn from North American soil.
    We thank you in advance for your attention to this serious matter.
            Sincerely,
                                               Steve Lathan
                                  President, Rayon Yarn Corporation
      

                                

H.R. 2151

    To amend the Harmonized Tariff Schedule of the United 
States to correct the tariff treatment of costumes.
      

                                

Statement of Disguise, Inc.

    In response to Chairman Crane's request for public comments 
on miscellaneous tariff proposals, we want to state strong 
opposition to H.R. 2151, a bill which would apply an enormous 
duty on Halloween costumes and would primarily benefit one 
company which is already dominant in the market.

                  The Content and Effect of H.R. 2151

    H.R. 2151 would amend the notes to chapters 61 and 62 of 
the Harmonized Tariff Schedule (HTS) by adding a new note 
covering costumes and pieces or components thereof and amending 
note 1(e) of HTS chapter 95 by inserting a provision for 
costumes, and pieces or components thereof.
    The effect of this change to the HTS would be to adopt a 
strict policy that costumes are to be classified as apparel 
that are subject to high rates of duty and are subject to 
quotas, rather than to allow the Customs Service in some cases 
to classify them as ``festive, carnival or other entertainment 
articles.'' In practical terms, the question presented is 
whether these lightweight, inexpensive costumes are ``toys'' or 
are they ``clothing.'' If H.R. 2151 were enacted, the effect 
would be to apply a 30% tax on American children who go ``trick 
or treating'' and who attend Halloween parties.

  The Issue is Already Being Addressed by the Customs Service and No 
                     Congressional Action is Needed

    The Customs Service right now has under consideration a 
ruling request to reclassify these products in the same manner 
sought in the legislation. Customs published a notice in the 
Federal Register of December 22, 1997, (copy attached) a notice 
of this petition which requests comments by February 20, 1998. 
We believe that the request should be rejected by Customs and 
we are opposing it. We also believe, however, that Customs--not 
the Congress--is the appropriate place to address this 
question. Serious consideration of the treatment of festive 
articles has been given over the years both by Customs and by 
the courts. In November of 1997, Customs issued guidance to the 
field in an advanced level informed compliance publication 
called, ``What Every Member of the Trade Community Should Know 
About: Classification of Festive Articles.'' This document 
resulted from the decision of the U.S. Court of Appeals for the 
Federal Circuit in Midwest of Cannon Falls v. United States, 
1997 U.S. App. LEXIS 21617. We believe that Congress should 
allow Customs to do its job and not step into this situation 
with special legislation.

              H.R. 2151 is Essentially Private Legislation

    It is our belief that one company, headquartered on Long 
Island, New York, would be the overwhelming beneficiary of this 
legislation. We understand that this company already is by far 
the dominant company in the industry, with over half of the 
U.S. market. According to data from Piers Imports, this company 
has imported substantial quantities from China, as well as 
product from Hong Kong, Taiwan and India. According to industry 
sources, this company has built a production operation in 
Mexico to make products there. The costumes from Mexico will 
not suffer the 30% duty because of the North American Free 
Trade Agreement. Congress should not provide what is, in 
effect, private relief through legislation that fits the 
circumstances of one company, indeed the largest company in the 
industry.

                   H.R. 2151 Addresses No Public Need

    Producers of Halloween products are doing very well as the 
popularity of the holiday has increased in recent years. 
According to a survey cited in the New York Times, Halloween is 
second only to Christmas in production of total retail revenue. 
This is not part of a depressed apparel and textile industry 
which Congress historically has tried to help though quotas and 
high tariffs.

       Disguise, Inc., and Other Competitors Should Not Be Harmed

    Disguise, Inc., is located in San Diego, California. It has 
manufactured and distributed Halloween costumes since 1986. The 
company employs approximately 80 permanent employees and up to 
500 seasonal employees in California. In 1997, Disguise was 
acquired by Cesar, a French company dating back to 1842 as a 
maker of masks and costumes. Seventy-five percent (75%) of 
costumes sold by Disguise in the United States are produced in 
this country.
    Of the imported products distributed by Disguise, a portion 
is produced in developing countries, such as Madagascar. These 
imports would not benefit from the Generalized System of 
Preferences if they are reclassified as clothing. Of course, 
they also would not benefit from duty-free treatment under 
NAFTA, like the imports of the dominant company which seeks 
this legislation. Madagascar is a poor country where jobs of 
the kind involved here are badly needed. The Ways and Means 
Committee has indicated its intention to consider trade 
legislation this year to assist southern Africa. Avoiding the 
passage of legislation that would hurt these small island 
countries off east Africa would be consistent with that larger 
goals.
    Disguise plans to continue manufacturing in California. 
However, the flexibility of Disguise and other companies in the 
industry should not be taken away by legislation that is 
designed to help one company--a company that is already the 
dominant player and a company that is also an importer. Given 
what is happening in the marketplace, the effect of H.R. 2141, 
if enacted, would be to pressure companies in our industry to 
import all of the costumes they sell from Mexico or some other 
country that would still enjoy duty-free status. This would 
occur because the market leader is already moving toward use of 
the benefits of NAFTA and the balance of the industry would 
have to compete with its price.

                               Conclusion

    Congress should not help one company raise its prices by 
taxing American children and their families who want to enjoy 
Halloween. The provisions of H.R. 2151 should not be included 
by the committee in a miscellaneous tariff bill. There is no 
economic justification for making such a change. The Customs 
Service can and is addressing the issue, and should be allowed 
to finish that job.


      
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                                       Mattel, Inc.        
                                 Customs Administration    
                                  El Segundo, CA 90245-5012
                                                   January 24, 1998
Mr. A.L. Singleton
Chief of Staff,
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

Re: Subcommittee on Trade Release No. TR-19 dated Dec. 22, 1997. 
        Comments in Opposition to Passage of H.R. 2151

    Dear Mr. Singleton:

    In Release No. TR-19 dated December 22, 1997, the Subcommittee on 
Trade requested comments on numerous Bills, including H.R. 2151, ``To 
amend the Harmonized Tariff Schedule of the United States to correct 
the tariff treatment of costumes.'' Mattel, Inc. submits that the 
current tariff treatment of costumes, dress-up sets, playsuits and 
parts and accessories thereof is correct, and, therefore, opposes H.R. 
2151 for the reasons stated below:

  I. If enacted, H.R. 2151 would cause those costumes, dress-up sets, 
playsuits and parts and accessories therefor, now classified in chapter 
 95 of the Harmonized Tariff Schedule of the United States (HTSUS), to 
   be excluded from chapter 95 and classified as wearing apparel in 
                       chapters 61 and 62, HTSUS.

    If enacted, H.R. 2151 would add new notes in Chapters 61 
and 62, HTSUS, stating that those chapters cover ``costumes and 
pieces or components thereof.'' Additionally, current Note 1(e) 
to Chapter 95, HTSUS, would be amended to exclude from 
classification in that chapter ``fancy dress, or costumes and 
pieces or components thereof.'' Since the particular ``costumes 
and pieces or components thereof'' which are intended to be 
affected by this legislation are not defined, it is apparent 
that the intent of this legislation is to change the 
classification of any and all articles which might be a type of 
costume, and any and all articles which might be a ``piece'' or 
``component'' of a costume, from Chapter 95, HTSUS, which 
covers toys and festive articles, to Chapters 61 and 62, HTSUS, 
which cover wearing apparel.
    As explained more fully below, for many years the toy 
industry has been manufacturing products exclusively for use by 
children in play, commonly referred to in the toy industry as 
dress-up sets and playsuits. These products routinely contain 
many types of components, including textile components which 
imitate wearing apparel (shirts, skirts, blouses, dresses, 
etc.), textile components which are apparel accessories or 
which are classified outside of Chapters 61 and 62, HTSUS 
(i.e., headwear, belts, sweat bands, lanyards, etc.), and non-
textile components (i.e., shoes, jewelry, ribbons, barrettes, 
combs, purses, magic wands, spurs, badges, etc.). Whether 
called costumes, dress-up sets or playsuits, these articles, 
including their constituent parts and accessories, have 
routinely been classified by the Customs Service in Chapter 95, 
HTSUS, provided they meet certain criteria with respect to 
construction, essential character, how they are marketed and 
the expectations of ultimate consumers.
    Since it is apparent that the intent of H.R. 2151 is to 
have all ``costumes,'' and ``pieces'' and ``components'' 
thereof classified in Chapter 61 or 62, HTSUS, adoption of this 
legislation would result in the wholesale reclassification of 
many components currently classifiable outside of Chapter 61 
and 62, into those chapters, which were intended only to cover 
wearing apparel. Equally important, any attempt to clarify this 
legislation to specifically distinguish which components are 
not to be classified in Chapter 61 and 62, would likely result 
in a reversal of the Customs Service practice of classifying 
these articles together, as a unit or set, under a single 
tariff heading. Reversal of this practice would require 
importers to split up each unit or set into its separate parts 
or components for separate classification. This would impose an 
administrative burden on toy companies, and would impose an 
even larger burden on the Customs Service, which currently has 
only a limited capacity to handle separate classifications for 
numerous parts when entry documents are transmitted to it 
electronically, and which is currently experiencing a severe 
shortage of resources in many areas.

   II. Costumes, dress-up sets, playsuits and parts and accessories 
thereof which are principally designed for the amusement of children in 
 role-playing, have traditionally been viewed by the relevant industry 
                      as a class or kind of toys.

    Almost everyone is familiar with the fact that many toys 
are modeled on objects which are used in real life for 
utilitarian purposes. These types of toys include toy musical 
instruments, toy tool, doctor and nurse sets, toy typewriters, 
flashlights, radios, etc. Almost everyone is also familiar with 
the fact that one form of play in which children engage is 
role-playing. This form of play includes dressing up or 
outfitting oneself to imitate adult behavior or professions 
(movie stars/actresses, mothers, ballerinas, doctors and 
nurses, etc.). Boys and girls use costumes, dress-up sets, 
playsuits, old clothing, clothing accessories, such as hats and 
gloves, etc., in combination with the accoutrements of the 
profession (doctor and nurse instruments, cowboy spurs, 
holsters and guns, etc.) to reenact adult behavior. Enclosed as 
Exhibit 1 is a portion of an internal Mattel study compiled in 
1988, entitled ``CHILDREN'S PLAY PATTERNS--A Collective Review 
of What We Know About How Kids Play,'' which specifically 
discusses this type of play among 3 to 12 year old girls.
    For at least 50 years the toy industry has been 
manufacturing and marketing as toys, costumes, dress-up sets, 
playsuits and parts and accessories therefor, which are clearly 
not a form of wearing apparel; which are not durable, or even 
washable; which, generally, are either worn in conjunction with 
regular clothing, or which are made to be worn only during play 
and not during an extended period; which are sold primarily in 
toy stores or the toy departments of mass-merchandisers; and, 
which enable children to imitate adult behavior in role-
playing. These articles are generally distinguishable from the 
real articles which they imitate, by, among other things, their 
relatively inexpensive construction and price, their limited 
ability to be used for an extended period of time, their 
fanciful themes, and differences in sizing (often ``one size 
fits all'') from real apparel; the companies which manufacture 
them; and the manner in which they are marketed.
    Enclosed as Exhibit 2 are pages from various issues of 
``Playthings,'' the largest trade publication serving the toy 
industry. These excerpts, which date from 1970 to the present, 
illustrate the types of products described above, and clearly 
indicate that numerous toy companies have been manufacturing 
and marketing these products for an extended period. Even the 
company which is the chief proponent of H.R. 2151 is listed in 
these materials, placed a full-page advertisement in 
``Playthings,'' and maintains its sales office in the Toy 
Building, at 200 Fifth Avenue in New York.
    Enclosed as Exhibit 3 are pages from the 1997 catalogs of 
Mattel's subsidiary, Arco, illustrating the types of dress-up 
sets and accessories therefor which Mattel markets. Even a 
cursory examination of the articles in Exhibit 3 indicates that 
they are a type of product which is manufactured exclusively 
for use by children during role-playing, are sold in toy stores 
and toy departments of mass-merchandisers, and are not a type 
of wearing apparel.

III. Enactment of H.R. 2151 would result in higher prices for retailers 
    and consumers, which would discourage if not preclude continued 
    production, importation and sale of dress-up sets, costumes and 
    playsuits which the industry regards as a class or kind of toy.

    Enactment of H.R. 2151 would subject dress-up sets, 
costumes and playsuits which the industry regards as a class or 
kind of toy, now classified in Chapter 95, free of duty, to 
classification in Chapters 61 and 62, in the same tariff 
headings with regular wearing apparel, subjecting them to 
significant duty assessments.
    In addition, classification of these products as wearing 
apparel in Chapters 61 and 62, HTSUS, instead of in Chapter 95, 
would also subject them to quantitative restrictions (quotas), 
requiring the acquisition of visas in order to ship them to the 
United States. However, inquiries by doll fashions 
manufacturers abroad, who also produce dress-up sets, playsuits 
and costumes, have established that they would be unable to 
acquire visas for the exportation of their products to the 
United States, because their governments have advised them that 
such quotas are available only to textile and apparel companies 
and not to toy companies.
    Even if quota allotments and visas were available, there is 
usually a substantial charge associated with obtaining them, 
which would have to be added to the landed cost of the 
products, increasing the prices which retailers would have to 
pay for these articles.
    Most toy retailers work on narrow profit margins. Adding 
duty and quota charges to the landed cost of these products 
would in all likelihood result in retailers being unable to 
market dress-up sets, playsuits and costumes at a reasonable 
profit. Increases in the prices of these products to consumers 
would also be unacceptable. As a consequence, continued 
production of most dress-up sets and playsuits now marketed 
year-round for role-playing purposes, might have to be dropped, 
if they are reclassified in Chapters 61 and 62 and subjected to 
the duties applicable to regular wearing apparel.

IV. The enactment of H.R. 2151 is contrary to the agreement on textiles 
and clothing adopted by the United States as part of the Uruguay Round 
                  of Multilateral Trade Negotiations.

    As part of the Uruguay Round of Multilateral Trade 
Negotiations, the United States adopted several multilateral 
agreements. One of these agreements is the Agreement on 
Textiles and Clothing [the Agreement]. Article 4 of the 
Agreement, a copy of which is enclosed as Exhibit 4, contains 
the following provision in Paragraph 2:
    2. Members agree that the introduction of changes, such as 
changes in practices, rules, procedures and categorization of 
textile and clothing products, including those changes relating 
to the Harmonized System, in the implementation or 
administration of those restrictions notified or applied under 
this Agreement should not upset the balance of rights and 
obligations between the Members concerned under this Agreement; 
adversely affect the access available to a Member; impede the 
full utilization of such access; or disrupt trade under this 
Agreement. (Emphasis added)
    Clearly, changing the classification of merchandise 
(costumes, dress-up sets and playsuits) which is currently not 
subject to quota to insure that it is subject thereto is a 
change in practice, a change in the categorization of products 
and a change relating to the Harmonized System. Additionally, 
as demonstrated above, such a change will clearly disrupt trade 
in this merchandise. Accordingly, such a change in 
classification is contrary to the Agreement, and, if enacted, 
would probably result in the United States being the subject of 
complaints filed with the appropriate body of the World Trade 
Organization by countries which export this merchandise.

  V. It is premature at this time, while the issue is pending before 
Customs headquarters, for Congress to consider legislation which would 
mandate the classification of all costumes, dress-up sets and playsuits 
                     in chapters 61 and 62 , HTSUS.

    On December 22, 1997, the United States Customs Service had 
a notice published in the Federal Register, a copy of which is 
enclosed as Exhibit 5, advising the public that a domestic 
interested party had filed a Petition pursuant to 19 U.S.C. 
1516, contesting the current tariff classification of certain 
costumes, and requesting comments from the public concerning 
the proper classification of this merchandise. A copy of the 
Petition filed in this matter with the Customs Service is 
enclosed as Exhibit 6. The Petition, dated July 7, 1997, was 
filed on behalf of Rubie's Costume Co., Inc. of Richmond Hill, 
New York, which is also believed to be the party which 
requested H.R. 2151.
    Notably, in arguing that all costumes are classifiable in 
Chapters 61 and 62, HTSUS, the Petition concerns itself only 
with merchandise which the Petitioner refers to as 
``costumes,'' and does not discuss or refer to the items 
manufactured by the toy industry which are commonly referred to 
as ``dress-up sets'' or ``playsuits,'' and which are 
principally designed for the amusement of children and marketed 
exclusively as toys. Rather, by omitting any discussion of 
dress-up sets and playsuits, and by concentrating on the 
similarities between costumes and regular wearing apparel, the 
Petition implies that there is little or no basis for 
classifying, in Chapter 95, those particular dress-up sets and 
playsuits which constitute a class or kind of toys. For 
example, in claiming that the current tariff classification of 
certain costumes is erroneous, the Petition claims on Page 13, 
in pertinent part, as follows:
    It is clear that costumes should be classified as ``fancy 
dress of textiles'' that fall within Chapters 61 and 62, 
[HTSUS] and are expressly excluded from Chapter 95. (Emphasis 
added)
    If, as asserted in the Petition, it is ``clear'' that the 
proper tariff classification of all costumes, dress-up sets and 
playsuits is in Chapters 61 and 62, HTSUS, it is also clearly 
unnecessary and superfluous to request legislation requiring 
such a result. Rather, the Petitioner should await a decision 
from the Customs Service and/or the Courts before taking up the 
valuable time and resources of the Congress on such a matter.
    While a full discussion of this matter is beyond the scope 
of these comments, Mattel is of the opinion that, at a minimum, 
the types of dress-up sets and playsuits which are manufactured 
specifically for sale in toy stores and toy departments of 
mass-merchandisers clearly constitute a class or kind of toy, 
and are properly classifiable in Chapter 95, HTSUS. Comments 
concerning this assertion will be submitted to the Customs 
Service in response to the Domestic Interested Party Petition. 
Once the Customs Service, and, if litigated, the Courts, issue 
determinations concerning the scope of the various HTSUS 
provisions involved, it may well be the case that this matter 
will have been clarified to the satisfaction of all parties 
involved. If not, Congress may then wish to examine this issue 
in more detail.

                            VI. Conclusion.

    For at least 50 years, the toy industry has been 
manufacturing and marketing articles specifically for the 
amusement of children during play, which are commonly known as 
dress-up sets and playsuits, and which are clearly a class or 
kind of toy. The intent of H.R. 2151 is to have all costumes, 
as well as dress-up sets, playsuits and parts and accessories 
thereof, classified in Chapters 61 or 62, HTSUS. The 
reclassification of these articles in Chapters 61 and 62 would 
undeniably increase the cost of such products to toy companies, 
retailers and consumers, to a point where the articles would no 
longer be marketed or purchased. If enacted, H.R. 2151 is 
likely to result in toy manufacturers being unable to obtain 
the necessary textile visas for products which the industry 
regards as toys. Moreover, enactment of H.R. 2151 would be 
clearly contrary to the Agreement on Textiles and Clothing to 
which the United States is a party. Finally, because the 
proponents of H.R. 2151 have claimed in a Petition filed with 
the Customs Service that it is ``clear'' that all costumes are 
classifiable in Chapters 61 and 62, HTSUS, consideration of 
this legislation at this time is premature.
    For the reasons discussed hereinabove, it is apparent that 
H.R. 2151 is a highly controversial piece of legislation which 
should not be enacted or included in any omnibus tariff Bill 
being considered by the Ways and Means Trade Subcommittee.
            Sincerely yours,
                                                Kelly Bundy
                                    Manager, Customs Administration

[Attachments are being held in the Committee's files.]
      

                                

 H.R. 2236

    To suspend until January 1, 2000, the duty on Irganox 1520.

                         No comments submitted.

      

                                

 H.R. 2237

    To suspend until January 1, 2000, the duty on Irganox 1425.

                         No comments submitted.

      

                                

H.R. 2238

    To suspend until January 1, 2000, the duty on Irganox 565.

                         No comments submitted.

      

                                

      

 H.R. 2239

    To suspend until January 1, 2000, the duty on Irganox 
1520LR.

                         No comments submitted.

      

                                

 H.R. 2240

    To suspend until January 1, 2000, the duty on Irgacure 184.

                         No comments submitted.

      

                                

 H.R. 2241

    To suspend until January 1, 2000, the duty on Darocure 
1173.

                         No comments submitted.

      

                                

 H.R. 2242

    To suspend until January 1, 2000, the duty on Irgacure 819.

                         No comments submitted.

      

                                

 H.R. 2243

    To suspend until January 1, 2000, the duty on Irgacure 369.

                         No comments submitted.

      

                                

 H.R. 2244

    To suspend until January 1, 2000, the duty on Irgacure 
1700.

                         No comments submitted.

      

                                

 H.R. 2245

    To suspend until January 1, 2000, the duty on Irgacor 
252LD.

                         No comments submitted.

      

                                

 H.R. 2246

    To suspend until January 1, 2000, the duty on Irgacor 1405.

                         No comments submitted.

      

                                

 H.R. 2268

    To suspend temporarily the duty on a certain chemical.

                         No comments submitted.

      

                                

 H.R. 2269

    To suspend temporarily the duty on a certain chemical.

                         No comments submitted.

      

                                

 H.R. 2270

    To suspend temporarily the duty on a certain chemical.

                         No comments submitted.

      

                                

 H.R. 2271

    To suspend temporarily the duty on a certain chemical.
      

                                

H.R. 2287

    To apply the rates of duty effective after December 31, 
1994, to certain water resistant wool trousers that were 
entered, or withdrawn from warehouse for consumption, after 
December 31, 1988, and before January 1, 1995.

                         No comments submitted.

      

                                

 H.R. 2322

    To suspend the duty on the organo-phosphorus compound ACM 
until January 1, 2000.

                         No comments submitted.

      

                                

 H.R. 2324

    To suspend the duty on the synthetic organic coloring 
matter C.I. Pigment Yellow 109 until January 1, 2000.

                         No comments submitted.

      

                                

 H.R. 2325

    To suspend the duty on the synthetic organic coloring 
matter C.I. Pigment Yellow 110 until January 1, 2000.

                         No comments submitted.

      

                                

 H.R. 2326

    To suspend the duty on the organic chemical 
parachlorobenzonitrile until January 1, 2000.

                         No comments submitted.

      

                                

 H.R. 2334

    To suspend temporarily the duty on ferroboron.
      

                                

Statement of AlliedSignal Inc. on H.R. 2334

Legislation to Temporarily Suspend the U.S. Duty on Ferroboron As 
Provided for in 7202.99.50 of the Harmonized Tariff Schedule of the 
United States

January 26, 1998

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2334, introduced by Representative Rodney P. Frelinghuysen 
of New Jersey. This measure provides for the temporary 
suspension of the U.S. import duty on ferroboron, which comes 
under 7202.99.50 of the Harmonized Tariff Schedule of the 
United States.
    Granting a suspension of the duty on ferroboron is 
justified and appropriate. To our knowledge there are no 
domestic producers of ferroboron capable of manufacturing to 
our product specifications. For this reason passage of H.R. 
2334 would not have a detrimental impact on the domestic 
ferroalloy industry. Furthermore, the key end product into 
which this most expensive, yet essential, raw material is 
incorporated would be able to be priced more competitively in 
important export markets like China and India. This is vital to 
the success of that product, which saves energy and reduces 
harmful greenhouse gas emissions, and to the livelihoods of 
those Americans who produce it and who are heavily dependent on 
its ability to succeed as an export.
    This statement is intended to describe: the product 
proposed for duty suspension; the end products into which 
ferroboron is incorporated, and some of their uses; the 
importance of the duty suspension to the export competitiveness 
of one of the principal U.S.-manufactured products into which 
ferroboron is incorporated; and, the merits of and 
justification for granting the duty suspension as proposed.

                    Description of AlliedSignal Inc.

    AlliedSignal manufactures advanced technology products for 
the aerospace, automotive and other markets. Some of our main 
aerospace products are jet propulsion engines, commercial 
avionics such as the enhanced ground proximity warning 
collision-avoidance system, and small-scale power systems. Our 
automotive product names include Fram filters, 
Autolite sparkplugs, Prestone car care 
products, and Garrett turbochargers for passenger 
cars, light trucks and heavy equipment. We also are a leading 
producer of nylon and industrial fibers, specialty chemicals, 
and advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal has some 70,500 employees worldwide, 
approximately 50,000 of whom are in the United States. The 
company has manufacturing operations throughout the United 
States, with principal facilities located in Arizona, 
California, Missouri, Maryland, Ohio, Virginia, New Jersey, 
Kansas and South Carolina.

                Description of the Product and Its Uses

    Ferroboron is a boron-containing ferroalloy used by 
AlliedSignal as a major raw material in the production of 
amorphous metal. It is the single most expensive component of 
the amorphous metal manufacturing process. Boron-containing 
amorphous metals, among other purposes, are used by the 
electric utilities industry to enhance the efficiency of 
electric power distribution transformers. Distribution 
transformers equipped with boron-containing amorphous metal 
cores are significantly more energy-efficient and less 
environmentally-degrading than transformers employing silicon 
steel cores. Boron-containing amorphous metals also have 
applications in computer and laser power supplies, retail 
security systems, and high frequency transformers and switches.
    In addition to the manufacture of amorphous metal, 
ferroboron is also used as a hardening agent in the production 
of certain types of steel.

              Description of AlliedSignal Amorphous Metal

    AlliedSignal pioneered the development and 
commercialization of amorphous metal ribbon. This material 
exhibits a structure in which the metallic atoms occur in a 
random pattern. As opposed to the rigid grain structure of 
silicon steel, this unique ``amorphous'' structure enables much 
easier magnetization and de-magnetization. The extent of the 
energy losses that occur in a transformer core is determined by 
how easily the core can switch magnetization: improved 
switching capability translates into lower core loss. This is 
the key to the Amorphous Metal Distribution Transformer's 
(AMDT) effectiveness in sharply reducing the no-load losses 
that occur in transformers' magnetic cores, and the greenhouse 
gas emissions associated with the production of the wasted 
energy. Ferroboron is the key raw material enabling both the 
production and the superior performance of amorphous metal 
ribbon.
    AMDTs constructed with boron-containing amorphous metal 
cores yield 60-80% lower no-load loss than transformers 
employing silicon steel cores. Further, the corollary benefit 
of AMDT use is to reduce greenhouse gas emissions associated 
with electric power production. As AMDTs would reduce core 
energy losses by 60-80%, CO2 and SO2 emissions associated with 
these losses are reduced similarly because fuel consumption 
(typically coal) is reduced.
    (Note: A transformer's ``core'' is its ``engine'' or 
``heart.'' Accordingly, it determines the energy-efficiency and 
environmental performance characteristics of the transformer 
into which it is integrated. The core's composition or 
``material''--either boron-containing amorphous metal or 
silicon steel--is the heart of the core.)

  Export Potential and Competitiveness Issues of Amorphous Metal-Core 
                              Transformers

    The benefits and performance of AMDTs are unquestioned, 
having been conclusively demonstrated in the US, Japan and many 
other countries. Vital growing U.S. export markets--e.g. China 
and India--are also the most logical target markets for AMDTs. 
Two of the primary areas of focus for such countries, in terms 
of their power/energy infrastructure development, are enhancing 
energy conservation efforts and reducing greenhouse gas 
emissions. Companies with leading-edge technologies designed to 
positively address these two areas will be well situated to 
seize export opportunities in these markets.
    For example, in May 1996 the Chinese State Planning 
Commission, State Economic and Trade Commission, and State 
Science and Technology Commission issued a joint energy 
conservation policy outline for China, something AlliedSignal 
had strongly encouraged. This outline stated the obvious need 
to save energy in China, and noted some means to that end. It 
specifically recommended AMDTs as a way to achieve these goals.
    While the benefits of AMDT use are tangible and 
significant, they and the extensive research and development 
that has yielded them come at a cost. An amorphous metal 
transformer has an initial cost 20-30% higher than the 
relatively energy-wasting and environmentally-unfriendly 
transformers it seeks to replace. Fortunately, because of its 
many benefits, the total owning cost of an amorphous metal 
transformer over its 20-30 year life is far lower than the 
initially-cheaper competing product.
    Regrettably, notwithstanding the fact that the overall 
economics are attractive and favor AMDTs, the initial higher 
cost can deter the purchase of the more efficient and 
environmentally-beneficial transformers. This is especially 
true in countries where, while the benefits of AMDTs are most 
direly needed, potential customers are most negatively impacted 
by the ``initial cost'' issue. Suspending the import duty on 
the raw material bearing much responsibility for this initial 
cost disadvantage would reap a significant impact on the cost-
competitiveness of the very beneficial end product.

        Suspending the Duty on Ferroboron is Warranted and Vital

    To the best of AlliedSignal's knowledge--and we are by far 
the single largest U.S. customer/consumer of the ferroboron 
subject to H.R. 2334--there is no known U.S. manufacture of 
ferroboron capable of satisfying AlliedSignal's demands for 
this product.
    To date AlliedSignal has not been able to demonstrate a 
substitute for ferroboron in the manufacture of amorphous 
metal. Ferroboron is a required component allowing the 
production of amorphous metals and allowing AMDTs their energy-
saving and greenhouse gas-reducing qualities. The ferroboron on 
which the duty suspension is sought is not merely incidental to 
the production of amorphous metal and the superior performance 
of an AMDT; it is integral. Because there is no substitute 
domestically-manufactured product currently benefiting from the 
present five percent duty rate on ferroboron, no adverse impact 
on the domestic ferroalloy industry is anticipated by granting 
this suspension.

                                Summary

    Reducing the cost of an amorphous metal transformer's most 
important and costly raw material, by suspending the import 
duty paid on it, would go a long way toward enhancing the 
export competitiveness of the end product. It would further 
encourage prospective customers to procure the most advanced 
and beneficial transformer technology available, and not merely 
repeat the mistakes of the past by continuing to use inferior 
technologies, with all attendant negative repercussions.
    This would yield positive results both in terms of 
increasing energy conservation and decreasing environmental 
degradation in the developing nations that represent the most 
promising market opportunities for an important product made by 
American workers.
    Thank you again for the opportunity to comment.
      

                                

      
 H.R. 2336

    To temporarily decrease the duty on certain industrial 
nylon fabrics.
      

                                

Statement of the American Textile Manufacturers Institute

On Miscellaneous Trade and Tariff Legislation--H.R. 2336

    This is in response to Ways and Means Committee Release TR-
19, dated December 22, 1997, requesting comments on certain 
miscellaneous trade and tariff proposals. The American Textile 
Manufacturers Institute (ATMI) is the trade association for the 
domestic textile industry. Our members operate in more than 30 
states and account for more than 80 percent of all textile 
fibers consumed in the United States.
    ATMI would like to express our opposition to H.R. 2336, 
which is item #24 in the list of bills contained in TR-19. This 
legislation would reduce the duty from 15.6 percent to 6.7 
percent on imports of certain filament nylon woven fabrics 
currently classified under tariff schedule heading 5407.41.00, 
which generally includes woven fabrics containing 85 percent or 
more by weight of filaments of nylon or other polyamides.
    An ATMI member company is in the process of preparing to 
produce the fabric defined in H.R. 2336 for use in commercial 
quantities following customer evaluation of sample quantities. 
This domestic manufacturer believes that this highly 
specialized fabric represents an opportunity for increased 
sales and domestic production. Therefore, ATMI is opposed to 
congressional passage of H.R. 2336.
                                               Carlos Moore
                                           Executive Vice President
                                                   January 26, 1998
      

                                

 H.R. 2339

    Relating to the tariff treatment of nuclear fuel 
assemblies.
      

                                

Statement of Robert S. Bell, Jr., Vice President & General Manager, ABB 
CENO, Windsor, Connecticut and Dr. Bruce J. Kaiser, Vice President, ABB 
CENO, Hematite, Missouri

In Support of H.R. 2339, to Correct the Tariff Treatment of Nuclear 
Fuel Assemblies

                                Summary:

    The Harmonized Tariff Classification System inadvertently 
increased the duty more than five-fold on pelletized uranium 
oxide contained in zirconium tubing, from the rate that had 
been in place since 1970. The purpose of H.R. 2339 is to 
restore the 1970 rate and refund the unintended duty that has 
been paid.

 Tariff Classification History for Pelletized Uranium Oxide/Zirconium 
                                 Tubing

    In 1970 the U.S. Customs Service decided to distinguish 
between: (1) reactor-ready nuclear fuel assemblies; and (2) 
pelletized uranium oxide contained in zirconium tubing that is 
not reactor-ready. The Tariff Schedules of the United States 
(TSUS) then in use had no specific classification for nuclear 
reactors or fuel assemblies. The Customs Service applied the 
following TSUS classifications:
    --Nuclear Fuel Assemblies: 660.10 TSUS (``steam and other 
vapor generating boilers . . . and parts thereof'')
    --Pelletized Uranium Oxide: 422.50 TSUS
    --Zirconium Tubing: 658.00 TSUS
    According to research by the Customs Service, the 1970 
decision governed importation of nuclear fuel assemblies and 
pelletized uranium oxide in zirconium tubing without change 
until the Harmonized Tariff Classification System (HTS) went 
into effect in 1989.
    HTS was intended to standardize tariff classifications 
worldwide, without increasing duty on any item. Understandably, 
however, HTS created a U.S. heading for nuclear reactors and a 
subheading for ``nuclear fuel elements.'' Inadvertently the 
subheading includes not only reactor-ready nuclear fuel 
assemblies, but also pelletized uranium oxide in zirconium 
tubing that would have been classified pre-HTS under 422.50/
658.00 TSUS.
    Pre-HTS, pelletized uranium 422.50 TSUS was free of duty; 
zirconium tubing 658.00 TSUS was dutiable at 5.5 percent. These 
classification numbers were simply converted to HTS numbers at 
the same rates:


                                                                        
------------------------------------------------------------------------
                                   TSUS    TSUS                     HTS 
              Item                Number   Rate     HTS Number     Rate*
------------------------------------------------------------------------
Pelletized Uranium Oxide.......   422.50       0    2844.20.0010       0
Zirconium Tubing...............   658.00    5.5%    8109.90.0000    5.5%
------------------------------------------------------------------------
* The GATT Agreement which became effective on January 1, 1995 reduces  
  tariff rates on thousands of items in equal annual increments over    
  five years. The rate for 8109.90.000 HTS will be 3.7 percent in 1999  
  and is thus 4.8 percent in 1996 and 4.4 percent in 1997. The rate for 
  8401.30.0000 HTS is scheduled to be 3.3 percent in 1999. However,     
  annual reductions under 8401 HTS and other Chapter 84 headings were   
  made contingent upon an international accord on government procurement
  rules; the rate for 8401.30.0000 is 5.9 percent in 1996 and 5.2       
  percent in 1997.                                                      

    The rate for the new HTS subheading for nuclear fuel 
elements was 6.5 percent. Since the uranium oxide is about 80 
percent of the value, the new HTS classification for nuclear 
fuel elements increased the duty on pelletized uranium oxide in 
zirconium tubing by more than five-fold.


                                                                        
------------------------------------------------------------------------
                                                                    HTS 
                      Item                          HTS Number     Rate*
------------------------------------------------------------------------
Nuclear Reactors/Fuel Elements..................    8401.30.0000    6.5%
------------------------------------------------------------------------
* The GATT Agreement which became effective on January 1, 1995 reduces  
  tariff rates on thousands of items in equal annual increments over    
  five years. The rate for 8109.90.000 HTS will be 3.7 percent in 1999  
  and is thus 4.8 percent in 1996 and 4.4 percent in 1997. The rate for 
  8401.30.0000 HTS is scheduled to be 3.3 percent in 1999. However,     
  annual reductions under 8401 HTS and other Chapter 84 headings were   
  made contingent upon an international accord on government procurement
  rules; the rate for 8401.30.0000 is 5.9 percent in 1996 and 5.2       
  percent in 1997.                                                      

    ABB CENO, headquartered in Windsor, Connecticut, with a 
plant in Hematite, Missouri, has paid $1.8 million in 
unintended duty as a result of the inadvertent HTS 
reclassification. Five entries occurred for contract delivery 
dates in 1996 and 1997:


                                                                        
------------------------------------------------------------------------
                Entry Date                          Entry Number        
------------------------------------------------------------------------
January 16, 1996..........................  062-230014-5                
February 13, 1996.........................  062-230085-5                
November 25, 1996.........................  839-4030989-7               
December 2, 1996..........................  839-4031053-1               
January 21, 1997..........................  839-4031591-0               
------------------------------------------------------------------------

    These will be the only such entries for ABB CENO because 
product for all subsequent orders will be manufactured in the 
U.S.

                         Operations of ABB CENO

    In the 1980s, ABB Atom Inc. was established in the United 
States to market a type of nuclear fuel assemblies for use in 
reactors at U.S. utilities. These nuclear fuel assemblies were 
being produced very successfully for use in Europe by ABB Atom 
Inc.'s parent in Vasteras, Sweden.
    The first step in ABB Atom Inc.'s business plan was to 
reach agreements with several utilities to test the nuclear 
fuel assemblies. If the testing programs succeeded, ABB Atom 
Inc. would establish manufacturing facilities in the U.S. to 
produce commercial quantities. Subsequently, ABB Atom Inc.'s 
business was taken over by ABB Combustion Engineering Nuclear 
Operations (ABB CENO), headquartered in Windsor, Connecticut.
    The early stages of the testing program were so successful 
that the number of testing agreements was reduced. ABB CENO 
planned to invest in the upgrade of its nuclear fuel 
manufacturing plant in Hematite, Missouri to pelletize uranium 
oxide for that type of nuclear fuel assemblies, and was awarded 
a contract to supply the Washington Public Power Supply Stem 
(WPPSS).
    Unfortunately the capacity of ABB CENO's Missouri plant to 
pelletize uranium oxide for the WPPSS type of nuclear fuel 
assemblies could not be established for the first deliveries 
due under that contract in 1996 and 1997.
    ABB CENO was able to pelletize the uranium oxide at the 
Missouri plant for the February, 1998 delivery under the WPPSS 
contract. ABB CENO has received a contract to supply the Public 
Service Electric and Gas Company (PSE&G) at Hope Creek, New 
Jersey and is a strong contender for other contract awards.
    The February, 1997 contract delivery to WPPSS will be the 
last to involve pelletization of enriched uranium in Sweden. 
Assembly will continue to be done here, with the welding 
process Hematite uses for other nuclear fuel assemblies being 
phased into use for the WPPSS deliveries over the next three 
years.

                               Conclusion

    From 1970 until the creation of a new heading and 
subheadings under the Harmonized Tariff Classification System 
(HTS) in 1989, the U.S. Customs Service classified shipments of 
bundles of nuclear fuel rods distinctly from nuclear fuel 
assemblies, applying the duty-free rate to the uranium oxide 
and the rate of 5.5 percent to the zirconium tubing. The new 
HTS classification has had the effect of increasing the duty on 
ABB CENO's bundles by more than five-fold--despite the intent 
of HTS not to increase duty on any item.
    The unintended duty increase imposed on the 1996 and 1997 
WPPSS deliveries of ABB CENO's nuclear fuel bundles amounts to 
$1.8 million. Legislation to restore the 1970 rate and refund 
the unintended duty is a matter of equity.
    The unintended duty has been a significant financial burden 
to the start-up of the ABB CENO business. Legislation to refund 
the unintended duty is necessary to clarify that the U.S. is 
hospitable to the creation of U.S. jobs and manufacturing 
plants to make goods here that would otherwise be imported. 
Refusal to enact the legislation would send the wrong signal 
worldwide.
    If the HTS is not corrected and the unintended duty 
increase refunded, there could be U.S. job losses, with 
profound significance. ABB CENO's business plan, including the 
testing agreements and the WPPSS and PSE&G contracts, is based 
on the use of uranium which has been enriched in the U.S. 
However, the Swedish affiliate company could be competitive in 
the U.S. market if it used enriched uranium from the former 
Soviet States. Refunding the unintended duty would put ABB CENO 
in a better position with respect to that company.
    For the sake of equity and U.S. jobs, legislation to 
correct the HTS and refund the unintended duty of $1.8 million 
on pelletized uranium oxide/zirconium tubing should be enacted 
into law as soon as possible.
      

                                

 H.R. 2498

    To amend the Harmonized Tariff Schedule of the United 
States to extend to certain fine jewelry certain trade benefits 
of insular possessions of the United States.

                         No comments submitted.

      

                                

H.R. 2520

    To suspend the duty on halofenozide until January 1, 2001.

                         No comments submitted.

      

                                

H.R. 2521

    To suspend the duty on modified secondary and modified 
secondary-tertiary amine phenol/formaldehyde copolymers until 
January 1, 2001.

                         No comments submitted.

      

                                

 H.R. 2576

    To suspend the duty on -Bromo--
nitrostyrene until January 1, 2001.

                         No comments submitted.

      

                                

 H.R. 2583

    To amend the Tariff Act of 1930 with respect to the marking 
of finished golf clubs and golf club components.

                         No comments submitted.

      

                                

 H.R. 2686

    To suspend temporarily the duty on beta hydroxyalkylamide.

                         No comments submitted.

      

                                

 H.R. 2770

    To amend the Tariff Act of 1930 to provide for a deferral 
of the duty on large yachts imported for sale at boat shows in 
the United States.

                         No comments submitted.

      

                                

 H.R. 2771

    To amend the Harmonized Tariff Schedule of the United 
States relating to the definition of raw value for purposes of 
raw sugar import tariff rate quota.
      

                                

                       Maloney Commodity Services, Inc.    
                                Stamford, Connecticut 06902
                                                    January 8, 1998

Mr. A. L. Pete Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

Subject: H.R. 2771

    We refer to the ``Advisory'' from Chairman Crane dated December 22, 
1997, No. TR-19 announcing Requests for Written Comments on Additional 
Miscellaneous Trade and Tariff Legislation.
    Included in the ``Advisory'' is Paragraph 33:
    ``H.R. 2771 would amend Additional U.S. Note 5 to Chapter 17 of the 
HTS relating to the definition of raw value for purposes of the raw 
sugar import tariff-rate quota.''
    We support H.R. 2771 in the language in which it is now written 
which was based on our original preparation of same and its sponsorship 
by Congressman Christopher Shays at our request. We respectfully and 
formally request, therefore, the inclusion of this provision in the 
Miscellaneous Trade and Tariff Bill to be introduced by Chairman Crane 
in the Second Session of the 105th Congress.
    This letter is also being submitted with an accompanying 3.5-inch 
diskette, as instructed in the ``Advisory.''
    This bill is non-controversial and revenue neutral to revenue 
positive. It is either supported or not objected to by all facets of 
the sugar industry both domestic and foreign. It technically corrects 
an inequity in the manner by which the U.S. Customs Service measures, 
calculates and records the polarization (or sweetness) conversion 
factor in the imported raw cane sugar tariff rate quota, TRQ, so that 
it conforms to the same commercial method by which ``raw value'' is 
treated, calculated, recorded and indeed ``paid for,'' by U.S. sugar 
refineries.
    Further, this bill conforms to the U.S. sugar refineries' 
commercial contracts and the No. 14 rules of the Coffee, Sugar and 
Cocoa Exchange, Inc., New York, with respect to sugars with polarity of 
99.0 degrees or less. Since the HTSUS defines raw sugar as sugar having 
polarity of 99.5 degrees or less, the bill would extend the raw value 
conversion factor to the additional one-half degree, but would not 
affect the No. 14 rules or the refiners' obligations to make payments 
for this one-half degree under their contracts.
    Simply stated, it is the conversion factor rate from MTRV (Metric 
Tons Raw Value) (the higher nominal quantity figure) to the actual 
shipped quantity MTCW (Metric Tons Commercial Weight) for which the 
foreign country quota holder is being unjustly penalized. U.S. sugar 
refiners universally pay 2.75 percent premium for raw sugar which 
polarizes at 98 degrees. Yet U.S. Customs requires that the raw value 
be assessed 3.50 percent for the same level of polarization (MTRV). In 
other words U.S. Customs' charge against a country's quota comprehends 
a higher polarization or sweetness factor for the same cargo than all 
U.S. refineries commercially pay. As such, the Customs formula does not 
reflect economic reality and therefore unjustly penalizes foreign 
shippers for the differences.
    Since this conversion factor for ``commercial raw value'' is 
included in the HTSUS headnote authority (Chapter 17), it has the 
effect of law, and only a change in legislation can rectify this 
inequity in the U.S. raw cane sugar tariff rate quota (TRQ).
    Rather than delve into all the details of this suggested change--
please consider the following:
    On an estimated fiscal year quota of 2,000,000 MTRV using 1.035 
percent as the conversion factor, basis 98 degrees (which is presently 
in effect), the shipment quantity would be 1,932,367 MTCW. Using the 
more correct and realistic 1.0275 percent method as the conversion 
factor, the shipment quantity would be 1,946,472 MTCW. Using an 
approximate U.S. quota price of $.20 per pound, FOBST country of 
origin, or about $440 per MTCW, the difference is only 14,105 metric 
tons. Hence as far as the domestic sugar producers are concerned this 
quota quantity increase is infinitesimal, whereas to the quota holding 
foreign sugar producers as a whole their 14,105 metric tons at $440.00 
per MT equals and represents $6,206,200, and it does not cost the U.S. 
government one penny. It may even produce revenue to the extent that 
these sugars could be dutiable--depending on origin.
    Naturally, we are seeking the earliest possible date for this bill 
to become effective.
    For your information and guidance, all the individuals at USDA and 
USTR who review, draft and operate this TRQ are familiar with this 
bill, as are their respective legal counsels at USDA and USTR.
    In conclusion, we repeat and reiterate our support for H.R. 2771.
    Thank you in advance for your prompt consideration and action to 
our request.
            Sincerely,
                                          Robert F. Maloney
                                                          President

RFM:jlm

cc: The Honorable Christopher Shays, Attn: Mr. Joel White
      

                                

 H.R. 2857

    To suspend the duty on 2,6-Dimethyl-m-Dioxan-4-ol Acetate 
until January 1, 2001.

                         No comments submitted.

      

                                

 H.R. 2899

    To amend the Harmonized Tariff Schedule of the United 
States to provide for reduced duty treatment for certain fully 
assembled bicycle wheels.
      

                                

                                   Hed Cycling Products    
                                  White Bear Lake, MN 55110
                                         January 23, 1998 (3:30 PM)

A.L. Singleton
Chief of Staff
Committee on Ways and Means, U.S. House of Representatives

    Dear Mr. A.L. Singleton

    I was just informed today (January 23, 1998 3:30 PM) of the 
proposed amendment of H.R. 2899 This would amend Chapter 87 of the HTS 
by inserting a new subheading with the article description for 
subheading 8714.97.00 for bicycle wheel assemblies consisting of rim, 
carbon-fiber spokes, and hub flange assembled in one piece, or the 
above plus a rear freewheel/free hub, to provide an MFN duty trate of 
1.5 percent. The currant rate is 5 percent and I feel the lowered rate 
would create a problem for my company. It appears this bill is written 
for a single company who has recently moved their manufacturing 
facilities to Mexico.
    I have been manufacturing bicycle wheels for 12 years and if you 
lower the duty rate it will create unfair trade for my company. I am a 
small wheel manufacturer in Minnesota and by allowing less duty instead 
of more hurts my business. I was only informed today about this 
proposed bill and I am very much against it. Please contact me if you 
have anymore questions.
            Sincerely,
                                                   Anne Hed
                                         Owner Hed Cycling Products
      

                                

                        Innovations in Composites, Inc.    
                                            Vista, CA 92083
                                                   January 28, 1998

A.L. Singleton
Chief of Staff, House Ways and Means Committee
U.S. House of Representatives
1102 Longsworth House Office Building
Washington, DC 20515

    Dear Mr. Singleton:

    We take strong issue with H.R. Bill 2899, by Congressmen Shays and 
Maloney of Connecticut proposing a reduction in tariff for the 
importation of carbon fiber bicycle wheels. As a company that produces 
such wheels in the United States, we feel strongly that this amendment 
bill gives unfair advantage to only one specific company.
    Our company, Innovations in Composites, produces a carbon-fiber 
wheel brand called Spin wheels in the United States of America. Mr. 
Maloney and Shays' bill gives unfair competitive advantage to Spinergy, 
the only other carbon-fiber wheel company with market share in the US 
who moved their manufacturing to Mexico. This company, of course, 
maintains an office in Congressman Maloney and Shays' district.
    Innovations in Composites had the opportunity to close up shop in 
the United States and move operations to Mexico just like Spinergy. We 
chose to stay and keep our American workers. Spinergy did not, as they 
became part of ``that giant sucking sound'' and moved to Mexico. Now 
that they have chosen to leave the US worker behind, they are asking 
through H.R. Bill 2899 to cheat that same worker from across the 
border. This is having their cake and eating it too and is just plain 
wrong no matter how you cut it.
    Briefly: 1) We are a competing company who manufactures one piece 
carbon fiber bicycle wheels in the USA, and provide jobs for Americans 
in manufacturing and sales.
    It should be noted that Mr. Maloney's aide who wrote H.R. 2899 was 
not informed of our company's existence or of our Spin wheels. We are 
Spinergy's #1 competitor.
    2) Spinergy operates a manufacturing facility in Mexico. A 
successful attempt at passing this bill simply bolsters their company's 
profitability, by lowering import tariffs by 8.5%.
    3) If the amendment does pass, it benefits one company and one 
company only. It hurts other American players in the marketplace, who 
comply with stringent OSHA regulations, higher wage requirements, and 
face unfair competition if the tariffs are lowered. In this way, 
American manufacturing jobs face a serious threat, but not in the way 
that Mr. Maloney is trying to aide his flailing constituent company.
    While it's in the interest of the Connecticut congressmen to keep 
the pork in their district, we feel an act of Congress should benefit 
all sections of the USA, not one particular company in one voting 
district. The North American Free Trade Agreement has a phase in period 
that should not be adjusted to suit a single constituent of a wealthy 
district.
    Please feel free to contact me.
            Best regards,
                                                 Kirk Jones
                                                          President
      

                                

H.R. 3083

    To suspend temporarily the duty on Grilamid TR90.

                         No comments submitted.

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