[WPRT 106-8]
[From the U.S. Government Publishing Office]


106th Congress 
 2d Session                 COMMITTEE PRINT                       WMCP:
                                                                  106-8
_______________________________________________________________________

                                     


                         SUBCOMMITTEE ON TRADE

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                               __________

                            WRITTEN COMMENTS

                                 ON THE

 
 MISCELLANEOUS CORRECTIONS TO TRADE LEGISLATION AND MISCELLANEOUS DUTY 
                            SUSPENSION BILLS





                                     
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

                                     
                           FEBRUARY 18, 2000

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

                                  -----
                    U.S. GOVERNMENT PRINTING OFFICE
60-253 CC                   WASHINGTON : 2000


                      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        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
WES WATKINS, Oklahoma                LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              SANDER M. LEVIN, Michigan
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  MICHAEL R. McNULTY, New York
JIM RAMSTAD, Minnesota               WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington            XAVIER BECERRA, California
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 August 12, 1999, announcing request for written 
  comments on miscellaneous corrections to trade legislation and 
  miscellaneous duty suspension bills............................     1

                                 ______

H.R. 194:
    California Association of Winegrape Growers, Sacramento, CA, 
      Karen Ross, letter.........................................    10
    National Juice Products Association, Tampa, FL, Ansley 
      Watson, Jr., statement and attachments.....................    14
    Thomas, Hon. William M., a Representative in Congress from 
      the State of California, statement.........................    18
    Welch Foods, Inc., Concord, MA, and National Grape 
      Cooperative Association, Inc., Westfield, NY, Vivian S.Y. 
      Tseng, joint letter........................................    18
H.R. 511: ABB Combustion Engineering Nuclear Power, Inc., Robert 
  S. Bell, Jr., Windsor, CT, and Gilles Page, Hematite, MO, 
  statement......................................................    20
H.R. 810: Sawyer, Hon. Tom C., a Representative in Congress from 
  the State of Ohio; Hon. Ralph Regula, a Representative in 
  Congress from the State of Ohio; Hon. Sherrod Brown, a 
  Representative in Congress from the State of Ohio; Hon. Tony P. 
  Hall, a Representative in Congress from the State of Ohio; and 
  Hon. Steven C. LaTourette, a Representative in Congress from 
  the State of Ohio, joint letter................................    22
H.R. 1026: Jade International, Inc., Folcroft, PA, Anthony 
  Castrovillo, letter............................................    23
H.R. 1360:
    American Fiber Manufacturers Association, Inc., Paul T. 
      O'Day, letter..............................................    24
    American Sheep Industry Association, Englewood, CO, Peter 
      Orwick, letter and attachment..............................    24
    American Textile Manufacturers Institute, statement and 
      attachment.................................................    25
    Bishop, B.H., Pendleton Woolen Mills, Portland, OR, letter...    38
    Bowen, G.L., III, Georgia Textile Manufacturers Association, 
      Inc., Atlanta, GA, letter..................................    32
    Burlington Industries, Inc., Greensboro, NC, statement.......    26
    Carleton Woolen Mills, Inc., Winthrop, ME, J. Marshall 
      McDuffie, letter...........................................    28
    Cenarrusa, Hon. Pete T., Secretary of State, State of Idaho, 
      letter.....................................................    32
    Elliott, James E., R. C. Elliott & Co., Salt Lake City, UT, 
      statement..................................................    40


    Gejdenson, Hon. Sam, a Representative in Congress from the 
      State of Connecticut; Hon. Howard Coble, a Representative 
      in Congress from the State of North Carolina; Hon. Charles 
      W. Stenholm, a Representative in Congress from the State of 
      Texas; Hon. Joe Skeen, a Representative in Congress from 
      the State of New Mexico; Hon. Charlie Norwood, a 
      Representative in Congress from the State of Georgia; Hon. 
      Patrick J. Kennedy, a Representative in Congress from the 
      State of Rhode Island; Hon. William L. Jenkins, a 
      Representative in Congress from the State of Tennessee; 
      Hon. Robin Hayes, a Representative in Congress from the 
      State of North Carolina; Hon. Richard Burr, a 
      Representative in Congress from the State of North 
      Carolina; Hon. Bob Goodlatte, a Representative in Congress 
      from the State of Virginia; Hon. Virgil H. Goode, Jr., a 
      Representative in Congress from the State of Virginia; Hon. 
      Rick Hill, a Representative in Congress from the State of 
      Montana; Hon. John M. Spratt, Jr., a Representative in 
      Congress from the State of South Carolina; Hon. Melvin L. 
      Watt, a Representative in Congress from the State of North 
      Carolina; Hon. David E. Price, a Representative in Congress 
      from the State of North Carolina; Hon. James A. Traficant, 
      Jr., a Representative in Congress from the State of Ohio; 
      Hon. John W. Olver, a Representative in Congress from the 
      State of Massachusetts; Hon. Pat Danner, a Representative 
      in Congress from the State of Missouri; Hon. Dan Burton, a 
      Representative in Congress from the State of Indiana; Hon. 
      Earl Blumenauer, a Representative in Congress from the 
      State of Oregon; Hon. John Joseph Moakley, a Representative 
      in Congress from the State of Massachusetts; Hon. Rick 
      Boucher, a Representative in Congress from the State of 
      Virginia; Hon. Lamar S. Smith, a Representative in Congress 
      from the State of Texas; Hon. Nancy L. Johnson, a 
      Representative in Congress from the State of Connecticut; 
      Hon. James V. Hansen, a Representative in Congress from the 
      State of Utah; Hon. Mike McIntyre, a Representative in 
      Congress from the State of North Carolina; Hon, Michael K. 
      Simpson, a Representative in Congress from the State of 
      Idaho; Hon. Sue Wilkins Myrick, a Representative in 
      Congress from the State of North Carolina; Hon. Bob 
      Etheridge, a Representative in Congress from the State of 
      North Carolina; Hon. Charles H. Taylor, a Representative in 
      Congress from the State of North Carolina; Hon. Walter B. 
      Jones, Jr., a Representative in Congress from the State of 
      North Carolina; Hon. John E. Peterson, a Representative in 
      Congress from the State of Pennsylvania; Hon. Helen 
      Chenoweth, a Representative in Congress from the State of 
      Idaho; Hon. Henry Bonilla, a Representative in Congress 
      from the State of Texas; Hon. Duncan Hunter, a 
      Representative in Congress from the State of California; 
      Hon. Charles W. Pickering, a Representative in Congress 
      from the State of Mississippi; Hon. Eva M. Clayton, a 
      Representative in Congress from the State of North 
      Carolina; Hon. Mac Collins, a Representative in Congress 
      from the State of Georgia; and Hon. Terry Everett, a 
      Representative in Congress from the State of Alabama, joint 
      letter and attachments.....................................    29
    Georgia Textile Manufacturers Association, Inc., Atlanta, GA, 
      G.L. Bowen III, letter.....................................    32
    Glidden, John L., L.W. Packard & Company, Inc., Ashland, NH, 
      letter.....................................................    34
    Griggs, Will Hart, Utah Wool Marketing Association, statement    48
    Idaho, State of, Hon. Pete T. Cenarrusa, Secretary of State..    32
    Julian, Dennis M., North Carolina Textile Manufacturers 
      Association, Raleigh, NC, statement........................    36
    Kent Manufacturing Company, Pickens, SC, Mark B. Kent, letter    33
    L.W. Packard & Company, Inc., Ashland, NH, John L. Glidden, 
      letter.....................................................    34
    McDuffie, J. Marshall, Carleton Woolen Mills, Inc., Winthrop, 
      ME, letter.................................................    28
    Modica, Roberto, Warren Corporation, Stafford Springs, CT, 
      letter.....................................................    49
    National Retail Federation, statement........................    35
    North Carolina Textile Manufacturers Association, Raleigh, 
      NC, Dennis M. Julian, statement............................    36
    Northern Textile Association, Boston, MA, Karl Spilhaus, 
      letter.....................................................    37
    O'Day, Paul T., American Fiber Manufacturers Association, 
      Inc., letter...............................................    24
    Orwick, Peter, American Sheep Industry Association, 
      Englewood, CO, letter......................................    24
    Pendleton Woolen Mills, Portland, OR, B.H. Bishop, letter....    38


    Producers' Marketing Cooperative, Inc., San Angelo, TX, 
      statement..................................................    38
    R. C. Elliott & Co., Salt Lake City, UT, James E. Elliott, 
      statement..................................................    40
    South Carolina Manufacturers Alliance, Columbia, SC, 
      statement..................................................    40
    Spilhaus, Karl, Northern Textile Association, Boston, MA, 
      letter.....................................................    37
    Tailored Clothing Association, statement and attachments.....    40
    Union of Needletrades, Industrial and Textile Employees, 
      statement..................................................    47
    Utah Wool Marketing Association, Salt Lake City, UT, Will 
      Hart Griggs, statement.....................................    48
    Warren Corporation, Stafford Springs, CT, Roberto Modica, 
      letter.....................................................    49
    West Texas Wool & Mohair Association, Mertzon, TX, statement.    49
    Wool Fiber, Yarn, Fabric Coalition, et al., statement and 
      attachment.................................................    50
    Yocom-McColl Testing Laboratories, Inc., Denver, CO, 
      statement..................................................    54
H.R. 1582:
    C. P. Hall Company, Chicago, IL, Marvin J. Burgess, letter...    55
    DuPont, Wilmington, DE, Elaine M. Olsen, letter..............    56
H.R. 1740: No comments submitted.
H.R. 1808: Frutarom, Inc, North Bergen, NJ, statement and 
  attachments....................................................    57
H.R. 1951: No comments submitted.
H.R. 1952: No comments submitted.
H.R. 1963: JBC International, G.M. Mattingley, Jr., letter.......    63
H.R. 2064: No comments submitted.
H.R. 2065: No comments submitted.
H.R. 2071: No comments submitted.
H.R. 2072: No comments submitted.
H.R. 2073: No comments submitted.
H.R. 2074: No comments submitted.
H.R. 2075: No comments submitted.
H.R. 2076: No comments submitted.
H.R. 2078: No comments submitted.
H.R. 2098: No comments submitted.
H.R. 2099: No comments submitted.
H.R. 2132: No comments submitted.
H.R. 2133: No comments submitted.
H.R. 2134: No comments submitted.
H.R. 2135: No comments submitted.
H.R. 2142: No comments submitted.
H.R. 2143: No comments submitted.
H.R. 2144: No comments submitted.
H.R. 2145: No comments submitted.
H.R. 2146: No comments submitted.
H.R. 2147: No comments submitted.
H.R. 2150: No comments submitted.
H.R. 2151: Bayer Corporation, U.S.A., Pittsburgh, PA, Karen L. 
  Niedermeyer, letter and attachment.............................    67
H.R. 2152: No comments submitted.
H.R. 2153: No comments submitted.
H.R. 2154: No comments submitted.
H.R. 2155: No comments submitted.
H.R. 2160: No comments submitted.
H.R. 2165: No comments submitted.
H.R. 2167: No comments submitted.
H.R. 2168: No comments submitted.
H.R. 2169: No comments submitted.
H.R. 2176:
    American Cotton Shippers Association, statement..............    71
    American Textile Manufacturers Institute, statement..........    71
    National Cotton Council of America, Memphis, TN, statement 
      and attachments............................................    72
    Thomas, Hon. William M., a Representative in Congress from 
      the State of California, statement.........................    76
H.R. 2186: No comments submitted.
H.R. 2191: No comments submitted.
H.R. 2192: No comments submitted.
H.R. 2194: JBC International, G.M. Mattingley, Jr., letter.......    77
H.R. 2196: American Apparel Manufacturers Association, Arlington, 
  VA, Stephen Lamar, letter......................................    77
H.R. 2197: American Apparel Manufacturers Association, Arlington, 
  VA, Stephen Lamar, letter......................................    78


H.R. 2198: CK Witco Corporation, Greenwich, CT, Vincent A. 
  Calarco, letter (forwarded by Hon. Christopher Shays, a 
  Representative from the State of Connecticut)..................    79
H.R. 2207: AlliedSignal Inc., statement..........................    79
H.R. 2208: AlliedSignal Inc., statement..........................    80
H.R. 2209: AlliedSignal Inc., statement..........................    81
H.R. 2210: AlliedSignal Inc., statement..........................    82
H.R. 2211: AlliedSignal Inc., statement..........................    84
H.R. 2212: AlliedSignal Inc., statement..........................    85
H.R. 2213: No comments submitted.
H.R. 2214: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    86
H.R. 2215: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    87
H.R. 2216: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    87
H.R. 2217: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    88
H.R. 2218: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    89
H.R. 2219: Perstorp Polyols, Inc., Toledo, OH, Evelyn M. Suarez, 
  letter.........................................................    90
H.R. 2220:
    Lewis, Hon. Jerry, a Representative in Congress from the 
      State of California, letter................................    90
    Osram Sylvania Inc., Towanda, PA, Robert J. Fillnow, letter..    91
H.R. 2234: No comments submitted.
H.R. 2256: No comments submitted.
H.R. 2276: No comments submitted.
H.R. 2290: No comments submitted.
H.R. 2297:
    Reference Metals Company, Inc., Bridgeville, PA, Harry 
      Stuart, letter.............................................    93
    Regula, Hon. Ralph, a Representative in Congress from the 
      State of Ohio; Hon. John P. Murtha, a Representative in 
      Congress from the State of Pennsylvania; Hon. Peter J. 
      Visclosky, a Representative in Congress from the State of 
      Indiana; Hon. Robert W. Ney, a Representative in Congress 
      from the State of Ohio; Hon. John E. Peterson, a 
      Representative in Congress from the State of Pennsylvania; 
      and Hon. Jack Quinn, a Representative in Congress from the 
      State of New York, joint letter............................    99
H.R. 2310: No comments submitted.
H.R. 2311: No comments submitted.
H.R. 2312: No comments submitted.
H.R. 2428: Elf Atochem North America, Inc., Arlington, VA, 
  Charles A. Kitchen, letter.....................................   100
H.R. 2472: No comments submitted.
H.R. 2473: No comments submitted.
H.R. 2474: No comments submitted.
H.R. 2475: Albaugh, Inc., Ankeny, IA, Leslie Alan Glick, and E. 
  Jay Finkel, statement..........................................   101
H.R. 2476: No comments submitted.
H.R. 2477: No comments submitted.
H.R. 2478: No comments submitted.
H.R. 2479: No comments submitted.
H.R. 2480: No comments submitted.
H.R. 2481: No comments submitted.
H.R. 2482: No comments submitted.
H.R. 2516: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   103
H.R. 2517: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   112
H.R. 2518: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   112
H.R. 2519: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   112
H.R. 2521: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   113
H.R. 2522: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   113


H.R. 2523:
    Elf Atochem North America, Inc., Bloomington, MN, R.M. Loula, 
      letter.....................................................   113
    Kemet Electronics Corporation, Greenville, SC, and Vishay 
      Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
      statement and attachment...................................   113
H.R. 2524: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   114
H.R. 2526: Kemet Electronics Corporation, Greenville, SC, and 
  Vishay Intertechnology, Inc., Malvern, PA, Leslie Alan Glick, 
  statement and attachment.......................................   114
H.R. 2609:
    Association of International Automobile Manufacturers, Inc., 
      Arlington, VA, letter and attachment.......................   114
    BMW Manufacturing Corp., and BMW of North America, Greer, SC, 
      Donnie B. Turbeville, letter...............................   117
    G.D. Searle & Co., Skokie, IL, James L. Sawyer, letter.......   117
    Nissan North America, Inc., statement........................   121
H.R. 2648:
    World Duty Free Americas, Inc., Ridgefield, CT:
      Lawrence Caputo, Bayville, NY, letter......................   122
      John P. Luksic, North Potomac, MD, letter..................   123
    World Duty Free Inflight, Inc., Schiller Park, IL:
      Celeste Moran, Hoffman Estates, IL, letter.................   123
      Robert Papelian, Novi, MI, letter..........................   124
H.R. 2653: No comments submitted.
H.R. 2714: International Association of Airport Duty Free Stores, 
  David H. Bernstein, letter.....................................   125
H.R. 2715: No comments submitted.



ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON TRADE

                                                CONTACT: (202) 225-6649
FOR IMMEDIATE RELEASE

August 12, 1999

No. TR-15

                      Crane Announces Request for

             Written Comments on Miscellaneous Corrections

                 to Trade Legislation and Miscellaneous

                         Duty Suspension Bills

    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 comments for the record from all 
parties interested in technical corrections to trade legislation and 
miscellaneous duty suspension proposals.
      

BACKGROUND:

      
    As part of the ongoing process of identifying technical changes to 
improve the trade laws, a number of proposals have been submitted to 
the Subcommittee by the Administration, the business community and the 
public for possible consideration in future legislation. In addition, 
Members have introduced legislation to provide temporary suspension of 
duty or duty-free treatment for certain specific products, and to 
change other miscellaneous provisions. Chairman Crane is requesting 
submission of written comments on these legislative proposals.
      
    Congress passed earlier in the 106th Congress the Miscellaneous 
Trade and Technical Corrections Act of 1999 (P.L. 106-36), which was 
signed into law by the President on June 25, 1999.
      

SUMMARY OF BILLS:

      
    H.R. 194--Would amend section 313 of the Tariff Act of 1930 (19 
U.S.C. 1313) to authorize the substitution of grape juice concentrate 
of 68-70 degrees brix, regardless of color, variety or any other 
characteristics for purposes of duty drawback.
      
    H.R. 511--Would provide for the reliquidation of certain identified 
nuclear fuel assemblies as free of duty.
      
    H.R. 810--Would amend section 313(j)(2) of the Tariff Act of 1930 
(19 U.S.C. 1313(j)(2)) to specify that the chemicals N-cyclohexyl-2-
benzothiazolesulfenamide and N-tert-Butyl-2-benzothiazolesulfenamide 
are commercially interchangeable for duty drawback purposes.
      
    H.R. 1026--Would provide for certain identified screws, entered 
under subheading 7318.12 of the HTSUS as wood screws, to be 
reliquidated under subheading 7318.14 of the HTSUS as self-tapping 
screws.
      
    H.R. 1360--Would amend chapter 99, subchapter II of the Harmonized 
Tariff Schedule of the United States (HTSUS) to reduce the tariff on 
some high-end wools from 30.6 percent to 19.6 percent and to provide a 
temporary duty suspension on some other finer wools also currently 
dutiable at 30.6 percent. These imported wools are used to manufacture 
clothing, including high-end suits.
      
    H.R. 1582--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.50 for the chemical triethyleneglycol 
bis(2-ethyl hexanoate) (CAS No. 94-28-0) (provided for in subheading 
2915.90.50), as temporarily duty free.
      
    H.R. 1740--Would provide for liquidation or reliquidation of 
certain identified entries of N,N-dicyolohexyll-2-benzothazole-
sulfenamide.
      
    H.R. 1808--Would exempt gum arabic from Executive Order 13067, 
which imposed import sanctions against Sudan.
      
    H.R. 1951--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.98 for certain HIV/AIDS drugs, [4R- 
[3(2S*,3S*), 4R*]]-3-[2-Hydroxy-3-[(3-hydroxy-2-methyl benzoyl)amino]-
1-oxo-4-phenylbutyl]-5,5-dimethyl-N-[(2-methylphenyl)methyl]-4-
thiazolidinecarboxamide (CAS No. 186538-00-1) (provided for in 
subheading 2930.90.90), as temporarily duty free.
      
    H.R. 1952--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.99 for certain HIV/AIDS drugs 5-[(3,5-
Dichlorophenyl)thio]-4-(1-methylethyl)-1-(4-pyridinylmethyl)-1H-
imidazole-2-methanol carbamate (CAS No. 178979-85-6) (provided for in 
subheading 2933.39.91), as temporarily duty free.
      
    H.R. 1963--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.80 for the chemical triacetonamine, 4-
piperdone 2,2,6,6 tetramethyl (CAS No. 826-36-8) (provided for in 
subheading 2933.39.61) and any mixtures containing the foregoing, as 
temporarily duty free.
      
    H.R. 2064--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.37.02 for instant print film in rolls 
(provided for in subheading 3702.20.0000), as temporarily duty free.
      
    H.R. 2065--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.37.01 for instant print film for color 
photography (provided for in subheading 3701.20.0030) at a temporary 
duty reduction from 3.7 percent to 2.4 percent.
      
    H.R. 2071--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.00 for the chemical phosphonic acid, 
[(phosphonomethyl)imino]bis[2,1-ethane-diylnitrilobis 
(methylene)]tetrakis (CAS No. 15827-60-8) (provided for in subheading 
2931.00.9030) used in the textile industry and in water treatment, as 
temporarily duty free.
      
    H.R. 2072--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.01 for the chemical phosphonic acid, 
[(phosphonomethyl)imino]bis[2,1-ethane-diylnitrilobis 
(methylene)]tetrakis (CAS No. 22042-96-2) (provided for in subheading 
2931.00.9030) used in the paper industry, as temporarily duty free.
      
    H.R. 2073--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.02 for the chemical phosphonic acid, 
[1,6-hexanediylbis[nitrilobis(methylene)]tetrakis-potassium salt] (CAS 
No. 38820-59-6) (provided for subheading 2931.00.9030) used in water 
treatment, as temporarily duty free.
      
    H.R. 2074--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.03 for the chemical phosphonic acid, 
(1-hydroxethylidene)bis (CAS No. 2809-21-4) (provided for in subheading 
2931.00.9030) used in water treatment and beauty care products, as 
temporarily duty free.
      
    H.R. 2075--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.04 for the chemical phosphonic acid, 
[nitrilotris(methylene)] tris-, pentasodium salt (CAS No. 2235-43-0) 
(provided for in subheading 2931.00.9030) used in photography products, 
as temporarily duty free.
      
    H.R. 2076--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.05 for the chemical phosphoric acid, 
[nitrilostris (methylene)]tris (CAS Nos. 6419-19-8; 10294-56-1; 7732-
18-5) (provided for in subheading 2931.00.9030) used in peroxide 
stabilizer and compounder, as temporarily duty free.
      
    H.R. 2078--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.61.06 for the chemical phosphonic acid, 
(1-hydroxyethylidene)bis-, tetrasodium salt (CAS No. 3794-83-0) 
(provided for in subheading 2931.00.9030) used in the textile industry, 
as temporarily duty free.
      
    H.R. 2098--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.18.06 for dark couverture chocolate 
(provided for in subheading 1806.20.50), as temporarily duty free.
      
    H.R. 2099--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.44 for mixtures of sennosides (provided 
for in subheading 2938.90.00), as temporarily duty free.
      
    H.R. 2132--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.04 for the chemical Cibacron Red LS-B 
HC, 2,7-Naphthalenedisulfonic acid, 5-[[4-chloro-6-[[3-[[8-[[4-fluoro-
6-(methylphenylamino)-1,3,5-triazin-2-yl] amino]-1-hydroxy-3,6-disulfo-
2-naphthalenyl]azo]-4-sulfophenyl], amino]-1,3,5-triazin-2-yl] amino]-
4-hydroxy-3-[(1-sulfo-2-naphthalenyl)azo]-, sodium salt (CAS No. 
155522-05-7) (provided for in subheading 3204.16.30), as temporarily 
duty free.
      
    H.R. 2133--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.88 for the chemical Cibacron Brilliant 
Blue FN-G, 4, 11-Triphenodioxazinedisulfonic acid, 6, 13-dichloro-3, 
10-bis[[2-[[-[[4-fluoro-6-[(2-sulfophenyl) amino] -1,3,5-triazin-2-yl] 
amino] propyl] amino]- lithium sodium salt (CAS No. 163062-28-0) 
(provided for in subheading 3204.16.30), as temporarily duty free.
      
    H.R. 2134--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.86 for the chemical Cibacron Scarlet 
LS-2G HC, 2-Naphthalenesulfonic acid, 7,7-[(2-methyl-1,5-pentanediyl) 
bis[imino(6-fluoro-1,3,5-triazine-4,2-diyl) imino]] bis[4-hydroxy-3-
[(4-methoxysulfophenyl) azo]-, potassium sodium salt (CAS No. 152397-
21-2) (provided for in subheading 3204.16.30), as temporarily duty 
free.
      
    H.R. 2135--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.90 for the chemical MUB 738 INT, 2-
Amino-4(4-Aminobenzoylamino) Benzene Sulfonic Acid (CAS No. 167614-37-
1) (provided for in subheading 2930.90.29), as temporarily duty free.
      
    H.R. 2142--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.86 for the chemical fenbuconazole, 
alpha-[2-(4-Chlorophenyl)-ethyl]-alpha-phenyl-1H-1,2,4-triazole-1-
propanenitrile (CAS No. 114369-43-6) (provided for in subheading 
2933.90.06), as temporarily duty free.
      
    H.R. 2143--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.82 for the chemical 2,6-dichlorotoluene 
(CAS No. 118-69-4) (provided for in subheading 2903.69.70), as 
temporarily duty free.
      
    H.R. 2144--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.84 for the chemical 3-Amino-3-methyl-1-
pentyne (provided for in subheading 2921.19.60), as temporarily duty 
free.
      
    H.R. 2145--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.88 for the chemical triazamate, Acetic 
acid, [[1-[(dimethylamino) carbonyl]-3-(1,1-dimethyethyl)-1H-1,2,4-
triazol-5-yl]thio]-, ethyl ester (provided for in subheading 
2930.20.10), as temporarily duty free.
      
    H.R. 2146--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.90 for the chemical methoxyfenozide, 
benzoic acid 3-methoxy-2-methyl-,2-(3,5-dimethylbenzoyl)-2-(1,1-
dimethyl ethyl) hydrazide (provided for in subheading 2928.00.25), as 
temporarily duty free.
      
    H.R. 2147--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.39.00 for the chemical cyclic olefin 
copolymer resin (CAS No. 26007-43-2) (provided for in heading 
3902.90.00), as temporarily duty free.
      
    H.R. 2150--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.04 for the chemical 1-fluoro-2-nitro 
benzene (CAS No. 001493-27-2) (provided for in subheading 2904.90.30) 
used as raw material for a pharmaceutical intermediate, as temporarily 
duty free.
      
    H.R. 2151--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.28.01 for the chemical thionyl chloride 
(CAS No. 007719-09-7) (provided for in subheading 2812.10.50) used as 
imaging chemical for photographic applications, as temporarily duty 
free.
      
    H.R. 2152--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.01 for the chemical triethyl 
orthoformate (TEOF) (CAS No. 000122-51-0) (provided for in subheading 
2915.13.50) used as raw material for a custom agricultural product, as 
temporarily duty free.
      
    H.R. 2153--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.03 for the chemical p-hydroxybenzoic 
acid (PHBA) (CAS No. 000099-96-7) (provided for in subheading 
2918.29.22) used to produce liquified crystal polymer (LCP), as 
temporarily duty free.
      
    H.R. 2154--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.02 for the chemical myristic acid, 
tetrabecanoic acid (CAS No. 000544-63-8) (provided for in subheading 
2915.90.50) used as an imaging custom chemical, as temporarily duty 
free.
      
    H.R. 2155--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.05 for the chemical toluhydroquinone 
(THQ) purchased for resale (CAS No. 000095-71-6) (provided for in 
subheading 2907.29.90), as temporarily duty free.
      
    H.R. 2160--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.50 for the chemical 2,4-Dicumylphenol 
(CAS No. 2772-45-4) (provided for in subheading 2907.29.90), as 
temporarily duty free.
      
    H.R. 2165--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.98.07 for certain compound optical 
microscopes: whether or not stereoscopic and whether or not provided 
with a means for photographing the image; especially designed for 
semiconductor inspection; with full encapsulation of all moving parts 
above the stage; meeting ``cleanroom class 1'' criteria; having a 
horizontal distance between the optical axis and C-shape microscope 
stand of 8 or more; and fitted with special microscope stages having a 
lateral movement range of 6 or more in each direction and containing 
special sample holders for semiconductor wafers, devices, and masks 
(provided for in heading 9011), as temporarily duty free.
      
    H.R. 2167--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.85.43 for parts of certain magnetrons 
generating 10kw or more and pulsed (provided for in subheading 
8540.71.40), as temporarily duty free.
      
    H.R. 2168--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.85.42 on certain cathode-ray data/graphic 
display tubes with a video display diagonal not exceeding 30 cm 
(provided for in subheading 8540.60.00) to reduce the duty from 3 
percent to 2 percent.
      
    H.R. 2169--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.85.41 on cathode data/graphic tubes with a 
phosphor dot screen pitch smaller than 0.4 mm having a video display 
diagonal not exceeding 30 cm (provided for in subheading 8540.40.00), 
as temporarily duty free.
      
    H.R. 2176--Would amend chapter 52 of the HTSUS to provide duty-free 
treatment to certain raw cotton in specified lengths.
      
    H.R. 2186--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.97 for certain Rhinovirus drugs, trans-
(2'R, 3'''S,4S,5'S) -(4-(2'-(4-Fluorobenzyl)-6'-methyl-5'-[(5''-
methylisoxazole-3''-carbonyl)amino]-4-oxoheptanoylamino)-5-(2'''-
oxopyrrolidin-3'''-yl)pent-2-enoic acid ethyl ester (CAS No. 223537-30-
2) (provided for in subheading 2931.00.60), as temporarily duty free.
      
    H.R. 2191--Would require jewelry provided for in heading 7117 of 
the HTSUS to be indelibly marked with the country of origin.
      
    H.R. 2192--Would require jewelry boxes provided for in headings 
4202.92.60, 4202.92.90, and 4202.99.10 of the HTSUS to be indelibly 
marked with the country of origin.
      
    H.R. 2194--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.38.00 on the chemical butralin, N-sec-
butyl-4-tert-butyl-2,6-dinitroaniline (CAS No. 33629-47-9) (provided 
for in subheading 3808.30.15) and any mixtures containing the 
foregoing, as temporarily duty free.
      
    H.R. 2196--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.96.00 on slide fasteners with chain scoops 
of base metal die-cast onto strips of textal material (provided for in 
subheading 9607.11.00), as temporarily duty free.
      
    H.R. 2197--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.96.01 on slide fasteners fitted with 
polished edge chain scoops of base metal (provided for in subheading 
9607.11.00), as temporarily duty free.
      
    H.R. 2198--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.01 on the chemical branched 
dodecylbenzene (CAS No. 123-01-3) (provided for in subheading 
2902.90.30), as temporarily duty free.
      
    H.R. 2207--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.88 on a certain fluorinated compound, 
Methanone, (4-fluorophenyl) [3-[(4- fluorophenyl) ethynyl]phenyl] 
(provided for in subheading 2914.70.40), as temporarily duty free.
      
    H.R. 2208--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.36 for the chemical benzenesulfonic 
acid, 4- chloro-3-[4-[[4- (dimethylamino) phenyl]methylene-4,5- 
dihydro-3-methyl-5-oxo-1H- pyrazol-1-l], compound with Pyridine 1:1 
(provided for in subheading 2934.90.90) used as light absorbing photo 
dye, as temporarily duty free.
      
    H.R. 2209--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.62 for iron chloro 5,6-diamino-1,3-
naphthalene disulfonate complexes (CAS No. 85187-44-6) (provided for in 
subheading 2942.00.10) used as filter blue green photo dye, as 
temporarily duty free.
      
    H.R. 2210--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.34 for the chemicals Benzenesulfonic 
acid, 4-[4-[3-[4-(dimethylamino) phenyl]-2-propenylidene]-4,5-dihydro-
3-methyl-5-oxo-1H-pyrazol-1-yl]-, compound with N,N-diethylethanamine 
(1:1) (CAS No. 109940-17-2); 1H-Pyrazole-3-carboxylic acid, 4-[3-[3-
carboxy-5-hy- droxy-1-(4-sulfophenyl)-1H- pyrazol-4-yl]-2- 
propenylidene]-4,5-dihydro- 5-oxo-1-(4-sulfophenyl)-, sodium salt, 
compound with N,N-diethylethanamine (CAS No. 90066-12-9); 
Benzenesulfonic acid, 4-[4,5- dihydro-4-[[5-hydroxy-3- methyl-1-(4-
sulfophenyl)-1H- pyrazol-4-yl]methylene]-3- methyl-5-oxo-1H-pyrazol-1-
yl]-, dipotassium salt (CAS No. 94266-02-1); Benzenesulfonic acid, 4-
[4- [[4- (dimethylamin o)phenyl]methylene]-4,5- dihydro-3-methyl-5-oxo-
1H- pyrazol-1-yl]-, potassium salt (CAS No. 27268-31-1); 1H-Pyrazole-3-
carboxylic acid.  4,5-dihydro-5-oxo-4-  [(phenylamino)  methylene]-  1-
(4-sulfophenyl)-, disodium salt; and 1H-Pyrazole-3-carboxylic acid, 4-
[5-3-carboxy- 5-hydroxy-1-(4-sulfophenyl)- 1H-pyrazol-4-yl]-2,4- 
pentadienylidene]-4,5- dihydro-5-oxo-1-(4- sulfophenyl)-, 
tetrapotassium salt (CAS No. 134863-74-4) (provided for in subheading 
2933.19.90) used as light absorbing photo dyes, as temporarily duty 
free.
      
    H.R. 2211--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.84 for the chemical 4,4'-
Difluorobenzophenone (methanone, bis(4-fluorophenyl)) (CAS No. 345-92-
6) (provided for in subheading 2914.70.90), as temporarily duty free.
      
    H.R. 2212--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.98 for the chemical methanone, (4-
fluorophenyl)phenyl (CAS No. 345-83-5) (provided for in subheading 
2914.70.90), as temporarily duty free.
      
    H.R. 2213--Would allow an exception from making formal entry for a 
vessel required to anchor at Belle Isle Anchorage, Port of Detroit, 
Michigan, while awaiting the availability of cargo or for the purpose 
of taking on a pilot or awaiting pilot services, prior to proceeding to 
the Port of Toledo, Ohio.
      
    H.R. 2214--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.92 for the chemical di-
trimethylolpropane (DiTMP) (provided for in subheading 2905.49.10), as 
temporarily duty free.
      
    H.R. 2215--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.52 for the chemical 2-Ethyl-2-butyl-
1,3-propanediol (EBP) (provided for in subheading 2905.39.10), as 
temporarily duty free.
      
    H.R. 2216--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.54 for the chemical hydroxypivalic acid 
(HPA) (provided for in subheading 2918.19.90), as temporarily duty 
free.
      
    H.R. 2217--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.56 for the chemical allyl 
pentaerythritol (APE) (provided for in subheading 2909.40.60), as 
temporarily duty free.
      
    H.R. 2218--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.58 for the chemical trimethylolpropane 
diallylether (TMPDE) (provided for in subheading 2909.49.60), as 
temporarily duty free.
      
    H.R. 2219--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.59 for the chemical trimethylolpropane 
monoallyl ether (TMPME) (provided for in subheading 2909.49.60), as 
temporarily duty free.
      
    H.R. 2220--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.26.11 on tungsten concentrates (provided 
for in subheading 2611.00.60), as temporarily duty free.
      
    H.R. 2234--Would amend for certain identified entries of printing 
cartridges classified under subheading 8517.90.08 of the HTSUS to be 
reliquidated under subheading 8473.30.50 of the HTSUS.
      
    H.R. 2256--Would designate the San Antonio International Airport in 
San Antonio, Texas, as an airport at which private aircraft arriving in 
the United States from a foreign area and having a final destination in 
the United States may land for processing by the Customs Service in 
accordance with section 122.24(b) of title 19, Code of Federal 
Regulations (19 C.F.R. 122.24(b)).
      
    H.R. 2276--Would provide for the liquidation or reliquidation of 
certain identified entries of antifriction bearings covering the period 
of November 9, 1988, to April 30, 1992.
      
    H.R. 2290--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.21 for the chemical 2 Chloro Amino 
Toluene (CAS No. 95-74-9) (provided for in subheading 2921.43.80), as 
temporarily duty free.
      
    H.R. 2297--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.72.02 ferroniobium (provided for in 
subheading 7202.93.00), as temporarily duty free.
      
    H.R. 2310--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.39.30 for a certain ion-exchange resin, 
comprising of a copolymer of 2-propenenitrile with diethenylbenzene, 
ethenylethylbenzene and 1,7-octadiene, hydrolyzed (CAS No. 130353-60-5) 
(provided for in subheading 3914.00.60), as temporarily duty free.
      
    H.R. 2311--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.39.31 for a certain ion-exchange resin, 
comprising of a copolymer of 2-propenenitrile with 1,2,4-
triethenylcyclohexane, hydrolyzed (CAS No. 109961-42-4) (provided for 
in subheading 3914.00.60), as temporarily duty free.
      
    H.R. 2312--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.39.32 for a certain ion-exchange resin, 
comprising of a copolymer of 2-propenenitrile with diethenylbenzene, 
hydrolyzed (CAS No. 135832-76-7) (provided for in subheading 
3914.00.60), as temporarily duty free.
      
    H.R. 2428--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.32.49 for the chemical 11-Aminoundecanoic 
acid (provided for in subheading 2922.49.40), as temporarily duty free.
      
    H.R. 2472--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.00 for the chemical dimethoxy butanone 
(DMB), 4,4-dimethoxy-2-butanone (acetoacetaldehyde dimethyl acetal) 
(CAS No. 5436-21-5) (provided for in subheading 2914.19.00), as 
temporarily duty free.
      
    H.R. 2473--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.01 for the chemical 2,6-dichloro 
aniline (2,6-dichlorobenzenamine) (DCA) (CAS No. 608-31-1) (provided 
for in subheading 2921.42.90), as temporarily duty free.
      
    H.R. 2474--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.06 for the chemical diphenyl sulfide 
(CAS No. 139-66-2) (provided for in subheading 2930.30.29), as 
temporarily duty free.
      
    H.R. 2475--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.02 for the chemical trifluralin, 2,6-
dinitro-N, N-dipropyl-4-(trifloromethyl) benzenamine; alpha, alpha, 
alpha,-trifloro-2-6-dinitro-p-toluidine (CAS No. 1582-09-8) (provided 
for in subheading 2921.43.15), as temporarily duty free.
      
    H.R. 2476--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.07 for the chemical diethyl 
imidazolidinnone, 1,3-diethyl-2-imidazolidinnone (N, N-dimethylethylene 
urea) (DMI) (CAS No. 80-73-9) (provided for in subheading 2933.29.90), 
as temporarily duty free.
      
    H.R. 2477--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.03 for the chemical ethalfluralin, N-
ethyl-N-(2methyl-2-propenyl)-2, 6-dinitro-4-(trifloromethyl) 
benzenamine (CAS No. 55283-68-6) (provided for in subheading 
2921.43.80), as temporarily duty free.
      
    H.R. 2478--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.04 for the chemical benefluralin, N-
butyl-N-ethyl-2,6-dinitro-4-(trifloromethyl) benezenamine; N-butyl-N-
ethyl-alpha, alpha, alpha-trifloro-2-6-dinitro-p-toluidine (CAS No. 
5436-21-5) (provided for in subheading 2921.43.80), as temporarily duty 
free.
      
    H.R. 2479--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.08 for the chemical 3-amino-5-mercapto-
1,2,4-triazole (AMT) (CAS No. 16691-43-3) (provided for in subheading 
2933.90.97), as temporarily duty free.
      
    H.R. 2480--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.05 for the chemical diethyl 
phosphorochoridothiate, O,O-dethyl phosphorochoridothiate (DEPCT) (CAS 
No. 2424-04-1) (provided for in subheading 2920.10.50), as temporarily 
duty free.
      
    H.R. 2481--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.09 for the chemical refined quinoline, 
1-benzazine; benzo(b) pyridine (CAS No. 91-22-5) (provided for in 
subheading 2933.40.70), as temporarily duty free.
      
    H.R. 2482--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.29.10 for the chemical 2,2'-dithiobis(8-
fluoro-5-methoxy)[1,2,4] triazolo[1,5-c] pyrimidine (DMDS) (CAS No. 
166524-74-9) (provided for in subheading 2933.59.80), as temporarily 
duty free.
      
    H.R. 2516--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.84.10 for atmosphere firing for kiln 
sinters and ceramic chips (provided for in subheading 8417.80.00), as 
temporarily duty free.
      
    H.R. 2517--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.84.00 for ceramic coater used for laying 
down and drying ceramic (provided for in subheading 8479.90.85), as 
temporarily duty free.
      
    H.R. 2518--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.90.00 for capacitance tester and reeler 
for verifying and sorting capacitors by tolerance and reeling finished 
capacitors (provided for in subheading 9030.39.00), as temporarily duty 
free.
      
    H.R. 2519--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.90.20 for vision inspection systems for 
physical inspection of automatic capacitors (provided for in subheading 
9030.82.00), as temporarily duty free.
      
    H.R. 2521--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.84.20 for anode presses used for pressing 
tantalum powder into anodes (provided for in subheading 8479.89.97), as 
temporarily duty free.
      
    H.R. 2522--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.85.00 for rackers used for attaching raw 
anodes to process bars (provided for in subheading 8515.21.00), as 
temporarily duty free.
      
    H.R. 2523--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.39.00 for epoxide resins (provided for in 
subheading 3907.30.00), as temporarily duty free.
      
    H.R. 2524--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.84.40 for trim and form used for forming 
capacitor leads (provided for in subheading 8463.30.00), as temporarily 
duty free.
      
    H.R. 2526--Would amend chapter 99, subchapter II of the HTSUS by 
inserting a new heading 9902.84.30 for assembly machines used for 
assembling processed anodes to lead frames (provided for in subheading 
8479.90.95), as temporarily duty free.
      
    H.R. 2609--Would amend chapter 98, subchapter XVII of the HTSUS by 
inserting a new heading 9817.85.01 for duty-free treatment of 
prototypes imported exclusively for development, testing, product 
evaluation, or quality control purposes.
      
    H.R. 2648--Would amend section 555 of the Tariff Act of 1930 (19 
U.S.C. 1555) by adding a new subsection to clarify existing law 
relating to bonded warehouse storage of international travel 
merchandise (ITM).
      
    H.R. 2653--Would exempt certain identified entries of titanium 
disks/sponge from antidumping duties.
      
    H.R. 2714--Would amend subchapter XVI of chapter 98 of the HTSUS to 
provide staged reductions of duty rates applicable to merchandise 
accompanying persons entering the United States, and merchandise from 
American Samoa, Guam, or the Virgin Islands of the United States. 
Specifically, the proposed legislation would provide a staged reduction 
of the current 10 percent duty-rate applicable to articles accompanying 
a person arriving in the United States. The proposed staged reductions 
are as follows: 5 percent effective January 1, 2000, 4 percent 
effective January 1, 2001, and 3 percent effective January 1, 2002. The 
bill would also provide a staged reduction of the current 5-percent 
rate of duty for articles imported from American Samoa, Guam, or the 
Virgin Islands of the United States. The proposed staged reductions are 
as follows: 3 percent effective January 1, 2000, 2 percent effective 
January 1, 2001, and 1.5 percent effective January 1, 2002.
      
    H.R. 2715--Would amend subchapter XVII of chapter 98 of the HTSUS 
by inserting a new heading 9817.60.00 for duty free treatment of the 
personal effects of participants in, officials of, and accredited 
members of delegations to, international athletic events held in the 
United States provided that these items are not intended for sale or 
distribution in the United States. H.R. 2715 would also exempt the 
articles covered under this provision from taxes and fees and would 
give the Secretary of the Treasury discretion to determine which 
athletic events, articles, and persons are covered under this 
provision.
      

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their statement, along with an IBM compatible 3.5-inch diskette in 
WordPerfect 5.1 format, with their name, address, and comments date 
noted on label, by the close of business, Wednesday, September 22, 
1999, 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 
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record or any written comments in response to a request for written 
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H.R. 194

    To amend section 313 of the Tariff Act of 1930 to allow 
duty drawback for grape juice concentrates, regardless of color 
or variety.
      

                                


            California Association of Winegrape Growers    
                               Sacramento, California 95825
                                                 September 22, 1999

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

    Dear Mr. Singleton:

    These comments are submitted in response to the notice issued 
August 12, 1999, by the House Committee on Ways and Means, Subcommittee 
on Trade, announcing a request for written comments on miscellaneous 
corrections to trade legislation and miscellaneous duty suspension 
bills.
    These comments are on behalf of the members of the California 
Association of Winegrape Growers (CAWG), who grow more than 60% of the 
tonnage of grapes crushed for wine and concentrate in California. 
Grapes crushed for concentrate represent almost 20% of the total state 
winegrape tonnage.
    The following comments are directed to one bill on the August 12, 
1999, list--specifically, H.R. 194, to amend section 313 of the Tariff 
Act of 1930 (19 U.S.C. 1313) to authorize the substitution of grape 
juice concentrate of 68-70 degrees brix, regardless of color, variety 
or any other characteristics for purposes of duty drawback.

                               DISCUSSION

    CAWG is strongly opposed to H.R. 194. This opposition is 
based on the following points, all of which are detailed below. 
Enactment of H.R. 194 would: (1) be an assault on the integrity 
of the duty drawback program; (2) establish a problematic 
precedent of alteration of the program; (3) lead to disruption 
in the U.S. grape juice concentrate market; (4) provide a 
unilateral trade benefit to a number of U.S. trading partners, 
without obtaining a reciprocal trade benefit for the U.S. 
winegrape industry; (5) provide a financial benefit to 
industries in other countries already receiving subsidies from 
their own countries; (6) provide a de facto subsidy to certain 
exporters; and (7) lead to losses for the U.S. Treasury.

          1. H.R. 194 Would Alter Purpose of Drawback Program

    First, it is a misnomer to label H.R. 194 as a 
``miscellaneous correction to trade legislation.'' The 
provisions of H.R. 194 would not ``correct'' any mistake now 
set forth in U.S. trade law. In contrast, H.R. 194 would 
undermine and distort the purposes of the duty drawback program 
administered by the U.S. Customs Service.
    The drawback program has been a part of U.S. law since 1789 
and has evolved over the years. While the intent of the program 
can be stated rather simply, administration of the program is 
complex. The program has been administered strictly and with 
extreme care by the U.S. Customs Service, due to the potential 
for abuse and erosion of U.S. treasury revenues.
    The U.S. Customs website provides the following description 
of the drawback program:

          The rationale of drawback has always been to encourage 
        American commerce or manufacturing, or both. It permits the 
        American manufacturer to compete in foreign markets without the 
        handicap of including in his costs, and consequently in his 
        sales price, the duty paid on imported merchandise.

    Several types of drawback are authorized by U.S. law, but 
H.R. 194 would amend only one type. H.R. 194 references the 
``manufacturing substitution'' drawback program. This program 
addresses the situation where a manufacturer brings in one 
product to make another product, and the manufactured product 
is then exported. The theory is that the manufacturer should 
not have to bear the cost of the duty on the imported material 
that forms a necessary component of the manufactured article. 
Manufacturing substitution drawback is available whether the 
imported material, or a domestic material of the ``same kind 
and quality,'' are utilized in the exported product. This 
version of drawback eliminates the need for a manufacturer to 
maintain separate inventories for imported and domestic 
merchandise.

A. Customs Regulations

    Customs strictly interprets and enforces the drawback 
program through its regulations at 19 CFR 191.0 et seq. These 
regulations contain extensive provisions which set forth the 
agency's procedures in administering the program. The 
regulations provide that to qualify as material of the ``same 
kind and quality,'' Customs will look to a number of standards, 
such as USDA grade standards, FDA standards of identity, and 
industry standards. In the case of grape juice concentrate, 
criteria of the first two types do not exist; we are not aware 
of any USDA grade standard nor any FDA standard of identity 
applicable to grape juice concentrate.
    However, as to the third test, industry standards, there 
are commonly followed practices. Two grape species represent 
more than 99% of grape production in the world and in the U.S. 
These two species are vinifera and labruska.\1\ The two species 
are completely different in heritage, taste, yields and end 
uses. If buyers are desirous of labruska concentrate, buyers 
will purchase only labruska concentrate. In the industry, 
labruska concentrate is not interchangeable with vinifera 
concentrate.
---------------------------------------------------------------------------
    \1\ Labruska grape species are grown in cold climate areas that are 
subject to heavy frost, including the Northeast, Northwest and North 
central regions of the U.S. Grapes from this species are used primarily 
for the production of grape juice and grape juice concentrate. All of 
the grapes produced in California are of the vinifera species, which 
are used primarily for the production of wine, although certain 
vinifera varieties are also used in the production of grape juice, 
grape concentrate, table grapes and raisins.
---------------------------------------------------------------------------
    With respect to H.R. 194, we understand that a certain 
agricultural co-op, Welch's, wants to import vinifera (white 
and red) concentrate to make various products. However, it 
wishes to export only concentrate that is primarily from the 
Concord or Niagara varieties--both of which are of the labruska 
species. These two grape varieties are grown primarily in the 
U.S. The exporter in this case wishes to receive duty drawback 
on its exports of labruska concentrate, for the duties paid on 
the imported vinifera concentrate. As stated above, the two 
species are totally different.

B. Judicial Interpretation

    In addition to the provisions set forth in Customs 
regulations, the Court of International Trade has recently 
reviewed the ``same kind and quality'' test. The Court's 
decision contains this useful discussion:

          While the statute and regulations provide little, if any, 
        guidance as to the meaning of the statutory term ``same kind 
        and quality,'' Customs has addressed materials it will consider 
        to satisfy the statutory requirement of ``same kind and 
        quality'' in a published ruling. See T.B. 82-36, 16 Cust. B. & 
        Dec. 97 (1982).
          The introductory sentence of T.D. 82-36 states, ``[u]nder the 
        drawback law (19 U.S.C. 1313(b)) drawback contracts have been 
        approved since 1958, permitting the substitution of one 
        domestic compound for a different imported compound when an 
        identical element is sought for use in manufacturing an 
        exported article.'' \2\
---------------------------------------------------------------------------
    \2\ International Light Metals v. U.S., 24 F. Supp.2d 281 (CIT 
1998). (This decision has been appealed by the plaintiff.)

    Thus, according to the Court of International Trade, in 
order to qualify under the manufacturing substitution program 
for a drawback, the substituted component must be identical to 
the imported product. The Court found that this version of 
drawback is meant to address processes where the component in 
question (in this case, a metal) is interchangeable with the 
imported component.
    We understand that proponents of H.R. 194 admit that grape 
juice concentrate of a different color or quality (from the 
imported concentrate) would not qualify for drawback under the 
historical administration of the program. Color is, by 
comparison, an almost insignificant factor in relation to the 
fact that vinifera and labruska grapes are derived from totally 
different species which are distinct in all respects. The 
proponents are asking Congress to change the fundamental nature 
of the program to allow drawback for types of exported 
concentrate that are not interchangeable with the imported 
product.

            2. H.R. 194 Would Create a Problematic Precedent

    Congress should not take the step represented by H.R. 194, 
as it would create a troubling precedent. If this legislation 
were accepted, it would be entirely appropriate for exporters 
of, for example, U.S.-grown lemon juice concentrate to ask 
Congress to provide a duty drawback on their imports of orange 
juice concentrate--on the basis that both products are ``citrus 
juice concentrate.'' Numerous other examples could be cited, 
where producers of distinct products would argue that the 
products should be deemed of the same kind and quality for 
purposes of the drawback program. For instance, the argument 
could be made that two different types of vegetables, such as 
broccoli and asparagus, should be considered to be 
``vegetables'' for purposes of the drawback program. Adoption 
of H.R. 194 would create unending requests for similar action.
    Different species of grapes are as distinct as different 
types of citrus. Further, there is a distinct market demand for 
the different species. The proponents of H.R. 194 would likely 
admit that concentrate from labruska grapes commands a premium 
price. At the current time, this price in the world market is 
more than double the value of concentrate produced from 
vinifera grapes.
    Simply stated, eligibility for duty drawback is a privilege 
that is earned through meeting the Congressional intent in 
creating the program, as well as Customs requirements that 
govern the program. Each drawback that is granted by Customs is 
a privilege because it results in a loss to the U.S. Treasury--
a loss of the duties paid on the imported product.
    If adopted, H.R. 194 would amend the drawback program--so 
that the program would provide a benefit that would be a 
significant departure from historical practice under the 
program.

                 3. Disruption of the Domestic Industry

    In large measure, CAWG is opposed to H.R. 194 because of 
the disruption it could cause in the U.S. grape juice 
concentrate market. Grape juice concentrate has become a 
significant industry in the U.S., and promises to continue to 
grow in the coming years. Grape juice concentrate is especially 
popular in the ``health food'' sector, which is a rapidly 
growing segment of the food industry. Grape juice concentrate 
is used in drinks, frozen juice, canned juice, fruit drinks and 
preserves. It is also used as a sweetener in canned fruit, 
yogurt, cookies, cereals, candies and baby foods. The market in 
California's San Joaquin Valley for grape juice concentrate for 
food manufacturing is now almost $150 million per year.
    American growers have to attempt to compete with the 
sometimes tremendous subsidies provided by the European Union 
(and we believe by Argentina) to their grape growers. The 
Uruguay Round did not eliminate these subsidies; in fact, some 
of the subsidy programs in other countries have actually been 
increased since the Uruguay Round.
    If adopted, H.R. 194, by allowing a refund of the duties 
paid on imported concentrate, would allow those volumes to 
enter the U.S. at a lower landed cost to the importer than 
would otherwise be the case. Although only the amount of 
imported concentrate matching the volumes of exported 
concentrate would be eligible for the drawback refund, this 
lower-cost, imported concentrate could and would either 
displace U.S.-produced concentrate of a higher price, or put 
downward price pressure on the U.S.-produced product. It would 
also send a false signal to the market and could cause 
additional grape juice concentrate to be imported.
    CAWG's members currently produce more than one-half of the 
grapes which now are used for grape juice concentrate. For this 
reason, CAWG is extremely concerned about any additional 
product which might either displace or put downward price 
pressure on U.S.-grown grapes.
    Congress has deemed that imported grape juice concentrate 
should be subject to a set level of duty, and CAWG believes 
that this level should continue to be operative, except in 
those limited cases where the importer qualifies for duty 
drawback in the sense in which the program has been 
administered for years--i.e., where the exported product is of 
the same kind and quality and is interchangeable with the 
imported product.

    4. Unilateral Trade Benefit to Foreign Grape Juice Concentrate 
                               Producers

    Enactment of H.R. 194 would also serve to provide a 
unilateral, and unreciprocated, trade benefit--indeed, a de 
facto tariff reduction--to all countries that produce grape 
juice concentrate and would like to export to the U.S. market 
(to the extent the grape juice concentrate is imported and 
later matched with exported volumes of grape juice concentrate, 
not of the same kind and quality). We believe the bill would 
provide an incentive for increased purchases from countries now 
subject to a tariff and reduce demand for U.S.-produced 
concentrate, particularly the type of concentrate produced in 
California.
    Of great concern is the fact that the elimination of a pre-
existing tariff is something that is normally only provided in 
the course of trade negotiations. Such action is handled in 
trade negotiations for very good reason--so that U.S. producers 
and industries will obtain a reciprocal trade benefit of some 
type.
    The U.S. should not be providing beneficial duty treatment 
to potential competitors to the U.S. winegrape growing 
industry, without those countries requesting that treatment and 
without the U.S. obtaining some type of benefit in return.
    Further, when trade concessions are under consideration in 
the course of trade negotiations, very careful analysis is 
normally carried out on the impact that a possible concession 
would have on the U.S. industry in question. However, because 
H.R. 194 is not framed as a trade concession--although the 
result would be the same--it appears that no such consideration 
has taken place. The Committee is obligated to consider this 
impact. This impact is addressed above in the section entitled 
``Disruption of the Domestic Industry.''

    5. Grape Industries in Certain Other Countries Already Receive 
                               Subsidies

    Some of the main exporters to the U.S. at the present time 
are: Argentina, Spain and Italy. These three countries comprise 
approximately seventy percent of the U.S. imports of grape 
juice concentrate.
    The grape industries in Spain and Italy enjoy considerable 
subsidies already (in excess of $750 million in 1997),\3\ which 
provide them assistance to compete in global markets. There is 
no policy justification to increase the amount of effective 
subsidy available to these foreign competitors.
---------------------------------------------------------------------------
    \3\ Twenty-Seventh Financial Report of the Commission of the 
European Communities Concerning the European Agricultural Guidance and 
Guarantee Fund
---------------------------------------------------------------------------
    Further, the U.S. has entered into negotiations for a Free 
Trade Area of the Americas and is about to head into the next 
round of World Trade Organization (WTO) negotiations (in late 
November of this year). In the WTO Round, the U.S. is committed 
to reducing all agricultural subsidies. It would be wholly 
inconsistent to, on the one hand, reward behavior that the U.S. 
has announced, on the other hand, it is committed to reducing 
or eliminating.

                         6. A De Facto Subsidy

    Although the goal of the proponent of H.R. 194--to increase 
its exports of concentrate from U.S. grapes--is indeed 
laudable, it is trying to obtain Congressional concurrence to 
accomplish its goal through an alteration, or special 
exemption, to a program for which it does not otherwise 
qualify.
    If Congress were to grant this exemption by deeming the 
exports of concentrate as eligible for duty drawback, the 
importer/exporter would obtain a de facto subsidy on its 
export. This subsidy would be created because the importer/
exporter could use the refunded duties to reduce the price of 
the exported product, in essence subsidizing the price of the 
exported product.
    The importer/exporter would achieve its goal with the 
assistance of all U.S. taxpayers--since the U.S. treasury is 
the source of drawback revenues. Further, if Congress were to 
adopt H.R. 194, a benefit would be provided to one group of 
grape growers which growers of other agricultural products do 
not have.

Other Programs

    Given its goal, there are other programs in existence for 
which the proponent of the legislation should be applying. For 
instance, the Market Assistance Program (MAP) is administered 
by the U.S. Department of Agriculture. For that program, 
Congress makes a decision on an annual basis (through the 
annual appropriations process) as to the level of U.S. tax 
dollars that shall be available to assist U.S. agricultural 
producers to attain new (or increase existing) export markets. 
If Congress were to enact H.R. 194, those entities which would 
benefit from the legislation would in essence be circumventing 
the requirements, process, and budget limitations, of the MAP 
program.

                   7. Potential Loss to U.S. Treasury

    The volume of grape juice concentrate exported to the U.S. 
has increased substantially in recent years--from 16,764,000 
liters in 1994 to 59,288,000 liters in 1997. (1998 did see a 
decrease in imports, but it is believed the upward trend will 
continue in coming years.) \4\ In 1998, $5,347,000 in duties 
were paid on imported grape juice concentrate.\5\ 
Theoretically, ninety-nine percent (99%) of this amount could 
ultimately be subject to drawback claims (99% is the level of 
refund available when an export qualifies for manufacturing 
drawback). It is certainly possible that companies would devise 
ways to take advantage of the new financial benefit, were it to 
become available.
---------------------------------------------------------------------------
    \4\ Based on U.S. Department of Commerce (DOC) ``National Trade 
Data Bank'' data.
    \5\ Source: verbal communication with U.S. Customs Service.
---------------------------------------------------------------------------
    If in 1998 all of the 14.7 million liters of U.S.-produced 
concentrate that were exported \6\ were deemed eligible for 
duty drawback, the loss of revenue to the U.S. treasury would 
have been some $3 million.
---------------------------------------------------------------------------
    \6\ Based on DOC ``National Trade Data Bank'' data.
---------------------------------------------------------------------------

                               CONCLUSION

    For all of the above reasons, the Subcommittee on Trade of the 
House Committee on Ways and Means should not approve H.R. 194. We 
appreciate the Committee's consideration of these comments, and we 
would be pleased to provide any additional information the Committee 
would find helpful.

            Sincerely,
                                                 Karen Ross
                                                          President
      

                                


Statement of Ansley Watson, Jr., National Juice Products Association, 
Tampa, Florida

    Pursuant to the August 12, 1999 announcement by the 
Subcommittee on Trade of the Committee on Ways and Means, the 
National Juice Products Association (``NJPA'') submits the 
following statement for consideration by the Committee and for 
inclusion in the printed record. The statement briefly comments 
on H.R. 194, a bill to amend section 313 of the Tariff Act of 
1930 to allow drawback for grape juice concentrates regardless 
of color or variety. The statement also addresses the more 
fundamental issue of how Customs is administering the drawback 
program to the detriment of the U.S. juice producing industry.
    NJPA is a national trade association comprised of over 70 
juice growers and processors located throughout the United 
States. See membership list at Attachment 1. A number of NJPA 
members import concentrated juice products for manufacturing 
and these members are heavily reliant on the drawback program 
to maintain the competitiveness of their domestic processing 
operations, particularly in foreign markets.
    NJPA believes that H.R. 194 is symptomatic of a fundamental 
problem in the implementation of the drawback statute by the 
U.S. Customs Service, including the most recent amendments to 
that statute. Through these comments, NJPA hopes to direct the 
attention of the Committee to the need to address this issue or 
risk jeopardizing the continued ability of U.S. juice 
processors to compete in overseas markets.

                         1. Summary of H.R. 194

    H.R. 194 would amend the Tariff Act of 1930 to authorize 
the substitution of certain grape juice concentrate regardless 
of color, variety, or any other characteristic for purposes of 
the drawback of import duties on such products. The legislation 
is rooted in Customs' narrow construction of the substitution 
provisions of the manufacturing drawback statute (19 U.S.C. 
Sec. 1313(b)).
    NJPA does not oppose this legislation. NJPA believes, 
however, that the Committee needs to consider the more 
fundamental issue of how Customs is implementing the drawback 
statute, to the extent the law permits the substitution of 
imported and domestic merchandise. This issue arises, in 
particular, in connection with the filing of unused merchandise 
substitution drawback claims, which is discussed next.

     2. Substitution of Juice Concentrates in the Filing of Unused 
                Merchandise Substitution Drawback Claims

    The Customs Modernization and Informed Compliance Act (Mod 
Act) established a new and more liberal standard of 
substitution for purposes of claiming drawback under the unused 
merchandise substitution drawback provision set forth in 
section 313(j)(2) of the Tariff Act of 1930, 19 U.S.C. Sec.  
1313(j)(2). The new standard, commercial interchangeability, 
replaced the narrow standard of fungibility, which severely 
limited the use of unused merchandise substitution drawback 
(previously substitution same condition drawback) under the 
pre-Mod Act drawback regime.
    In determining whether two articles are commercially 
interchangeable for drawback purposes, Congress set forth in 
the legislative history to the Mod Act certain criteria to be 
considered including, but not limited to, governmental and 
industrial standards, part numbers, tariff classification and 
relative values. The standard of commercial interchangeability 
was intended by Congress to more closely align the 
administration of the drawback law with commercial realities. 
Unfortunately, Customs' application of the new standard to the 
juice producing industry has been fraught with problems. The 
problem arises because for a number of juice products, there 
exist no governmental and industrial standards that would 
facilitate a commercial interchangeability analysis. Similarly, 
the relative values that are reflective of market pricing in 
the juice producing industry can vary for a number of reasons 
that have little or nothing to do with the quality or 
commercial substitutability of the product. The reasons might 
include fluctuations in supply, weather conditions or the 
seasonality of various types of fruits. The absence of 
governmental standards and the problems inherent in a relative 
value analysis have, therefore, virtually eliminated the 
availability of unused merchandise substitution drawback to the 
juice producing industry, notwithstanding the intent of 
Congress to increase its availability and enhance U.S. 
producers' ability to export their products.
    A proposal to address this issue on a broader scale for the 
U.S. juice producing industry is attached. See Attachment 2. 
The proposal expands on the concerns reflected in H.R. 194 and 
addresses the applicability of the substitution standard for 
concentrates of orange juice, grape juice, lemon juice and 
grapefruit juice. The proposed legislation does not change the 
standard of commercial interchangeability. It merely recognizes 
that specific concentrated juice products for manufacturing, 
whether they are produced domestically or overseas, are bulk 
commodities that are commercially interchangeable. With respect 
to concentrated orange juice for manufacturing, the one juice 
product for which a recognized governmental standard does 
exist, the USDA grading system is the single most important 
factor upon which COJM is traded. The legislation therefore 
defines commercial interchangeability for purposes of COJM on 
the basis of the standards of identity that comprise the USDA 
grading system. Thus, for example, imported COJM that is rated 
Grade A under the USDA grading system would be deemed 
commercially interchangeable with domestic, duty-paid or duty 
free merchandise that is rated Grade A, provided that the 
products also fall within the range of 93-96 for total USDA 
scores (based on color, defects and flavor). Drawback could be 
claimed on the exportation of domestic, duty-paid or duty free 
Grade A COJM (with USDA scores in the range of 93-96), provided 
that the other requirements of the drawback law are met.
    With respect to other juice products, unused merchandise 
substitution drawback would be permitted based on the existence 
of the identical 8-digit Harmonized Tariff Schedule Numbers 
that define them.

                             3. Conclusion

    The concerns reflected in H.R. 194 are merely symptomatic 
of a more fundamental problem with the administration of the 
drawback program by U.S. Customs with respect to the entire 
U.S. juice producing industry. The problem is caused by 
Customs' narrow application of the legal standard for 
substitution, both with respect to manufacturing and unused 
merchandise drawback. The situation is particularly troublesome 
with respect to unused merchandise drawback, where Congress has 
recently established a new and more liberal standard, which 
Customs has refused to properly implement. Even the courts have 
recently rejected Customs' narrow application of the standard. 
See Texport Oil Company v. United States, Slip. Op. 98-1352,-
1353,-1373 (Fed. Cir. 1999).
    Congress and this Committee need to revisit this issue, or the 
competitiveness of the U.S. juice producing industry in world markets 
will be severely undermined.
      

                                


Attachment 1

NATIONAL JUICE PRODUCTS ASSOCIATION

                            Regular Members

Agrigold Juice Products
A. Lassonde, Inc.
American Fruit Processors
Americana Juice Products
Bascitrus Agro Industria
Camerican, A Con-Agra Co.
Canadaigua Concentrates
Cargill Citro-America
Caulkins Indiantown Cit.
CCPA/Valley Foods
Chiquita Brands, Int'l
Citrofrut, S.A.
Citrosol, S.A. De C.V.
Citrosuco North America
Citrosuco Paulista, S.A.
Citrus Belle, Div. A. Duda
Citrus Products, Inc.
Citrus World, Inc.
Clement Pappas & Co., Inc.
Cliffstar Corporation
Coca-Cola Foods
Confrutta, S.A.
Country Pure Foods
Cutrale Citrus Juices USA
Del Monte Foods
Del Oro, S.A.
Delano Growers Grape
Dinter GMBH
Dole Packaged Foods
Farmland Dairies, Inc.
Florida Flavors, Inc.
Flavors From Florida
Florida Global Citrus Ltd.
Golden Gem Growers, Inc.
Givadaun Roure
Gregory Packaging Int'l
H.J. Heinz Company
Holly Hill Fruit Products
Home Juice Company
Johanna Farms, Inc.
Jugos Concentrados, S.A.
Jugos Del Sur, S.A.
Juguera Veracruzana, S.A.
The Kroger Co.
Le Vignoble, S.A.
Lykes Pasco, Inc.
McCain Citrus, Inc.
Nestle
Northland Cranberries, Inc.
Ocean Spray Cranberries
Old Orchard Brands
Olympic Foods, Inc.
Orange-Co., Inc.
Orfiva, S.A.
Peace River Citrus Prod.
Pepsico, Inc.
Sabroso Company
San Joaquin Valley
Silver Springs Citrus Coop.
Sociedad Cooperativa
Sunbase U.S.A., Inc.
Sundor Brands, Inc.
Sunkist Growers, Inc.
Sun Pac Foods, Inc.
Sunpure
Tecnovin Do Brasil Icie, Ltda
Texas Citrus Exchange
Ticofrut, S.A.
Tree Top, Inc.
Tropicana Products, Inc.
United States Sugar Corp.
Ventura Coastal Corp.
Very Fine Products, Inc.
Vicente Trapani, S.A.
Vie Del Company
Vita-Pakt Citrus Prod. Co.
Welch's
Winter Garden Citrus

                           Associate Members

A.G. Edwards & Sons
A.M. Beebe Company
American National Can
Automatic Machinery
B.A. Carlson of Fla.
Bowen Juices Int'l
Bradford Company
Brown International
Cargill Investor Services
Cerestar
Champion International
Citrico, Inc.
Citrus Assoc. N.Y. Cotton
Combibloc
Continental Plastic
Daystar Robinson Int'l
Directus International
Ecolab-Food and Bev. Div.
Eni Laboratories
Enerfab
Elopak, Inc.
Export Packers Co. Ltd.
Fabri-Kal Corp.
Ferreiro and Company
Fimat Futures USA, Inc.
Fleming Packaging
Florida Bulk Sales
Florida Worldwide Cit.
FMC Corporation
FMC do Brasil
G.B. International, Inc.
Graham Packaging Company
Harris Hollow Froz. Fruit
Hartog Foods Int'l
International Paper
Jefferson Smurfit Corp.
Johnson Controls, Inc.
Kendall Frozen Fruits
Leeward Resources
Koch Membrane
Merrill, Lynch, etc.
Miller & Smith Foods
Oakley Groves, Inc.
Paine Webber
Pittra Incorporated
Potomac Foods of VA
Premier Juices, Inc.
Purcell & Assoc.
Purkel Products, Inc.
Ryan Trading Corp.
Scholle Corp.
Sethness-Greenleaf
Silgan Containers
Smith Barney Shearson
Sonoco Products Co.
Tetra-Pak, Inc.
Vincent Corporation
White Cap, Inc.
      

                                

Attachment 2

IN THE HOUSE OF REPRESENTATIVES OF THE UNITED STATES

    Mr. -------------- of ------------------ introduced the 
following bill; which was referred to the Committee on Ways and 
Means.

                                 A BILL

    To authorize substitution for unused merchandise drawback 
purposes of various juice concentrates
    Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled,

  SECTION 1. DRAWBACK FOR CONCENTRATED ORANGE JUICE FOR MANUFACTURING.

    Section 313 of the Tariff Act of 1930, as amended (19 
U.S.C. 1313) is amended by adding at the end the following:
    ``(x) Concentrated Orange Juice for Manufacturing.--
Notwithstanding any other provision of law, imported duty-paid 
concentrated orange juice for manufacturing is commercially 
interchangeable with duty-paid, duty-free, or domestic 
concentrated orange juice for manufacturing which is 
substituted and exported if--
    ``(1) the imported duty-paid concentrated orange juice for 
manufacturing is classifiable under the same eight-digit 
classification of the Harmonized Tariff Schedules of the United 
States as the product which is substituted and exported; and
    ``(2) the imported duty-paid concentrated orange juice for 
manufacturing is classified as Grade A under the U.S. 
Department of Agriculture grading system for orange juice 
products and the product which is substituted and exported 
would also be classified as Grade A; and
    ``(3) the imported duty-paid concentrated orange juice for 
manufacturing and the product which is substituted and exported 
have total USDA scores (taking into account color, defects and 
flavor) that fall within the range of 93-96.

              SECTION 2. DRAWBACK FOR OTHER JUICE PRODUCTS

    Section 313 of the Tariff Act of 1930, as amended (19 
U.S.C. 1313) is amended by adding at the end the following:
    ``(y) Concentrated Juice Products for Manufacturing.
    (1) Notwithstanding any other provision of law, imported, 
duty-paid concentrated grapefruit juice for manufacturing is 
commercially interchangeable with duty-paid, duty-free, or 
domestic concentrated grapefruit juice for manufacturing which 
is substituted and exported if--the imported duty-paid 
concentrated grapefruit juice for manufacturing is classifiable 
under the same eight-digit classification of the Harmonized 
Tariff Schedules of the United States as the product which is 
substituted and exported.
    (2) Notwithstanding any other provision of law, imported, 
duty-paid concentrated lemon juice for manufacturing is 
commercially interchangeable with duty-paid, duty-free, or 
domestic concentrated lemon juice for manufacturing which is 
substituted and exported if--the imported duty-paid 
concentrated lemon juice for manufacturing is classifiable 
under the same eight-digit classification of the Harmonized 
Tariff Schedules of the United States as the product which is 
substituted and exported.
    (3) Notwithstanding any other provision of law, imported, 
duty-paid concentrated grape juice for manufacturing is 
commercially interchangeable with duty-paid, duty-free, or 
domestic concentrated grape juice for manufacturing which is 
substituted and exported if--the imported duty-paid 
concentrated grape juice for manufacturing is classifiable 
under the same eight-digit classification of the Harmonized 
Tariff Schedules of the United States as the product which is 
substituted and exported.
    (4) Notwithstanding any other provision of law, imported, 
duty-paid concentrated cranberry juice for manufacturing is 
commercially interchangeable with duty-paid, duty-free, or 
domestic concentrated cranberry juice for manufacturing which 
is substituted and exported if--the imported duty-paid 
concentrated cranberry juice for manufacturing is classifiable 
under the same eight-digit classification of the Harmonized 
Tariff Schedules of the United States as the product which is 
substituted and exported.

                       SECTION 3. EFFECTIVE DATE.

    The amendments made by sections 1 and 2 apply with respect 
to
    (1) any drawback claim made on or after the 30th day after 
the date of the enactment of this Act; and
    (2) any drawback claim that, as of the 30th day after such 
date of enactment, is unliquidated or the liquidation of which 
is not final or is under protest.
      

                                


Statement of Hon. William M. Thomas, a Representative in Congress from 
the State of California

    I cannot support H. R. 194 because it undermines the rules 
for duty drawback and fundamentally changes the nature of the 
program into a new agricultural export subsidy.
    At their core, the drawback rules are sensible. A company 
that manufacturers something from imported materials can 
largely recoup duties paid on the imports instead of having to 
recoup those duties from international markets. Those who 
substitute imports for commercially equivalent domestic goods 
can also claim draw back. The key in these cases, however, is 
that the imported goods somehow facilitate exports, either by 
being used directly for production of an export or as 
substitutes for domestically produced or previously used goods 
so used.
    H. R. 194 would allow exporters of American grape juice 
concentrate to obtain refunds of duties paid on imported 
concentrate even though the concentrates exported and imported 
are not the same product. Current law allows drawback where a 
manufacturer uses an imported product or substitutes a domestic 
product in the creation of a product which is then exported, H. 
R. 194 would permit an exporter of grape juice concentrate to 
obtain duty refunds regardless of whether the imported and 
exported juice are of the same quality. It is this 
characteristic that I find objectionable.
    What H. R. 194 does is turn drawback into an export subsidy 
procedure and open the way for other industries to demand 
similar treatment. H. R. 194 is purportedly designed to reward 
exporters of American Concord grape juice concentrates by 
allowing them to claim duties paid on imported grape 
concentrates. The trade does not consider concentrates from 
Concord grapes and other grapes to be commercial equivalents. 
H. R. 194 would thus allow Concord concentrate exporters the 
unique benefit of being rewarded by the U.S. Treasury for 
having exported a product that is not produced anywhere but in 
the U.S. Those exporting other products are almost certain to 
identify other situations in which they will want Treasury to 
support their activities with duties paid on similar imports.
    The U.S. has already suggested that the elimination of farm 
export subsidies be part of the coming World Trade Organization 
talks on agriculture. To advance a new means of subsidizing 
some farm exports undermines that process. On that basis, I 
oppose H. R. 194.
      

                                


                                      Welch Foods, Inc.    
                                          Concord, MA 01742
                                                 September 17, 1999

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

Re. Comments In Support of H. R. 194

    Dear Mr. Singleton:

    Welch Foods, Inc., A Cooperative (Welch's) and the National Grape 
Cooperative Association, Inc. are pleased to support H. R. 194 as part 
of the next miscellaneous tariff and trade bill. This technical 
amendment of the duty drawback law is specifically intended to benefit 
exports of products manufactured in the United States with the American 
Concord and Niagara varieties of grapes
    Welch's is the processing and marketing affiliated cooperative of 
the National Grape Cooperative Association, Inc., whose patron growers 
supply Welch's with its principal raw products, Concord and Niagara 
Grapes. The Cooperative is made up of 1,497 growers who cultivate over 
44,000 acres of vineyards in Michigan, New York, Ontario-Canada, Ohio, 
Pennsylvania, and Washington. Welch's manufacturing plants are located 
in Lawton, Michigan; North East, Pennsylvania; Westfield, New York; and 
Grandview and Kennewick Washington.
    Welch's had its beginnings in 1869 when Dr. Thomas Bramwell Welch 
successfully processed an unfermented Concord grape wine that could be 
used in his church's communion service. Headquartered in Concord, 
Massachusetts, Welch's is the worlds leading marketer of Concord and 
Niagara grape-based products, including grape juice and jelly. The 
Company also produces a variety of other fruit based products including 
juices, jams, jellies and preserves under both the Welch's and BAMA 
brand names.
    These products are sold by the food store, special markets, food 
service, industrial and military, licensing and international divisions 
throughout the United States and in more than 30 countries around the 
world. In its most recently completed fiscal year, Welch's sales 
totaled $600 million.
    The mission of the Company as a cooperative is to maximize the 
long-term value of its growers and to provide a reliable market for 
their grapes through excellence in product quality, customer service, 
market growth and customer satisfaction. To this end, Welch's has been 
working with local distributors and manufacturers in Japan and other 
Pacific Rim countries since the 1970's. This effort has resulted in a 
substantial market for our exports of grape juice concentrate and other 
products manufactured in the United States using American Concord and 
Niagara grapes.
    Welch's has also dramatically expanded its product line and 
distribution methods to insure its long term growth and demand for 
products made from the grapes grown by its cooperative members. Some 
32% of domestic retail sales in 1998 came from items that were not part 
of the Company's product portfolio five years ago.
    This growth, together with year to year crop variations, requires 
the Company to purchase grape juice concentrates from other domestic 
producers and from distributors of concentrates produced outside of the 
U.S.
    Under the Customs Duty Drawback law [Section 313 of the Tariff Act 
of 1930, 19 U.S.C. 1313(b)] products manufactured in the United States 
and then exported are eligible for a refund of customs duties (duty 
drawback) if they contain imported ingredients, or domestic ingredients 
of the ``same kind.'' The U.S. Customs Service has advised Welch's that 
duty paid on imported concentrates, which are mostly white or red in 
color, cannot be claimed against the Company's exported products, which 
are mostly purple in color. This technical determination denies Welch's 
a significant export incentive and benefit.
    The proposed amendment is intended to cure Customs' restrictive 
interpretation by allowing duty drawback on grape juice concentrates 
regardless of color or variety. This amendment and the underlying 
section of the law (19 U.S.C. 1313(b)) apply only to exported grape 
juice-based products which are manufactured in the United States. As 
such, the proposed amendment is designed to bring U.S. Customs 
treatment of grape juice concentrates into conformance with the 
underlying goals of duty drawback: i.e., to promote U.S. manufacturing 
and export sales.
    This amendment is intended only to apply to exports of products 
made with American Concord and Niagara grapes. Welch's intends to 
suggest an amendment to H. R. 194 which will clarify this point.
    Thank you very much for the opportunity to comment on this bill.

            Sincerely,
                                   Welch Foods, Inc., A Cooperative
                                   By: Vivian S.Y. Tseng, Esq.
                                           Vice President, General 
                                               Counsel and Secretary
                                   National Grape Cooperative 
                                       Association, Inc.
                                   By: Vivian S.Y. Tseng
                                           Assistant Secretary
      

                                


H.R. 511

    To provide for the liquidation or reliquidation of certain 
customs entries of nuclear fuel assemblies.
      

                                


Statement of Robert S. Bell, Jr., Vice President & General Counsel, ABB 
Combustion Engineering Nuclear Power, Inc., Windsor, Connecticut

and

Gilles Page, Vice President, Nuclear Fuel, ABB Combustion Engineering 
Nuclear Power, Inc., Hematite, Missouri

 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            2844.20.001     0
Zirconium Tubing.............................................      658.00     5.5%         8109.90.000     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 8109.90.0000 HTS became 4.8 percent in 1996 and 4.4
  percent in 1997. 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 became 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 8109.90.0000 HTS became 4.8 percent in 1996
  and 4.4 percent in 1997. 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
  became 5.9 percent in 1996 and 5.2 percent in 1997.


    ABB Combustion Engineering Nuclear Power, headquartered in 
Windsor, Connecticut, with a plant in Hematite, Missouri, has 
paid 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 are the only such entries for ABB CENP Nuclear Power 
because product for all subsequent orders has been manufactured 
in the U.S. H.R. 511 would refund the duty paid with respect to 
these entries, $2.4 million.

         Operations of ABB Combustion Engineering Nuclear Power

    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. 
became ABB Combustion Engineering Nuclear Power (ABB CENP), 
headquartered in Windsor, Connecticut.
    The early stages of the testing program were so successful 
that the number of testing agreements was reduced. ABB CENP 
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 System 
(WPPSS).
    Unfortunately the capacity of ABB CENP'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 CENP 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 CENP's bundles by more than five-fold--despite the intent 
of HTS not to increase duty on any item.
    Refunding the unintended duty increase imposed on the 1996 
and 1997 WPPSS deliveries of ABB CENP's nuclear fuel bundles is 
a matter of equity.
    The unintended duty has been a significant financial burden 
to the start-up of the ABB CENP 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.
    For the sake of equity and U.S. jobs, H.R. 511 to refund 
the unintended duty, should be enacted into law as soon as 
possible.
      

                                


H.R. 810

    To establish drawback for imports of N-cyclohexyl-2-
benzothiazolesulfenamide based on exports of N-tert-Butyl-2-
benzothiazolesulfenamide.
      

                                


                                                 September 22, 1999

Hon. Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways and Means
Washington, DC 20515

    Dear Mr. Chairman:

    We are writing in response to your request for comments for the 
record on miscellaneous trade and duty suspension bills. We support the 
proposed legislation to establish duty drawback for imports and exports 
of chemicals known as CBS and TBBS as originally provided in H.R. 810. 
We believe that drawback is warranted because these rubber 
vulcanization accelerators are commercially interchangeable under the 
terms of the Customs Modernization Act.
    The 1993 Customs Modernization Act made important changes in how 
drawback applies to these chemicals. Previously the chemicals would 
have had to have been ``fungible'' with dutiable imports. Today they 
only need be ``commercially interchangeable.'' Flexsys America I an 
Ohio-based firm, has provided technical testimony and other evidence 
conclusively demonstrating the commercial interchangeability of CBS and 
TBBS, including letters from Bridgestone/Firestone and Pirelli 
Armstrong, to U.S. Customs.
    In the recent Texport Oil Company v. United States, the United 
States Court of Appeals for the Federal Circuit stated in part that 
``Congress clearly and unequivocally stated its intention....This 
precludes our acceptance of Customs' interpretive position, as it would 
require `identity,' Instead, I am convinced that Congress intended 
`commercially interchangeable' to be an objective, market-based 
consideration of the primary purpose of the good in question... 
Therefore, `commercially interchangeable' must be determined 
objectively from the perspective of a hypothetical reasonable 
competitor; if a reasonable competitor would accept either the imported 
or the exported good for its primary commercial purpose, then the goods 
are `commercially interchangeable' according to 19 U.S.C.'S 
1313(j)(2).''
    As evidenced by the court's comments, the U.S. Customs Service has 
taken a constrained view of the interchangeability concept. Given this 
disagreement, we support the approach in H.R. 810 to clarify the 
eligibility of these chemicals for drawback.
    We are particularly concerned about Flexsys America L.P. because of 
its contributions to the economic strength of Ohio and the U.S. Flexsys 
is the leading supplier of chemicals specifically formulated for the 
rubber industry. Its headquarters for North and South America are 
located in Ohio, as is its world-class technical center. This center 
services Ohio-based customers like Aeroquip (Eaton), Bridgestone/
Firestone, Cooper Tire, Goodyear Tire and Rubber, HBO Industries, 
Hercules Rubber, M.A. Hanna, Mark IV (formerly Dayco), and Tenneco. 
TBBS and CBS are two o the import products of Flexsys that--are 
produced domestically.
    Adoption of H.R. 810's approach will help solidify Flexsys' 
opportunity to manufacture and export these products competitively. We 
hope you will include it in the Committee's omnibus bill.

            Sincerely,
                                   Thomas C. Sawyer, M.C.
                                   Ralph Regula M.C.
                                   Sherrod Brown, M.C.
                                   Tony Hall, M.C.
                                   Steven C. LaTourette, M.C.
      

                                


H.R. 1026

    To provide for the reliquidation of certain entries of 
self-tapping screws.
      

                                


                               Jade International, Inc.    
                                         Folcroft, PA 19032
                                                 September 20, 1999

Hon. Philip M. Crane, MC
Chairman, Subcommittee on Trade
Committee on Ways and Means
1136 Longworth House Office Building
Independence and New Jersey Avenues, SE
Washington, DC 20515

Re: TR-15 and HR 1026, Statement in Support of the Measure

    Dear Congressman Crane:

     We respond to your Advisory Notice TR 15 dated August 12, 1999, in 
which you invited comments on certain miscellaneous trade and tariff 
bills, including HR 1026, a bill to provide for the reliquidation of 
certain Customs entries made in the Port of Philadelphia. For the 
reasons given below, we support the legislation.
     Our company acts as a customs broker, and our responsibilities 
include the clearance and release of imported merchandise, the 
calculation and deposit of duties owed and the challenge of those 
assessments, when we believe that they are incorrectly assessed. In 
1993 and 1994 our company filed certain protests to the assessment of 
customs duties alleging that the product was misclassified and 
excessive duties were collected. In 1955 certain of the protests were 
denied by Customs and some, but not all, of the protests were forwarded 
to the U.S. Court of International Trade where Federal litigation was 
commenced. In late 1996 the United States conceded liability and error 
without trial and the Court ordered the refund of those entries then 
before it. In reviewing the court file, it was determined that certain 
entries which were validly protested before the Customs Service (and 
therefore would have been the subject of court ordered refund) were not 
properly placed before the Court of International Trade. HR 1026 would 
order a reliquidation and refund by Act of Congress on those entries 
which would have been refunded by Court order but were not before the 
Court, and thus, results in no greater expense to the government than 
would have been incurred had the entries been reliquidated by court 
order. By the same token, without this legislation, the government will 
hold funds which the U.S. Court of International Trade has already 
determined were improperly collected in the first place.
     In light of the above facts, it is clear that Customs holds now 
funds of our client that the U.S. Court of International Trade has 
already ruled should not have been collected. The just solution to such 
an outcome is legislation directing refund, and for that reason we 
support the measure.

             Very truly yours,
                                        Anthony Castrovillo
                                                     Vice President

cc: Leo Webb, Esquire
U.S. International Trade Commission
 Washington, DC 20436
      

                                


H.R. 1360

    To amend the Harmonized Tariff Schedule of the United 
States to provide for equitable duty treatment for certain wool 
used in making suits.

  see also American Apparel Manufacturers Association under H.R. 2196

      

                                


Statement of American Fiber Manufacturers Association

    Mr. Chairman: I appreciate the opportunity to comment on 
behalf of the American Fiber Manufacturers Association (AFMA), 
to the Trade Subcommittee regarding H.R. 1360. AFMA opposes 
this legislation.
    Many fine wool fabrics are constructed as a blend of wool 
and man-made fibers. The official U.S. government definition 
for wool fabric only requires that it contain 85% by weight of 
wool fiber. It is common, for instance, to utilize polyester or 
other man-made fibers for the additional 15%to incorporate 
fabric properties that only can be obtained through the 
inclusion of a man-made fiber. U.S. wool fabric manufacturers 
also make large quantities of other blended wool and man-made 
fabrics of varying ratios. For this reason, wool fabric 
manufacturers have served as longtime, important customers for 
U.S. manufactured fiber producers. As a result, legislative 
proposals that damage the wool fabric industry will also have 
an adverse impact on U.S. manufactured fiber sales.
    These tariff cuts are not necessary at this time. They are 
already undergoing a significant reduction as a part of the 
Uruguay Round/WTO. Any further unilateral cuts would undermine 
the current WTO tariff reduction schedule and preclude any 
reciprocal benefits for U.S. fiber, fabric, and apparel 
manufacturers as part of future WTO negotiations.
    Consequently, we strongly encourage you to oppose any legislative 
effort to reduce or eliminate U.S. wool fabric duties. Thank you for 
your attention regarding this important matter.

            Sincerely,
                                              Paul T. O'Day
      

                                


                        American Sheep Industry Association
                                                 September 20, 1999

    Dear Mr. Chairman:

    I appreciate the opportunity to comment to the Trade Subcommittee 
regarding our opposition to bill H.R. 1360. The American Sheep Industry 
Association (ASI) representing nearly 70,0000 producers of lamb and 
wool in the United States is adamantly opposed to this legislation. The 
legislation if enacted would have a significant and direct adverse 
impact on America?s wool fiber producers. If tariffs are cut on imports 
of Super 70's and 80's wool fabrics as the legislation calls for and 
eliminates import tariffs on Super 90's and finer-grade wool fabrics, 
imports of wool fabric will rise dramatically. This will result in a 
reduction of demand for domestic wool fabrics, and consequently, 
undermine the market for U.S. produced wool fiber. Today, part of the 
1998 domestic wool clip and one half of the 1999 clip remain unsold. 
Domestic wool mills which purchase the vast majority of our domestic 
wool production, are struggling against a record tide of imports and 
unable to buy American wool in the quantities available.
    The global situation makes the exporting of U.S. produced wool 
untenable. Australia?s long-term stockpile of wool has severely 
depressed worldwide wool prices for nearly a decade. Asia has long been 
one of the world?s largest wool buyers, however the financial crisis in 
Asia has eliminated them as a potential purchaser of wool.
    If this legislation is enacted, not only would the U.S. producers 
of the fine wools used in the manufacturing of the fabrics specifically 
covered by the bill be harmed (see attachment ?U.S. Production of Fine 
Wool Fibers?), so would the thousands of producers of medium grade 
wools. This price depression would result because the tariff cuts on 
fine wool fabric would cause a tremendous downward price compression on 
medium and lower grade wool fabrics.
    All sectors of agriculture production are undergoing severe 
economic conditions at this time, U.S. producers of wool are no 
exception. The enactment of H.R.1360 would just add to an already 
serious situation existing in the industry today. The producers of U.S. 
wool fiber are very much opposed to this legislation and the profound 
negative effect it will have on our industry.

            Sincerely,
                                               Peter Orwick
                                                 Executive Director

    [An attachment is being retained in the Committee files.]
      

                                


Statement of American Textile Manufacturers Institute

    This statement is submitted by the American Textile 
Manufacturers Institute (ATMI), the national association of the 
domestic textile mill products industry. ATMI's members account 
for approximately three-quarters of the textile fibers consumed 
in the United States and the great majority of wool fabrics 
used to make suits, the subject of H.R. 1360.
    ATMI strongly objects to H.R. 1360 because it is bad trade 
policy. It is an unwarranted and unilateral trade concession by 
the United States that will seriously injure U.S. producers of 
wool fabrics, forcing some of them out of business.
    The wool fabrics sector is the most import-sensitive 
segment of the U.S. textile industry and thus the one whose 
ranks have been the most depleted over the years. Last year, 
imports of wool fabric were 39.6 million square meters, 
compared to 105.8 million square meters of domestic production, 
and imports of wool apparel represented an additional 260.5 
million square meters. In five years' time, i.e. from 1993 to 
1998, imports of wool fabric have increased 18 percent and 
imports of wool apparel have increased 77 percent, while 
domestic production of wool fabric has declined 40 percent. 
These phenomena are not unrelated.
    Recognizing the extreme import sensitivity of wool 
textiles, Congress has for many years declined to reduce 
tariffs applied to imported wool fabrics despite repeated 
requests from abroad to do so. However, in the Uruguay Round 
negotiations, U.S. negotiators yielded to intense pressure from 
their European counterparts and agreed to reduce U.S. tariffs 
on wool fabric (of the type included in H.R. 1360) by more than 
one-third. Since these tariff cuts were incorporated in a 
massive Uruguay Round Agreements Act which could not be 
amended, they became law. Now, importers of wool fabric want 
another bite at the apple via H.R. 1360. There can be no 
question that enactment of this bill will lead to a further, 
large increase in imports of wool fabric (that is, after all, 
its purpose) and will threaten the well-being of every wool 
fabric producer in the United States (and their employees) and 
the continued existence of some of them (see attached Exhibit 
A.)
    H.R. 1360 is also poor trade policy from a tactical 
standpoint. Having agreed to the Uruguay Round tariff cuts 
noted above--a concession worth millions of dollars to 
countries exporting wool fabric to the United States--there is 
no reason for the United States to unilaterally grant further 
substantial tariff cuts exceeding those granted in the Uruguay 
Round when none of the beneficiary exporting nations have to 
grant anything to the United States in return. H.R. 1360 is, 
from a trade policy perspective, a giveaway, pure and simple. 
Trade policy should not be based on giving away the store or, 
in this case, the wool textile mill.
    The fabrics covered by H.R. 1360 are produced in the United 
States. Further, domestic mills, which are currently suffering 
from capacity underutilization, would be more than pleased to 
increase production to meet any demands for these fabrics. In 
recent years, they have spent millions of dollars on capital 
improvements, much of it for specialized equipment that cannot 
be used to make anything except the referenced fabrics. If this 
bill is enacted, thousands of U.S. wool textile jobs would be 
imperiled.
    Finally, given that there is significant domestic 
opposition to this legislation and that it would have a 
significant adverse budget impact (according to last year's CBO 
analysis, it would cost the Treasury approximately $22 million 
annually), we do not believe that such a controversial and 
costly measure should be smuggled through Congress as part of a 
larger package of otherwise non-controversial and relatively 
non-costly miscellaneous tariff bills.
    For all these reasons, we urge that H.R. 1360 not be 
approved either as part of a larger package or as a stand-alone 
bill.
      

                                


Forstmann Files for Chapter 11, Cuts 50% of Workforce 

    New York--Forstmann & Co. on Friday filed for Chapter 11-
bankruptcy court protection in Manhattan. The Chapter 11 
petition confirms a report in Friday's DNR that Forstmann would 
file.
    Rodney Peckham, president and chief executive officer, said 
in an affidavit filed with the petition that the company will 
immediately cut over 50 percent of the company's workforce. 
Forstmann has 1100 employees, of which 900 are full-time. A 
source familiar with the bankruptcy said that the cuts will 
affect hourly employees at the company's two adjacent plants in 
Georgia.
    Peckham explained that the company earlier this month 
``exhausted'' its borrowing availability under its credit line. 
The liquidity problem arose from restructuring efforts on the 
past year and costs connected to the 1998 startup of its 
subsidiary, Forstmann Apparel Inc., which also filed for 
Chapter 11 protection.
    He added that Forstmann has been in contact with other 
parties who are interested in buying or merging with the 
company. Butler, Chapman & Co. Inc. is the woolen and worsted 
fabric manufacturer's investment advisor. Sources said the 
company has been in talks with at least two companies for a 
possible sale of the company. It was not immediately known 
whether there were any plans for the subsidiary to be sold 
separately from Forstmann & Co.
    The company, which plans to continue in operation, has a 
$50 million debtor-in-possession financing facility provided by 
a bank group led by Bank of America. It also hired Richard 
Redden, a turnaround consultant at OSNOS Associates Inc., who 
will act as interim chief operating officer.
    Forstmann's Chapter 11 petition listed total liabilities of 
$58.6 million, including $50.5 million in secured debt and $7.2 
million in unsecured debt. The company's top six secured debt 
holders are syndicate members that provided the company with 
its credit line. Unsecured creditors include: Richter Yarns 
Ltd, Ontario, Canada, $600,730; Prouvost USA, Inc., Jamestown, 
S.C., $258,291, and the Kent Manufacturing Co., Pickens, S.C., 
$81,570.
    Forstmann listed total assets of $88.2 million.

From the Daily News Record, July 26, 1999, by Vicki M. Young.
      

                                


Statement of Burlington Industries, Inc., Greensboro, North Carolina

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade Subcommittee regarding the opposition of Burlington 
Industries, Inc. to H.R. 1360, a bill to immediately reduce 
some and suspend other tariffs on high-end wool fabrics. 
Burlington Industries, Inc., in existence for over 75 years, is 
a diversified textile manufacturer. A large, important portion 
of Burlington''s business is wool fabric production. Burlington 
is the largest domestic manufacturer of worsted wool fabric and 
produces very large volumes of all the fabric types covered by 
H.R. 1360. Cutting tariffs by nearly 50% on so-called Super 
70's and 80's wool fabric, and totally eliminating the tariffs 
for several years on so-called Super 90's and above wool 
fabrics, as called for under H.R. 1360, would be a direct and 
extremely harmful blow to our business, our employees, and the 
multi-million dollar investments we have made in this area. 
These investments and production plans were made based on the 
integrity of the duty structures under the WTO and the NAFTA. 
Changing these important wool fabric tariffs now would 
simultaneously undermine our new investments and jeopardize the 
viability of our existing operations.
    Some proponents of this legislation have incorrectly stated 
that these tariff cuts/suspensions are necessary because there 
is not sufficient domestic availability for these fabrics. This 
is absolutely not the case.
    In the fabrics designated as ``Super 100's'' and above in 
the legislation, the domestic industry already produces a 
significant portion of the demand for these fabrics and has the 
capacity to produce even larger volumes if the orders are 
forthcoming. Burlington, in conjunction with Warren of 
Stafford, a Connecticut wool fabric producer, already produce 
over 60% of the U.S. demand for the ``Super 100's'' and above 
wool fabric for the men's suit market.
    For the fabrics designated as ``Super 70's/80's/90's,'' 
Burlington Industries and other domestic manufacturers produce 
very large volumes of these fabrics for use in men's/boy's 
suits, sports coats, and slacks, as well as women's wool 
tailored apparel.
    Companies in Mexico and Canada also produce these same 
fabrics. NAFTA fabrics are available to U.S. apparel 
manufacturers duty-free and quota-free. These Mexican and 
Canadian companies also have capacity to produce even larger 
volumes if the orders are received from U.S. apparel makers. 
Additionally, Burlington's wool fabric facility in Mexico will 
commence production next year and be able to produce exactly 
the fabrics covered by this legislation, as well as a wide 
range of other worsted wool fabrics. For this facility, the 
wool processing (scouring, combing, etc.) and wool top making 
and dyeing will be performed in our North Carolina and Virginia 
facilities; the yarn and fabric will be made in Mexico. These 
NAFTA qualifying fabrics will be available to U.S. suit 
producers duty and quota free.
    Historically, the U.S. Congress has allowed unilateral 
tariff reductions/suspensions only in those situations where 
there is absolutely no domestic availability of the particular 
product considered. Collectively, current U.S. production of 
70's and above wool fabric exceeds 20 million square meters 
annually; capacity exists to produce much more.
    Enactment of H.R. 1360 not only would harm Burlington and 
other domestic manufacturers of these fabrics, but also would 
have impact on suppliers further down the production chain. 
Domestic companies, which make the top and yarn for these 
fabrics and the woolgrowers who provide the raw fiber for these 
fabrics would be harmed. U.S. woolgrowers sell virtually all of 
their clip to U.S. textile companies. If wool fabric tariffs 
are cut/suspended, U.S. apparel companies and importers will 
have a strong, built-in incentive to utilize even more imported 
fabric, thereby greatly decreasing demand for the domestic 
fabrics cited in the bill. This will in turn result in lesser 
demand for U.S. yarns and raw wool. In addition, it would 
decrease demand for U.S. wool fabrics of lower grades than 
those specified in the bill.
    In Burlington's opinion, it is bad trade policy to 
unilaterally cut tariffs, particularly on very import-sensitive 
products. And to do so without the potential for U.S. producers 
to receive some reciprocal trade benefits from foreign 
competitors would be a travesty of justice. The U.S. is 
preparing to enter a multilateral trade liberalization round in 
November 1999, and, while we are very much against further 
tariff cuts, a multilateral round would be the only appropriate 
place to do this, not by unilateral, Congressional action. This 
particular segment of the textile industry took the largest hit 
the Uruguay Round, having to accept tariff cuts of about 30% on 
wool fabrics. The possibility of now being forced to bear up 
under additional, immediate tariff cuts is unthinkable.
    The language of this proposed legislation is also totally 
unenforceable. The legislation calls for tariff reduction/
suspension on fabrics defined as ``Super 70's'' and up. These 
are marketing, not technical, terms. There is no accepted 
domestic or international definition of ``Super XX'' fabrics. 
There is no way U.S. Customs could monitor or enforce such 
legislation. There is no doubt that massive fraud would occur, 
i.e. importers bringing in other types of fabric and calling 
them ``Super 70's'' and above in order to receive benefits of 
the much lower tariffs, and exporters doing the same. This 
legislation cannot be policed. Many billions of dollars worth 
annually in textile import fraud is already occurring, and 
Customs can't stop it.
    The wool fabric and yarn sector of the domestic textile 
industry is already being hit very hard by textile product 
imports. The damage has been extreme. Since January of this 
year Burlington Industries alone has had to announce layoffs of 
1,450 of our employees in our wool fabric division. The lay-
offs are due to the tremendous surge in imports from the Asian 
countries, as well as ongoing imports of suits, sport coats, 
and slacks from Canada. Canada continues to abuse the Tariff 
Preference Level (TPL) negotiated in the Canadian Free Trade 
agreement and NAFTA, by flooding the U.S. with men's suits made 
of foreign fabric. This TPL issue is the root of the problem 
and is the primary reason that some apparel companies are 
pushing for this legislation. It would be much more reasonable 
and fair to correct the TPL problem than to create additional 
problems by cutting tariffs on these fabrics, thereby having a 
much more negative impact on the wool textile/fiber sector of 
this industry.
    The above are just a few of the very valid reasons for our 
strong objection to this ill-conceived, damaging legislation. 
Burlington Industries wants very much to continue our wool 
fabric production business, and our remaining 5,800 wool fabric 
employees would very much like to keep their jobs, but we are 
at grave risk if H.R.1360 is enacted.
      

                                


                            Carleton Woolen Mills, Inc.    
                                      Winthrop, Maine 04364
                                                 September 17, 1999

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

    Dear Mr. Singleton:

    On behalf of the Northern Textile Association (NTA), I am writing 
to express strong opposition to H.R. 1360, legislation designed to 
severely reduce and in some cases eliminate totally, existing U.S. 
duties on certain grades of wool fabric. The NTA represents over 80% of 
domestic wool fabric and yarn producers, many of which manufacture 
products that would be directly affected by this legislation.
     Our reasons for objection to H.R. 1360 are manifold, including the 
following points:
     1. All of the fabrics covered by this bill are manufactured in the 
U.S. in large quantities. The companies that produce these fabrics 
employ thousands of U.S. workers whose jobs will be jeopardized by the 
severe tariff cuts envisioned in this legislation. In addition, the 
U.S. wool fabric industry is extremely depressed at this time. Several 
domestic wool fabric producers have been forced to cut production and 
staffing in response to the flood of low-priced goods flowing out from 
the depressed economies of East Asia. We have witnessed wool fabric 
industry layoffs and plant closings in Rhode Island, New Hampshire, 
Maine, Georgia, South Carolina, North Carolina, Virginia, and Oregon. A 
decision by Congress to cut existing U.S. duty rates will only 
exacerbate the poor market conditions that have led to the lay-off of 
thousands of wool fabric workers over the past eighteen months.
     2. The U.S. is currently reducing the tariff on all wool fabrics 
by nearly one-third as a result of the Uruguay Round agreement. We are 
in 5th year of a phase down schedule under the WTO that will drop U.S. 
wool fabric duties from 36.1% to 25% in 2004. Yarn and fabric makers 
have invested millions of dollars in new plants and equipment in recent 
years based on this tariff phase down schedule, negotiated by the 
Executive Branch and approved through implementing legislation by 
Congress. If Congress allows further, unforeseen tariff cuts, the 
investment and long range planning activities of various companies will 
be destroyed. Moreover, it would be extremely unwise for Congress to 
make unilateral tariff cuts in this area just three months shy of the 
upcoming Seattle WTO talks. If it is deemed necessary to further reduce 
these duties, it should at least be done through a negotiation where 
U.S. wool fabric producers could possibly obtain reciprocal market 
opening concessions from foreign trading partners.
     3. H.R. 1360 would provide significant incentives for Customs 
fraud. The language in the bill (Super 70's, 80's 90's etc.) refers to 
vague marketing terms, not precise definitions of measurement. They 
have no correspondence in international terminology or harmonized 
tariff schedules. U.S. Customs simply does not have the personnel or 
expertise to adequately enforce such vague classification.
     Finally, the bill as drafted would cost the U.S. treasury nearly 
$15 million annually in lost tariff corrections or suspensions. For all 
these reasons, we believe it is totally inappropriate for the Ways & 
Means committee to include H.R. 1360 in any miscellaneous tariff 
package. Moreover, we believe that the committee should object to 
moving this flawed legislation in any form during the remainder of the 
106th Congress.
     Thank you for your attention to our concerns, and if I can provide 
you with any further information on this matter, please do not hesitate 
to contact me.

            Sincerely,
                                       J. Marshall McDuffie
                                     Sr. Exec. Vice President, Mfg.
      

                                


                                                     August 9, 1999

The Honorable Philip M. Crane
Chairman
Subcommittee on Trade
1104 Longworth Building
Washington, DC 20515-6354

    Dear Chairman Crane:

    We are writing to express our strong opposition to HR 1360. We are 
among the scores of Members who have constituents that stand to be 
negatively impacted by the tariff reductions that this bill would 
unilaterally impose on various imported wool fabrics.
    Enactment of HR 1360 in its entirety or any of its provisions would 
have a wide range of adverse effects on American wool fiber, top, yarn 
and fabric producers. We appreciate this opportunity to highlight some 
of the most significant reasons why this measure should be rejected. We 
have also included a fact sheet which provides additional information 
concerning the short-comings of this measure as well as organizations 
opposing it.
    First, as part of the Uruguay Round/WTO agreement, the U.S. is 
currently reducing tariffs on imported wool fabrics by approximately 
thirty percent. In fact, wool fabrics are subject to greater duty 
reductions than any other textile product. Furthermore, U.S. wool 
textile quotas are being completely eliminated under the WTO/Uruguay 
Round. Hundreds of millions of dollars of investments made by domestic 
wool fabric producers have been based on the Uruguay Round/WTO and 
NAFTA trade rules and timetables. Unilaterally changing these 
agreements/rules now would completely undermine these investments and, 
in reality, put the wool fabric industry and all other U.S. industries 
on notice that they cannot rely on the integrity of U.S. trade 
agreements.
    Second, contrary to the claims of some of the proponents of this 
bill, the U.S. wool fabric industry annually produces over 10 million 
yards of the so-called Super 70's, 80's and 90's wool fabrics. In the 
higher end--Super 100's and above--the U.S. wool fabric industry 
produces more than sixty percent (over 1.5 million yards) of the 
domestic suit manufacturers' requirements. Additionally, the domestic 
wool fabric industry has the capacity to produce even greater amounts 
of Super 70's, 80's, 90's, 100's and above wool fabrics.
    Third, as you know, the U.S. will enter into a new round of WTO 
trade liberalization negotiations in less than six months. Even if a 
case could be made for eliminating and reducing U.S. tariffs in this 
sector, it would be totally counter to our interests to do so now. 
Making unilateral U.S. tariff cuts outside of the WTO negotiating 
context would assure that the our country would not have an opportunity 
to obtain any trade concessions whatsoever in return from foreign 
competitors.
    Finally, this legislation will not correct the problem of harmful 
wool apparel imports from Canada under NAFTA as the proponents claim. 
The loophole in NAFTA, which allows Canada to make wool apparel with 
non-NAFTA fabric and flood the U.S. under the NAFTA zero tariff rate, 
is the problem and should be addressed by the Administration. Many 
members who have signed this letter have urged the Administration to 
take just this action. We believe that Congress should urge the 
Administration to fix the NAFTA loophole--not cut tariffs on wool 
fabric imports which will severely harm the nearly 90,000 U.S. workers 
in the wool fiber, top, yarn and fabric industries. These important 
sectors of our economy are already reeling under record levels of 
imports. Imports have already caused the loss of one-third of U.S. wool 
fabric jobs within the past three years.
    We urge the Committee to oppose this bill either as a stand-alone 
measure or as part of any other legislation. It is not a miscellaneous 
tariff bill. Instead, it will seriously hurt the wool fiber, top, yarn 
and fabric industries in the United States. We welcome the opportunity 
to discuss this issue further with you and your staff.

            Sincerely,

SAM GEJDENSON

  Member of Congress

HOWARD COBLE

  Member of Congress

  

CHARLIE STENHOLM

  Member of Congress

JOE SKEEN

  Member of Congress

  

CHARLES NORWOOD

  Member of Congress

PATRICK KENNEDY

  Member of Congress

  

WILLIAM JENKINS

  Member of Congress

ROBIN HAYES

  Member of Congress

RICHARD BURR

  Member of Congress

BOB GOODLATTE

  Member of Congress

VIRGIL GOODE

  Member of Congress

RICK HILL

  Member of Congress

JOHN SPRATT

  Member of Congress

MELVIN WATT

  Member of Congress

DAVID PRICE

  Member of Congress

JAMES TRAFICANT

  Member of Congress

LAMAR SMITH

  Member of Congress

JOHN OLVER

  Member of Congress

PAT DANNER

  Member of Congress

DAN BURTON

  Member of Congress

EARL BLUMENAUER

  Member of Congress

JOHN JOSEPH MOAKLEY

  Member of Congress

RICK BOUCHER

  Member of Congress

MAC COLLINS

  Member of Congress

TERRY EVERETT

  Member of Congress

NANCY JOHNSON

  Member of Congress

JAMES HANSEN

  Member of Congress

MIKE MCINTYRE

  Member of Congress

MICHAEL SIMPSON

  Member of Congress

  

SUE MYRICK

  Member of Congress

BOB ETHERIDGE

  Member of Congress

CHARLES TAYLOR

  Member of Congress

WALTER B. JONES, JR.

  Member of Congress

JOHN PETERSON

  Member of Congress

HELEN CHENOWETH

  Member of Congress

HENRY BONILLA

  Member of Congress

DUNCAN HUNTER

  Member of Congress

CHARLES PICKERING

  Member of Congress

EVA CLAYTON

  Member of Congress

  

  

  

  

      

                                


Wool Fiber, Yarn, Fabric Coalition

Points in opposition to H.R. 1360 and S. 218

Identical bills to cut/eliminate U.S. tariffs on imported wool fabrics

     The fabric types covered by the bills are readily 
available from U.S. producers.
     In six months, a new round of WTO trade 
liberalization talks will begin in Seattle. It would be 
tantamount to unilateral trade disarmament for the Congress to 
cut any U.S. tariffs now, outside of the WTO negotiating 
context.
     The bills purportedly would, but do not, address 
the problem of harmful wool apparel imports from Canada under 
NAFTA. The bills do not correct Canada's continuing misuse of a 
NAFTA loophole, which allows them to make wool apparel with 
non-NAFTA fabric and flood the U.S. under NAFTA's (zero) tariff 
rate. The Administration is aware of, and should fix, this 
ongoing, serious problem.
     The bills will harm the nearly 90,000 U.S. workers 
in the wool fiber, top, yarn, fabric industry.
     Congress should not make unilateral tariff cuts in 
the midst of an import crisis. The 1998 U.S. trade deficit was 
a record $168 billion with textiles/apparel comprising $49.2 
billion. 1999 textile/apparel imports have grown 13% over the 
same period in 1998. Job/business loss is severe.
     Record levels of imports have already resulted in 
U.S. wool yarn & fabric plant closings and lay offs of over 
1,600 workers in 1998, 1,600 more in January and February 1999, 
for a minimum of 6,300 jobs lost over the last 3 years--a one 
third decrease in wool yarn & fabric employment.
     Slashing tariffs on wool fabrics will give an 
additional dramatic price advantage to imports causing further 
market shift toward imports and away from U.S. producers.
     The bills will undermine hundreds of millions of 
dollars in investments made by domestic wool fabric producers 
who relied on the integrity of U.S. trade laws, tariffs, the 
NAFTA, and the new WTO in making these investment decisions.
     The bills will cause serious damage to U.S. 
woolgrowers who export virtually no wool, have U.S. wool top, 
yarn and fabric producers as their sole customers, and are 
currently seriously impacted by increased lamb meat imports 
according to a February 1999 U.S. ITC ruling.
     This Legislation is virtually unenforceable. U.S. 
customs has inadequate resources, the bill's classification 
descriptions are vague, and importers can easily avoid tariffs 
by falsely declaring the quality level of wool fabrics.
     Under the WTO, U.S. wool fabric tariffs are 
currently in the process of being reduced by 30% and import 
quotas are being eliminated. Further unilateral tariff cuts 
will be an additional assault on the U.S. wool textile industry 
that is simply unconscionable.
      

                                


U.S. WOOL FABRIC TARIFF CUTS / ELIMINATION 

(S.218 & H.R.1360)

Partial listing of groups that strongly oppose, and whose members would 
               be adversely impacted by this legislation.

American Fiber Manufacturers Assn.
American Textile Manufacturers Institute
American Sheep Industry Assn., Inc.
American Yarn Spinners Association
Arizona Wool Producers Association
Boston Wool Trade Association
California Wool Growers Association
California Wool Marketing Association
Canadian Co-op Woolgrowers LTD-Ont.
Connecticut Sheep Breeders Assn.
Colorado Wool Growers Association
Georgia Textile Manufacturers Assn.
Idaho Wool Growers Association
Illinois Lamb & Wool Producers, Inc.
Kern County, CA, Woolgrowers Assn.
Maryland Sheep Breeders Association
Michigan Sheep Breeders Association
Mid-States Wool Growers Cooperative Association--OH
Mid-States Wool Growers Cooperative Association--SD
North American Textile Council--UNITED STATES, MEXICO, CANADA
North Carolina Textile Manufacturers Association
Montana Wool Growers Association
Nevada Wool Growers Assn.
Northern Textile Association
Ohio Sheep Improvement Association
Producers Marketing Cooperative--TX
New Mexico Woolgrowers Assn.
Sheep Producers of Hawaii
South Carolina Manufacturers Alliance
South Dakota Sheep Growers Assn.
Tennessee Sheep Producers
Texas Sheep & Goat Raisers Assn.
Tri State Wool Marketing Association
U.S. Wool Marketing Association
Utah Wool Growers Association
Washington State Sheep Producers
West Texas Wool and Mohair Assn.
Wyoming Wool Growers Association

  Partial listing of firms directly involved in wool products (fiber, 
   top, yarn, or fabric) that oppose and stand to be harmed by S.218/
                                H.R.1360

Amicale Industries, Inc.--NC, PA

Anodyne, Inc.--TX

Ballinger Wool & Mohair Inc.--TX

Blackwell Wool & Mohair Co., Inc.--TX

Burlington Industries, Inc.--AR, MS, NC, NY, SC, TN, VA

Carleton Woolen Mills, Inc.--ME

Center of the Nation Wool, Inc.--SD

Cleyn & Tinker, Inc.--NY

Crescent Woolen Mills--WI

Crown Yarn Dye Company, Inc.--MA

Desmon Mills, Inc.--RI

Dishman International Co., Inc.--TX

Dorr Woolen Company--NH

Dyecraftsmen, Inc.--MA

Easthampton Dye Works, Inc.--MA

Edwin Borgh Wool & Textile Fibers--PA

Eldorado Wool Company, Inc.--TX

Faribault Woolen Mill Co.--MN

Forstmann & Company, Inc.--GA

Forte, Dupee, Sawyer Co.--MA

Groenewold Fur & Wool Company--IL

Hanora Spinning, Inc.--RI, SC

L.W. Packard & Co., Inc.--NH

International Woolen Co., Inc.--ME

Jagger Bros.--ME

The Kent Manufacturing Company--SC

Lometa Wool & Mohair Co.--TX

Mid-States Wool--OH, KS

Mt. Jefferson Woolens--OR

NAFTA Textile Mills--RI

Northwest Woolen Mills--RI

Ohsman & Sons Co., Inc.--IA

Ott & Zimmermann, Inc.--NJ

Ozona Wool & Mohair Co.--TX

Pendleton Woolen Mills--OR, WA

Priour-Varga Wool and Mohair Inc.--TX

Prouvost USA, Inc.--SC

Ranchman's Wool and Mohair Inc.--TX

R.C. Elliott & Co.--UT

Robinson Mfg.--ME

Roswell Wool and Mohair--NM

Roswell Livestock & Farm Supply--NM

Sanderson Wool Commission--TX

Southwestern Wool & Mohair, Inc.

Uvalde Producers Wool & Mohair--TX

Warren Corporation--CT

Wellman, Inc.--Miss., NC, NJ, SC

Westwood, Inc.--MA, RI

Western Wool & Mohair Co.--TX

Woodbury Wool Co.--CO

Wool Growers Central Storage--TX

The Wool Shed--UT

Woolrich, Inc.--PA

The Worcester Company--RI

    DuPont and Celanese also oppose and stand to be harmed by S.218/
H.R.1360, because their fibers are commonly blended into wool and other 
fabrics, and because if enacted, this legislation would set a dangerous 
precedent for making future tariff cuts on imports of other types of 
fabrics and products. The National Cotton Council also opposes the 
legislation due to it's precedent-setting nature.
      

                                


        Georgia Textile Manufacturers Association, Inc.    
                                     Atlanta, Georgia 30303
                                                 September 15, 1999

Honorable Phil Crane
Chairman
Subcommittee on Trade
U.S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515

    Dear Mr. Chairman:

    On behalf of the Georgia Textile Manufacturers Association, which 
represents the more than 104,000 Georgians employed in the state's 
textile industry, I wish to convey our opposition to H.R. 1360, which 
would reduce, and in some instances eliminate, the tariffs on certain 
wool fabrics.
    The bill would set a dangerous precedent for U.S. trade policy. In 
six months, a new round of WTO trade liberalization talks will begin in 
Seattle, and it would be tantamount to unilateral trade disarmament for 
the Congress to cut any U.S. tariffs now, outside of the WTO 
negotiating context.
    The bill would undermine hundreds of millions of dollars in 
investments made by domestic wool fabric producers who relied on the 
integrity of U.S. trade laws, tariffs, NAFTA and previous WTO 
agreements in making investment decisions. Under the current WTO 
agreement, U.S. wool fabric tariffs are already in the process of being 
reduced by 30 percent--representing greater duty reductions than for 
any other textile product--and import quotas are being eliminated.
    Drastic, unilateral tariff cuts such as those proposed in H. R. 
1360 would have a severe negative impact on U.S. manufacturers of wool 
fabrics and the thousands of people they employ, including those in 
Georgia.
    Thank you for your consideration of our views with regard to this 
important matter.

            Sincerely,
                                            G. L. Bowen III
                                                          President

Cc: Mr. Jim Robinson
      

                                


                                         State of Idaho    
                                         Secretary of State
                                                 September 20, 1999

    MR. CHAIRMAN:

    I appreciate the opportunity to comment to the Trade Subcommittee 
with respect to my strong opposition to H.R. 1360, The Wool Fabric 
Tariff Cut/Elimination Legislation.
    Idaho has historically depended upon the wool growing industry 
which has contributed greatly to the economy of this state. The sheep 
numbers at one time in Idaho alone amounted to over 2\1/2\ million 
head. That number now is less than 200,000 head and presently in a 
free-fall in the entire U.S. because of the high wool fabric imports to 
the U.S. we cannot afford to lose anymore woolen mills. The approval of 
H.R. 1360 would cause irreparable damage to the wool and sheep 
industries of the United States.
    Recently I witnessed a producer offer his entire clip of this 
year's wool in exchange for the cost of shearing the sheep. The sheep 
shearing company turned the offer down because the company would be 
losing money. The woolen mills cannot offer a price for the producer to 
survive in the wool growing business.
    Nothing wears better than wool. I recall in 1951 during the cold 
war with the Soviet, Russia began to stockpile wool. The united states 
got worried and also began to stockpile wool. Wool prices went upward. 
That day may come again; but what are we going to do if we have no 
supply of wool in this country!
    I cannot emphasize enough that the imports of wool fabrics from 
foreign countries have already perilously affected the United States 
wool textile industry, and also the wool production ability. The defeat 
of H.R. 1360 is critically essential. The passage of H.R. 1360 would be 
a death blow to our woolen mills and wool industry.

                                          Pete T. Cenarrusa
                                 Secretary of State, State of Idaho
      

                                


                             Kent Manufacturing Company    
                                          Pickens, SC 29671
                                                 September 16, 1999

Re: Opposition to H.R. 1360, Wool fabric tariff cut/elimination 
        legislation

    MR. CHAIRMAN:

    I appreciate the opportunity to comment to the Trade Subcommittee 
regarding our opposition to bill H.R. 1360.
    The Kent Manufacturing Company is a major manufacturer of yarns 
located in Pickens, SC. Several years ago Kent made significant 
investment in expanding our operations to specifically manufacture 
yarns for high-end wool worsted fabrics, exactly the types of fabrics 
covered by legislation H.R. 1350. We provide these yarns for a number 
of U.S. companies who chose not to make these yarns themselves or do 
not have the capacity to make enough of these high-end yarns. These 
yarns go into fabrics designated as ``Super 70's/80's/90's'' and 
``Super 100's'' and up, exactly the types of fabrics covered in this 
legislation. To make the tariff cuts as proposed in this legislation 
would certainly be detrimental not only to the U.S. wool fabric 
companies that produce these fabrics, but also for companies like Kent 
who make the yarns for these fabrics.
    In addition to the business disadvantages of this legislation, it 
is in our view certainly not a good trade policy to make unilateral 
tariff cuts, particularly of the levels considered in this legislation, 
when there is an upcoming multilateral trade liberalization round 
beginning in Seattle in December. While we are very much against 
significant tariff cuts, a multilateral round is the place to make any 
cuts, not in a unilateral environment by the Congress of the U.S.

            Sincerely,
                                               Mark B. Kent
                                                                CEO
      

                                


                           L.W. Packard & Company, Inc.    
                               Ashland, New Hampshire 03217
                                                 September 17, 1999

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

Subject: H.R. 1360 Wool Fabric Tariff (WFT) Cuts

    Dear Mr. Singleton:

    I am writing you today as President of the L.W. Packard Co. of 
Ashland, New Hampshire to convey to you in the strongest possible terms 
my staunch opposition to H.R. 1360, which proposes to cut wool fabric 
tariffs on high-end wool fabrics. This legislation calls for severely 
reducing, and in some cases eliminating totally, existing U.S. duties 
on certain grades of wool fabric. We have reviewed the various aspects 
of the bill and we can only draw the conclusion that it would be 
devastating to not only L.W. Packard, but to much of the woolen textile 
industry in the United States.
    Before spelling out the many and varied reasons for our opposition 
to H.R. 1360 I would like to give you some background on my company so 
that you may better appreciate my position and why I believe that this 
proposal is unfair and not in the best interests of the United States 
and the woolen textile industry.
    L.W. Packard is a privately owned company which was founded in 
Ashland, New Hampshire in 1916. Until recently we have employed 300+ 
individuals, most of whom come from Ashland, a community of fewer than 
2,000 people. In 1998 we paid out $7,000,000 in wages and salaries. 
Additionally, we have over the last three years invested $7,000,000 in 
new plant and equipment, nearly all of which has been dedicated to the 
manufacture of fine woolens, which is the area in which H.R. 1360 
proposes to reduce or eliminate tariffs. Another $650,000 has been 
allocated to be spent on environmental improvements.
    In addition to manufacturing woolen fabric we produce cashmere, 
camel hair, alpaca, angora, and mohair fabric. These ``luxury'' fabrics 
would be especially hard hit by the relaxation and/or elimination of 
tariffs on fine woolen fabrics as proposed by H.R. 1360.
    In 1995 Textile World magazine selected L.W. Packard as one of the 
Top Ten Textile Companies in the World. No other company of our size 
has ever received such global recognition for its efforts in 
successfully representing the textile interests in this country. We 
take great pride in all that we have accomplished, and we are extremely 
concerned that a reduction in wool fabric tariffs will negate all the 
investments we have made in new plant, people, and equipment.
    At the present time the woolen fabric industry is extremely 
depressed and any additional cuts to U.S. tariffs would put in jeopardy 
thousands of U.S. jobs. One of the principal reasons why the domestic 
woolen industry has suffered in recently years can be directly related 
to the greatly increased level of imports. If all competition were 
carried out on a level playing field, we could better understand the 
rationale behind the call to further reduce tariffs. However, this is 
not the case, unfortunately, as we invest heavily in environmental 
controls and paying our people a fair wage, whereas much of our 
offshore competition is not concerned with these very important issues.
    The elimination of the tariff on high-end wool fabrics will only 
further depress prices and market conditions for producers of lower 
grades of wool fabrics. This is why even those manufacturers not 
producing the type of fabrics in H.R. 1360 strongly oppose the bill. 
Thus, it is not just the high-end producers of woolen fabric that will 
be adversely affected by the proposed legislation. A much larger 
segment of the market will be hurt if the bill is approved.
    It should also be noted that the U.S. is presently reducing the 
tariff on all wool fabrics by nearly one-third as a result of the 
Uruguay Round agreement. We are in the fifth year of a phase down 
schedule under the WTO that will drop wool fabric duties from 36.1% to 
25% in 2004. The woolen textile industry has invested millions of 
dollars in new plants and equipment in recent years based on the tariff 
phase down schedule, which was negotiated by the Executive Branch and 
approved through implementing legislation by Congress. If it is deemed 
necessary to further reduce duties on woolen fabrics, it should at 
least be done through negotiation where U.S. woolen fabric producers 
could possibly obtain reciprocal market opening concessions from 
foreign trading partners.
    The extremely vague classification standards included in the bill 
would virtually make it impossible for Customs to ensure compliance. It 
has neither the resources or the expertise to put in place adequate 
enforcement mechanisms, and as a result, significant incentives for 
Customs fraud would exist.
    In summary, I would like to emphasize that I find H.R. 1360 to be a 
seriously flawed piece of legislation which will further exacerbate the 
poor market conditions which currently exist in the woolen fabric 
industry. This will only add to the layoffs and plant closings that 
have been occurring over the last several years. Please believe me when 
I say that our concerns are genuine. We are not crying wolf. A serious 
problem exists and the passing of the proposed legislation can only be 
catastrophic for my company and the entire woolen fabric industry.
    I thank you for your consideration of the concerns which I have 
noted above. If I can in any way provide you with additional 
information, please do not hesitate to contact me. Hopefully, I have 
been able give you input which will be helpful to you as you consider 
H.R. 1360.

            Yours sincerely
                                            John L. Glidden
                                                          President

dlb 9/16/1999
      

                                


Statement of National Retail Federation

                            I. Introduction

    The National Retail Federation (NRF) is the nation's 
largest retail trade association with membership that comprise 
all retail formats and channels of distribution, including 
department, specialty, discount, catalogue, Internet, and 
independent stores. In its role as the retail industry's 
umbrella group, NRF also represents the entire spectrum of 
retailing, including 32 national and 50 state retail 
associations. NRF's members represent an industry that 
encompasses over 1.4 million U.S. retail establishments, 
employs more than 20 million people--about 1 in 5 American 
workers--and registered sales of $2.7 trillion in 1998.
    NRF supports the provisions in H.R. 1360 that would lower 
or eliminate crippling tariffs on wool fabrics used by American 
workers to produce high-quality men's suits, jackets and 
trousers. Such tariff reductions would allow American wool suit 
manufacturers to be more competitive with imported wool suits, 
jackets and trousers at the same time it gives American 
consumers the opportunity to choose from a wider range of more 
affordable products.
    Retailing is all about providing customers with a variety 
of competing brands and labels at various price points. But 
such competition is limited for high-quality men's suits, which 
account for just under 60 percent of all suits sold in the 
United States, according to the market research firm NPD. Most 
of the suits sold at the higher price points ($500 to $2,000) 
are made with very fine, high-quality (and expensive) wool 
fabrics made in countries like Italy and England. Such fabrics 
are not produced in the United States. When U.S. suit 
manufacturers import those fabrics, they must pay tariffs of 
31.7 percent, which translates into an increase of $60 to $200 
per suit. Their counterparts in Canada, for example, pay 
tariffs of 0-16 percent on such fabric.
    Therefore, wool suit manufacturers in Canada enjoy a 
significant cost advantage over American wool suit 
manufacturers that enables Canadian manufacturers to sell more 
of these expensive suits in the United States. In addition, 
they are able to export these suits (up to certain limits) to 
the United States duty-free under the North American Free Trade 
Agreement.\1\
---------------------------------------------------------------------------
    \1\ Restricting imports of Canadian wool suits and jackets is not 
an option because it would violate NAFTA, lead to a nasty trade 
dispute, and be unfair to American consumers by raising already high 
prices.
---------------------------------------------------------------------------
     H.R. 1360 would correct this disadvantage U.S. wool suit 
manufacturers face.
     NRF supports this legislative correction for two important 
reasons. First, it would give our customers greater options. We 
want them to be able to buy fine suits at great values whether 
they are made in Canada, the United States, or elsewhere. By 
lowering the cost of producing such suits in the United States, 
American producers would be able to compete and retailers would 
be able to source more of these suits from domestic producers.
     Second, it would preserve American production and related 
apparel jobs. Retailers prefer whenever possible to source 
goods domestically. U.S. producers are better able to provide 
us with faster turn-around, and the logistics of purchasing 
from U.S. suppliers are much less complicated than they are for 
foreign producers. A not inconsequential additional benefit is 
that increased U.S. sourcing will help to stem the loss of 
apparel jobs in the wool suit sector. A study by the Tailored 
Clothing Association (TCA) estimates that the industry has lost 
30,000 jobs in the past decade as a result of the high tariffs. 
It is notable that UNITE! has joined U.S. retailers and 
manufacturers in supporting this tariff change provision.
     H.R. 1360 would have no negative impact on the American 
wool industry, which the tariffs are supposed to protect. This 
is because the type of wool used to make these fine fabrics is 
not produced in commercial quantities in the United States. 
U.S. wool quality is concentrated in the medium grades. 
Moreover, the U.S. textile industry is not producing the 
fabrics necessary to make these suits in the United States. 
According to the TCA, U.S. fabric mills primarily produce 
woolen fabrics used in blankets and outerwear, not worsted 
fabrics used in suiting. U.S. fabric mills also are reluctant 
to accept small orders on wide patterns and variety selection.
     The tariff changes in H.R. 1360 are long overdue and we 
urge the Committee to pass them as soon as possible.
      

                                


Statement of Dennis M. Julian, Executive Vice President, North Carolina 
Textile Manufacturers Association, Raleigh, North Carolina

    Mr. Chairman, I appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to H.R. 1360. 
The North Carolina Textile Manufacturers Association (NCTMA) is 
a not-for-profit trade association which represents fiber and 
textile producers in North Carolina. The textile industry is 
the state's largest manufacturing employer. Of the 808,200 
manufacturing jobs in North Carolina in July 1999, 154,900 were 
in textiles. In addition, North Carolina leads the nation in 
textile employment and production.
    In this state alone, the tariff reductions and eliminations 
proposed by this legislation will negatively impact more than 
1,300 wool fabric employees; more than 500 wool growers; and a 
substantial number of the more than 10,500 employees in man-
made fibers, whose products are routinely combined with wool to 
produce wool blend fabrics.
    Under the World Trade Organization, U.S. wool fabric 
tariffs are currently in the process of being reduced by 30 per 
cent and import quotas are being eliminated. Additional wool 
fabric tariff reductions and eliminations at this time will 
give an additional and dramatic price advantage to imports, 
causing a further market shift toward imports and away from 
U.S. products.
    This shift would come on the heels of a one-third decrease 
in U.S. wool yarn and fabric employment during the past three 
years--a total loss of at least 6,300 jobs. The record levels 
of imports have resulted in wool yarn and fabric plant closings 
and permanent layoffs of 1,600 domestic employees in 1998 and 
an additional 1,600 employees during the first two months of 
1999.
    Overall, the passage of this legislation will negatively 
impact the nearly 90,000 employees in the U.S. wool fiber, top, 
yarn, and fabric industry.
    Following negotiations leading to the North American Free 
Trade Agreement and the World Trade Organization, U.S. wool 
fabric producers made hundreds of millions of dollars in 
investments in production, relying on the integrity of U.S. 
trade laws, tariff schedules, NAFTA, and the WTO in making 
these decisions. To unilaterally alter these tariffs now would 
undermine the integrity of earlier trade negotiations by the 
government.
    In addition, since a new round of World Trade Organization 
trade liberalization talks begin in six months in Seattle, 
Washington, it would be inappropriate for the Congress to 
reduce or eliminate any tariffs outside of the WTO negotiating 
context at this time. To do so would undermine the U.S. 
negotiating position.
    The fabric types covered by this legislation are readily 
available from U.S. producers, who have the capacity to produce 
a volume more than sufficient to serve the market. Yet, the 
legislation proposes to reduce or eliminate tariffs on a volume 
which is almost double the size of the entire market for these 
fabrics. This makes no economic sense.
    Nor is it wise to unilaterally reduce or eliminate tariffs 
in the midst of an import crisis. The U.S. trade deficit in 
1998 was a record $168 billion; the textile and apparel trade 
deficit was $49.2 billion. In 1999, textile and apparel imports 
have increased 13 per cent over 1998 levels.
    The loss of domestic textile and apparel jobs and market 
share has been dramatic. In North Carolina alone, according to 
the Employment Security Commission, the state lost 8,241 
textile and apparel jobs in 1998 and 10,513 through August 
1999.
    There are two additional problems with this legislation. 
First, it is virtually unenforceable. U.S. Customs has 
inadequate resources to police the full range of textile and 
apparel imports, although the agency does its best with the 
resources it has. Because the legislation's classification 
descriptions are vague, importers can avoid tariffs by falsely 
declaring the quality level of wool fabrics. In addition, the 
legislation does not correct Canada's continuing misuse of a 
NAFTA loophole which allows that country to make wool fabric 
with non-NAFTA fabric and flood the U.S. market under NAFTA's 
zero tariff rate.
    In conclusion, there are a number of compelling reasons to 
oppose this potentially very harmful legislation. It would 
further impact U.S. textile and apparel jobs and market share 
in an industry which is already being damaged by low-cost 
imports, many of them illegal.
      

                                


                           Northern Textile Association    
                                           Boston, MA 02110
                                                  September 2, 1999

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

    Dear Mr. Singleton:

    On behalf of the Northern Textile Association (NTA), I am writing 
to express strong opposition to H.R. 1360, legislation designed to 
severely reduce and in some cases eliminate totally, existing U.S. 
duties on certain grades of wool fabric. The NTA represents over 80% of 
domestic wool fabric and yarn producers, many of which manufacture 
products that would be directly affected by this legislation.
    Our reasons for objecting to H.R. 1360 are manifold, including the 
following points:
    1. All of the fabrics covered by this bill are manufactured in the 
U.S. in large quantities. The companies that produce these fabrics 
employ thousands of U.S. workers whose jobs will be jeopardized by the 
severe tariff cuts envisioned in this legislation. In addition, the 
U.S. wool fabric industry is extremely depressed at this time. Several 
domestic wool fabric producers have been forced to cut production and 
staffing in response to the flood of low-priced goods flowing out from 
the depressed economies of East Asia. We have witnessed wool fabric 
industry layoffs and plant closings in Rhode Island, New Hampshire, 
Maine, Georgia, South Carolina, North Carolina, Virginia, and Oregon. A 
decision by Congress to cut existing U.S. duty rates will only 
exacerbate the poor market conditions that have led to the lay-off of 
thousands of wool fabric workers over the past eighteen months.
    2. The U.S. is currently reducing the tariff on all wool fabrics by 
nearly one-third as a result of the Uruguay Round agreement. We are in 
5th year of a phase down schedule under the WTO that will drop U.S. 
wool fabric duties from 36.1% to 25% in 2004. Yarn and fabric makers 
have invested millions of dollars in new plants and equipment in recent 
years based on this tariff phase down schedule, negotiated by the 
Executive Branch and approved through implementing legislation by 
Congress. If Congress allows further, unforeseen tariff cuts, the 
investment and long range planning activities of various companies will 
be destroyed. Moreover, it would be extremely unwise for Congress to 
make unilateral tariff cuts in this area just three months shy of the 
upcoming Seattle WTO talks. If it is deemed necessary to further reduce 
these duties, it should at least be done through a negotiation where 
U.S. wool fabric producers could possibly obtain reciprocal market 
opening concessions from foreign trading partners.
    3. H.R. 1360 would provide significant incentives for Customs 
fraud. The language in the bill (Super 70's, 80's, 90's etc.) refers to 
vague marketing terms, not precise definitions of measurement. They 
have no correspondence in international terminology or harmonized 
tariff schedules. U.S. Customs simply does not have the personnel or 
expertise to adequately enforce such vague classification.
    Finally, the bill as drafted would cost the U.S. treasury nearly 
$15 million annually in lost tariff revenue, far exceeding the normal 
one-half million-dollar benchmark for miscellaneous tariff corrections 
or suspensions. For all these reasons, we believe it is totally 
inappropriate for the Ways & Means committee to include H.R. 1360 in 
any miscellaneous tariff package. Moreover, we believe that the 
committee should object to moving this flawed legislation in any form 
during the remainder of the 106th Congress.
    Thank you for your attention to our concerns, and if I can provide 
you with any further information on this matter, please do not hesitate 
to contact me.

            Sincerely,
                                              Karl Spilhaus
                                                          President
      

                                


                                 Pendleton Woolen Mills    
                                         Portland, OR 97208
                                                 September 20, 1999

Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
U. S. Houses of Representatives
1102 Longworth House Office Building
Washington, DC 20515

    Dear Mr. Singleton:

    This letter is being sent to record Pendleton Woolen Mills' 
opposition to HR 1360. This bill which eliminates or drastically 
reduces duties on certain wool fabric types will have a negative impact 
on Pendleton and is also bad policy, for the following reasons:
    1. The legislation will be so difficult to enforce that Customs 
cannot be expected to do so. Even if regulations are promulgated which 
define the marketing terms employed by the bill, experience shows that 
fraud will be rampant. Customs will find it very difficult to keep up 
with testing the fiber diameters of garments. This bill is not 
practical.
    2. This bill will negatively impact the domestic industry. 
Pendleton makes many items which are covered by the bill. Increasing 
import penetration into the market will force us to lay off workers and 
source overseas, or cede market share.
    3. A tariff reduction is already under way based on the structure 
of the Uruguay Round. We count on orderly government policy when we 
make business decisions.
    4. Unilateral cuts are poor policy. Normally when tariffs are 
restructured there is quid pro quo from our trading partners. U.S. 
Treasury will lose $15 million per year, with nothing to show except a 
benefit to certain U.S. companies at the expense of other U.S. 
companies.
    I hope that the committee will take these comments into 
consideration regarding HR 1360. I urge the committee to not proceed 
with this unwise and damaging legislation.

            Sincerely,
                                               B. H. Bishop

BHB/le
      

                                


Statement of Producers' Marketing Cooperative Inc., San Angelo, Texas

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to bill H.R. 
1360. On behalf of Producers' Marketing Cooperative Inc. (PMCI) 
and our 500 wool producer member owners, we oppose H.R. 1360, 
which would cut or eliminate tariffs on selected wool fabrics.
    This legislation will negatively impact all the wool our 
members produce and market in PMCI. The reasoning for this 
legislation is due to the loophole in the NAFTA agreement, 
which allows Canadian exporters of men and boys wool suits--
made of foreign fabrics-to flood the U.S. market with product, 
which does not meet the rules of origin or true intent of the 
NAFTA agreement. Because this loophole has not been corrected 
it has created problems with the garment manufacturers here in 
the U.S. Now we are going to try and make two wrongs into a 
right. These fabrics are available here in the U.S. and our 
sheep growers produce the wool that is used to manufacturer the 
same type fabrics. If this legislation goes forward, it will 
cause further erosion of domestic wool processors and wool 
fabric producers, which purchase our wool. This legislative 
effort will not help any wool industry segment, including 
domestic garment manufacturers, in the long term. If you are 
serious about correcting trade issues, then correct the TPL 
loophole involving Canadian shipment of non-NAFTA fabrics in 
garments into the U.S. market.
    The net effect, of this proposed tariff reduction, to our 
growers will be reduced competitive markets, reduced wool 
value, reduced income, and reduced production. Prices today are 
well below production cost to grow wool. We hope this is a 
short-term market situation, but we do not need a congressional 
trade concession that could make it permanent. The economic 
viability of many central and west Texas communities are at 
stake as well as rural communities throughout the U.S.
    Tariff cuts will help other countries at the expense of 
U.S. workers and producers. Korea, Australia, and African 
countries are implementing actions to strengthen their textile 
industries. Korea has set aside $US 4.9 BILLION to strengthen 
textile manufacturing. The Australian government has allocated 
$US 470.77 MILLION in a package to assist the country's ailing 
textile, clothing, and footwear (TCF) industries. A $US 8 
million is aimed at helping Australian TCF firms increase their 
export capabilities. Last year the Australian government 
announced a five-year tariff freeze that would not allow 
tariffs to be reduced further. Free trade and fair trade are 
two separate issues since these countries and others have 
government supported plans that subsidize wool and wool fabric.
    Our domestic WOOL processors and fabric manufacturers have 
given in to the largest tariff reduction and quota elimination 
in the Uruguay Round of GATT under the WTO. Add the impact of 
the Tariff Preference Level abuse by Canadian companies using 
foreign wool fabric under NAFTA and we have a real mess. In 
addition, during the GATT negotiations the U.S. sheep producers 
were left out of a fiber forward provision, which has added to 
the reduction in sheep producers by allowing wool exporting 
countries access to our market without providing potential 
exports of our wool product. All these events have financially 
hurt domestic wool processors with more going out of business 
each year. Now this legislation proposed will undermine the 
integrity of the U.S. government to honor agreements with our 
own citizens.
    In 1998, more than half the wool in Texas could not be 
sold. Not because our growers are strong and greedy, but 
because there was no market domestically. Producers' Marketing 
Cooperative is actively involved in moving our growers into 
value added processes for their wool through strategic 
alliances with domestic processors. If we loose domestic wool 
processing, yarn and fabric making to foreign countries and 
companies where will our growers be able to pursue value added 
opportunities? This legislation will put more domestic wool 
processors and fabric makers out of business and therefore 
hinder our ability to create markets for our member's wool 
through value-added processes. We are on schedule with our 
marketing activities based on the scheduled GATT tariff 
reduction levels. We can not afford to have the rules changed 
when we are in midstream.
    The legislation is ambiguous in the language, which makes 
it impossible to enforce. While the terms may have meaning in 
greasy wool and wool top they do not have any standard meaning 
beyond these stages of processing. In addition, the U.S. has 
the only official standards for spinning counts in the world. 
Any foreign company can use these terms without having to meet 
any standard from within their own country. Therefore, U.S. 
customs will have to check virtually all shipments to prevent 
misuse of this legislation's intent. To check fabric content 
will require costly and tedious test under laboratory 
conditions, not simply looking at the label.
    In the long term we face loosing a viable U.S. wool 
industry from wool producer through wool fabric manufacturer if 
this or similar legislation is approved. Given a fair chance we 
have the potential to produce and manufacture goods, which can 
meet domestic consumer needs and help balance the trade deficit 
the U.S. is burdened with currently. If we are not provided a 
fair market access we will loose an industry which will be more 
expensive to retool and cost the U.S. consumer and U.S. 
economy.
    To enact H.R. 1360 would be devastating to our wool growers 
and succeeding segments of the wool industry. Thank you for 
allowing Producers' Marketing Cooperative to make comment 
regarding this proposed legislation.
      

                                


Statement of James E. Elliott, R. C. Elliott & Co., Salt Lake City, 
Utah

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to bill 
H.R.1360.
    R. C. Elliott & Co., a wool buying and marketing company 
since 1920, representing most of the western states wool 
growers, is opposing H.R. 1360, The Wool Fabric Tariff Cut/
Elimination Legislation.
    All of us in the domestic wool industry. eg. wool growers 
and wool fabric manufacturers are already being harmed by the 
flood of imports of foreign cloth to the U. S. market. Our 
customers are being hurt. Their business is down to 10% of its 
normal usage. Wellman Industries, a wool top producer will be 
closed in six weeks, Worcester Co., a wool fabric producer has 
closed, Forstmann & Co., a woolen and worsted fabric producer 
is in Chapter 13, Roddie Wool Scouring of Brady, Texas, the 
largest commercial wool scouring facility in the U. S. is 
basically shut down for lack of business, and Pendleton Woolen 
Mills closed its scouring plant. This has left the American 
Wool fiber producers with a very limited market.
    It is my firm belief that with NAFTA and H.R. 1360 the 
Sheep Producing and Wool Textile Producing industry of the U.S. 
will end. This would affect jobs all across the U. S., hundreds 
of thousands of them.
      

                                


Statement of South Carolina Manufacturers Alliance, Columbia, South 
Carolina

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to bill H.R. 
1360. It is clear to us that there is potential harm for almost 
90,000 U.S. workers in the wool fiber, top, yarn, and fabric 
industry. Record levels of imports have already resulted in 
U.S. wool yarn and fabric plant closings and job losses of over 
six thousand during the last three years. A new round of W.T.O. 
trade liberalization talks will begin in Seattle in just six 
months. To substantially cut any U.S. tariff now outside of the 
W.T.O. negotiating arena seems to be very premature and will 
definitely weaken our position in Seattle. Additionally, 
Congress absolutely should not make unilateral tariff cuts in 
the midst of what is clearly an import crisis. The 1998 U.S. 
trade deficit was a record $168 billion with textiles/apparel 
comprising $49.2 billion of that deficit. In 1999, textile/
apparel imports have grown 13% over the same period in 1998. 
Job and business loss continues to be severe. Slashing tariffs 
on wool fabrics would give an additional dramatic price 
advantage to imports, thus causing additional market shifts 
toward imports and away from U.S. producers. The fabric types 
covered by H.R. 1360 are readily available from U.S. producers.
    Finally, under the W.T.O., U.S. wool fabric tariffs are 
currently in the process of being reduced by 30%, and import 
quotas are being eliminated. Further, unilateral tariff cuts 
will be devastating to the U.S. wool textile industry and is 
clearly not in the best interest of workers, manufacturers, and 
wool growers.
    H.R. 1360 represents bad policy and should be rejected.
    We appreciate your consideration of our perspective on this 
important issue.
      

                                


Statement of Tailored Clothing Association

    On behalf of the Tailored Clothing Association (TCA), I am 
responding to your request for written comments for the record 
from parties interested in various trade proposals. TCA 
represents the American manufacturers and suppliers of men's 
suits, sports jackets, and tailored pants. The TCA strongly 
urges the Subcommittee to act favorably on H.R. 1360, a bill to 
reduce the tariffs on certain high-end wool fabric used in 
men's suiting.
    Our industry has seen the loss of tens of thousands of jobs 
and the disappearance of major named brands as a result of a 
trade policy that imposes a ``Made in America'' tax on every 
suit made in the United States. Since NAFTA, we have 
experienced a 40% reduction in production and a 50% loss in 
jobs. Unless Congress corrects the unlevel playing field our 
government has created the industry will continue to disappear.
    H.R. 1360 was introduced by Congressman James Walsh and is 
currently cosponsored by Representatives Amo Houghton, Louise 
Slaughter, Harold Rogers, Sherwood Boehlert, Michael Forbes, 
John LaFalce, Jack Quinn, David Hobson, Rod Blagojevich, Bart 
Gordon, and Nick Rahall, II.
    Identical legislation, S. 218, has been introduced in the 
Senate by Senator Daniel Patrick Moynihan. Cosponsors of S. 218 
include Senators Charles Schumer, Richard Durbin, Chuck Hagel, 
Barbara Mikulski, Arlen Specter, Don Nickles, Peter Fitzgerald, 
Rick Santorum, Phil Gramm, and Fred Thompson.
    The legislation provides a temporary duty suspension on 
high-end grades of fabric, known in the industry as Super 90s 
and higher grades, for use in suiting and reduces the duty on 
Super 70s and 80s grade fabric to the prevailing tariff rate on 
finished wool suits.
    In 1998, the legislation was favorably reported out of the 
Senate Finance Committee as part of a larger trade package. The 
Ways & Means Committee has yet to act on the legislation. 

                           Current Trade Law 

    Currently our tariff schedule imposes one of the highest 
duties in this country on imported wool fabric--30.6%. While 
there may have been a time that this duty was intended to 
protect a domestic textile industry--the American textile 
industry no longer serves this market niche.
    Our current tariff schedule also contains a tariff 
inversion--while we pay 30.6% on high-end wool fabric, we pay 
only 19.8% on an imported finished wool suit. It is less 
expensive to import a finished suit than the raw wool fabric 
needed to make the suit here in the USA.
    Finally, to add insult to injury, our government negotiated 
away special concessions to Canada in NAFTA. Under NAFTA, 
Canada is granted the right to purchase the same Italian wool 
fabric duty-free, make the suit in Canada, and import the suit 
duty-free to the United States despite the 100% foreign 
components. How much does Canada pay in duties on the fabric 
they import? Zero. The result: NAFTA created a new Canadian 
export industry--high-end men's suits. With virtually no 
Canadian exports before NAFTA, Canada exported $140 million of 
suits to the U.S. in 1998--over 1 million suits annually. The 
Canadian trade negotiator has publicly bragged about these 
trade concessions, stating in Wrestling with the Elephant, 
``The (Canadian) government agreed to cut the tariffs on 
imported materials. Meanwhile, the manufacturers of woolen 
suits were laughing all the way to the bank.''
    These three trade policies--the high tariff rate, the 
inverted duty structure, and the special NAFTA loophole--have 
caused our industry to lose thousands of jobs in Illinois, New 
York, Kentucky, Pennsylvania, Virginia, and many other states. 
Our government's policy has made it harder and harder for our 
companies to continue to operate in this country. 

                U.S. Production of Worsted Wool Fabric 

    U.S. textile companies will not be harmed if H.R. 1360 is 
enacted. The only company that is currently producing high-end 
worsted wool fabrics is Loro Piana, an Italian-owned company 
that imports its yarn from Italy and weaves the fabric in 
Connecticut. Loro Piana cannot supply more than 10% of our 
industry's needs, and companies in our industry have promised 
to continue to purchase its products because of its quality and 
convenience of domestic sourcing.
    Furthermore, Burlington Industries in no longer even 
supplying the lower quality worsted fabrics except in plain, 
simple weaves (i.e., solid colors without texture). Thousands 
of employees have been laid off and numerous plants have been 
closed just this year, as Burlington relocates their 
productions focus to cut-and sew operations in Mexico. Attached 
is a press release describing these closures and a letter from 
Burlington to a TCA company informing them of their decision to 
cease production.
    Burlington is unable to tell the industry when or if it 
will ever return to worsted wool production in the lower 
quality grades. Forstmann, which used to be a worsted wool 
supplier, has just reentered bankruptcy for the second time and 
has publicly disclosed in its SEC filings that it has exited 
the men's suiting fabric business. Attached are the relevant 
pages. Clyne and Tinker of Canada has no domestic mills. With 
the exception of Loro Piana in Connecticut, the U.S. textile 
industry does not produce the worsted wool fabric covered by 
H.R. 1360 and needed to make high-end men's suits.
    Earlier this year, USTR convened a meeting with our 
industry and the textile industry to determine whether there 
was any other U.S. production of worsted wool fabric useable in 
suiting. The meeting resulted in no other company being 
identified as a domestic source. 

                          Raw Wool Producers 

    There has been some confusion regarding the scope of the 
pending legislation.
    H.R. 1360 only impacts high-grade worsted wool fabric used 
in suiting. The raw wool for these fabrics is produced by pure 
blood Merino sheep in Australia. The wool needed to make these 
fabrics require very fine micron diameters (the measure of the 
individual fibers of wool). The U.S. sheep industry does not 
produce this grade of superfine wool fiber. Attached is a 
letter from the U.S. Department of Agriculture confirming this 
fact. 

                              Supporters 

    H.R. 1360 is supported by the Union of Needletrades, 
Industrial and Textile Employees (UNITE), American Apparel 
Manufacturers Association (AAMA), Clothing Manufacturers 
Association (CMA), Tailored Clothing Association (TCA) and the 
National Retail Federation (NRF). Attached is an op-ed and 
editorial supporting the legislation.

                              Conclusion 

    On behalf of an industry that simply wants an opportunity 
to compete on a level playing field, we urge you to act 
favorably on H.R. 1360. Please repeal the ``Made in America'' 
tax and allow the remaining companies in our industry a fair 
chance to compete against our foreign manufacturers.
      

                                


Burlington to Reorganize Apparel Fabrics Business in Comprehensive Plan 
for Future

    Burlington Industries, Inc, (NYSE:BUR) announced today a 
comprehensive reorganization of its apparel fabrics business, 
designed to position the company for long-term success against 
growing worldwide competition. Operations will be streamlined 
and U.S. capacity will be reduced by 25 percent to compensate 
for the continuing surge of low-priced garment imports, 
primarily from Asia. The plan will result in the loss of 
approximately 2,900 jobs and the closing of seven plants. 
    George W. Henderson III, Chairman and Chief Executive 
Officer, said, ``We have been running our apparel fabrics 
operations at less than full capacity over the last 9-12 
months, anticipating that the surge of low-priced garment 
imports from Asia might only be the temporary result of the 
Asian financial crisis. We now believe that this situation is 
more permanent in nature and we must reduce our U.S 
manufacturing capacity accordingly and utilize only our most 
modern facilities to be competitive.''
    Henderson noted that the interior furnishings segment of 
the company, which represented 42 percent of fiscal 1998 sales, 
is not part of the reorganization. The plan affects only the 
apparel products segment. The major elements of the plan are:
     The company will combine two businesses that have 
complementary product lines and serve many of the same 
customers. The merger of the two--Burlington Klopman Fabrics 
and Burlington Tailored Fashions--will create a fast, 
responsive organization with an improved cost structure.
     Burlington Sportswear will become a business unit 
within the Burlington Global Denim division, marketing fine 
cotton slacks and fabrics. The company will close its knitted 
fabrics and shirts business.
     Burlington will reduce US apparel fabrics capacity 
by 23 percent and at the same time reorganize manufacturing 
assets to work together in a fast, modern, versatile and cost-
effective configuration. Seven plants will be closed: 
Mooresville, Forest City, Oxford, Cramerton and Statesville, 
NC; Bishopville, SC; and Hillsville, VA. The plan will result 
in the loss of approximately 2,900 jobs as the result of the 
plant closings, plus elimination of one department in Raeford, 
NC and overhead reductions throughout the company.
     The cost of the reorganization will be reflected 
in a restructuring charge, before taxes, of approximately $80-
90 million in the second fiscal quarter, ending April 3,1999, 
plus other expenses related to the restructuring of 
approximately $25-35 million, before taxes, that will be 
charged to operations over the next six to nine months.
    Henderson said, ``By reducing our overall capacity, 
utilizing only our most modern equipment, and concentrating on 
a value-added product mix, we will be able to run our US 
operations on a much more efficient and cost-effective basis. 
The combination of streamlined and modern US operations, 
together with our new state-of-the-art manufacturing 
facilities, coming on stream later this year in Mexico, will 
position the company well to compete on a global basis.''
    ``We deeply regret the loss of jobs, many of which are held 
by long-term Burlington employees. We recognize that our 
markets face increasingly competitive pressures from a global 
economy, but we find it intolerable to continue to lose US jobs 
to unfair trade. Unfair trade takes many forms, including the 
use of child labor, the illegal transshipment of products to 
circumvent trade laws, the heavy support of foreign industries 
by foreign governments to enable them to dump their products in 
the US market at extremely low prices, and finally the lack of 
environmental regulation in many parts of the world that allows 
foreign manufacturers to pollute the environment without 
bearing the costs of responsible environmental protection 
practices that we willingly follow on the United States. Last 
year, 260,000 US manufacturing jobs were lost, despite a robust 
economy. Some 42 percent of these job losses were in the 
textile and apparel industries. We continue to work closely 
with our elected officials in Washington to find a fair balance 
in world trade-one that recognizes the vital importance of 
manufacturing jobs in the US economy.''
    Burlington Industries, Inc. is one of the world's largest 
and most diversified manufacturers of textile products for 
apparel and interior furnishings.
    This press release contains statements that are forward-
looking statements within the meaning of applicable federal 
securities laws and are based upon the company's current 
expectations and assumptions, which are subject to a number of 
risks and uncertainties that could cause actual results to 
differ materially from those anticipated. Such risks and 
uncertainties include, among other things, global economic 
activity, the success of the company's overall business 
strategy, the company's relationships with its principal 
customers and suppliers, the success of the company's expansion 
in other countries, the demand for textile products, the cost 
and availability of raw materials and labor, the company's 
ability to finance its capital expansion and modernization 
programs, the level of the company's indebtedness and the 
exposure to interest rate fluctuations, governmental 
legislation and regulatory changes, and the long-term 
implications of regional trade blocs and the effect of quota 
phase-out and lowering of tariffs under the GATT trade regime. 
      

                                


                                    Burlington Menswear    
                                         New York, New York
                                                  February 17, 1999

Hartz & Co.
730 5th Avenue
New York, NY

    Keith,

    For our Spring 2000 season we have decided to pull our seasonal 
stock dye lines. It was determined that due to a realignment of our 
manufacturing facilities we would not be able to fulfill our delivery 
obligations for the upcoming season.
    This is not to say that in future seasons we will not offer 
seasonal fancies. After our manufacturing restructure, and following 
further product developments, a decision will be made as to our 
involvement with seasonal stock dyes.
    We apologize for any inconvenience this may cause, and look forward 
to continuing the advancement of our piece dye programs.

            Best regards,
      

                                


      

                                


Forstmann Files for Chapter 11, Cuts 50% of Workforce 

    New York--Forstmann & Co. on Friday filed for Chapter 11-
bankruptcy court protection in Manhattan. The Chapter 11 
petition confirms a report in Friday's DNR that Forstmann would 
file.
    Rodney Peckham, president and chief executive officer, said 
in an affidavit filed with the petition that the company will 
immediately cut over 50 percent of the company's workforce. 
Forstmann has 1100 employees, of which 900 are full-time. A 
source familiar with the bankruptcy said that the cuts will 
affect hourly employees at the company's two adjacent plants in 
Georgia.
    Peckham explained that the company earlier this month 
``exhausted'' its borrowing availability under its credit line. 
The liquidity problem arose from restructuring efforts on the 
past year and costs connected to the 1998 startup of its 
subsidiary, Forstmann Apparel Inc., which also filed for 
Chapter 11 protection.
    He added that Forstmann has been in contact with other 
parties who are interested in buying or merging with the 
company. Butler, Chapman & Co. Inc. is the woolen and worsted 
fabric manufacturer's investment advisor. Sources said the 
company has been in talks with at least two companies for a 
possible sale of the company. It was not immediately known 
whether there were any plans for the subsidiary to be sold 
separately from Forstmann & Co.
    The company, which plans to continue in operation, has a 
$50 million debtor-in-possession financing facility provided by 
a bank group led by Bank of America. It also hired Richard 
Redden, a turnaround consultant at OSNOS Associates Inc., who 
will act as interim chief operating officer.
    Forstmann's Chapter 11 petition listed total liabilities of 
$58.6 million, including $50.5 million in secured debt and $7.2 
million in unsecured debt. The company's top six secured debt 
holders are syndicate members that provided the company with 
its credit line. Unsecured creditors include: Richter Yarns 
Ltd, Ontario, Canada, $600,730; Prouvost USA, Inc., Jamestown, 
S.C., $258,291, and the Kent Manufacturing Co., Pickens, S.C., 
$81,570.
    Forstmann listed total assets of $88.2 million.

From the Daily News Record, July 26, 1999, by Vicki M. Young.
      

                                


                United States Department of Agriculture    
                               Foreign Agricultural Service

The Honorable Thad Cochran
United States Senate
326 Russell Senate Office Building
Washington, DC 20510-2402

    Dear Senator Cochran:

    Thank you for your letter of April 14, 1999, requesting price and 
reporting information concerning 18-19 micron grade wool produced in 
the United States.
    During the last 10 reporting periods the volume of finer wool 
grades (19-19 micron) has been insufficient to warrant price and sales 
reporting. Historically, the minimum sales volume sufficient to justify 
reporting is at least 3 sellers offering a minimum aggregate quantity 
of approximately 500 pounds of wool in the 18-19 micron category during 
a reporting period. (Note that this minimum in effect defines 
``commercial quantity.'') The Agricultural Marketing Service (AMS) has 
never received sales dated for this category of wool that meet these 
minimum reporting requirements.
    Recent AMS field experience concerning finer wool grade is rather 
instructive. During the week of May 3, 1999, AMS market news staff 
visited New Mexico to inspect wool sales. Having seen more than 2 
million pounds of wool offered for sale, the staff reports that no 
finer grades in the 18-19 micron categories were offered for sale. 
These finer wool grades represent less than one-half of one percent 
(.5%) of total U.S wool output.
    With regard to U.S. dependence on Australia for wool, available 
data indicate that Australia is the major supplier of finer wool grades 
to the United States. Consequently, we do not have data by which to 
refute the International Trade Commission's statement, in its Industry 
and Trade Summary on wool and related animal hair, that the United 
States is dependent on Australia for those grades.
    Please be assured that the Department of Agriculture will continue 
to report all sales of wool that are represented in the commercial 
marketplace in economically viable quantities. I hope that this 
information is helpful to you.
    Again, thank you for writing.

            Sincerely,
                                          Timothy J. Galvin
                                                      Administrator
      

                                


Time to Shear a Wool Tariff

     During my long life in the retail business, I always have 
sought to offer customers a choice of fine-quality goods made 
both in the United States and abroad.
    Customers are best served when they can choose from a 
variety of competing brands and labels. This principle is the 
reason the National Retail Federation, the largest trade 
association representing retailers throughout the United 
States, supports an effort in Congress to cut a crippling 
tariff on materials used for making high-quality men's suits.
    Not for the first time, a protectionist trade policy is 
having the counterintuitive result of closing U.S. 
manufacturing plants and killing American jobs.
    U.S. manufacturers of high end men's suits and formal wear 
are hobbled by a huge tariff--more than 31%--on the fabrics 
they must use.
    Most manufacturers of high-end suits use very fine woolens, 
particularly those made in Italy and England. Such fabrics are 
not produced in the United States.
    These fabrics are expensive to begin with. Add the import 
duty to the fabric cost and the numbers jump quickly. For 
American consumers, the tariff translates into an increase of 
$60 to $200 per suit.
    It's no surprise, then, that U.S. garment-makers have 
largely abandoned the high-end suit market, leaving it to other 
countries.
    Canada has been a big winner. Canada cut its tariffs on 
European woolens, while the United States kept its tariffs 
high.
    Through North American Free Trade Agreement, Canadian-made 
suits are exempt from import duties in America, lowering their 
price relative to American-made suits.
    The predictable result: While American production of men's 
wool suits and formal wear has fallen about 40% in the last 
decade, Canada's exports of quality men's suits to the United 
States have surged from nearly zero to approximately 1.5 
million annually.
    Meanwhile, employment in the U.S. tailored-clothing 
industries has fallen during the past decade from 58,000 to 
30,000. And the government predicts another 10,000 jobs will be 
lost by 2006.
    The American wool industry, which the tariff is supposed to 
protect, never has been threatened by the deluxe imports, 
because the type of wool used to make these fine fabrics is not 
produced in the United States.
    Thus the net result of this protectionist effort has been 
to drive apparel manufacturers out of the United States, 
leaving American woolgrowers with a smaller pool of domestic 
clients.
    Like so many protectionist efforts, this one has fallen 
prey to the law of unintended consequences.
    It is no wonder that Unite, the Union of Needletraders, 
Industrial and Textile Employees, has joined U.S retailers and 
manufacturers in seeking to eliminate the self-defeating U.S. 
wool tariff.
    The National Retail Federation wants Americans to be able 
to buy fine suits at great values whether they are made in 
Canada, the United States or elsewhere.
    Congress now has an opportunity to preserve that choice for 
American consumers and to give American suit-makers a fair 
chance to keep manufacturing jobs on our side of our northern 
border.
    The pending omnibus trade bill, as approved by the Senate 
Finance Committee, would slash the tariff on high-quality 
woolens.
    Shearing the wool tariff would help keep jobs in the United 
States and help lower prices for American consumers. That suits 
American retailers just fine.

From the Journal of Commerce, September 17, 1999. By Stanley 
Marcus, Chairman emeritus of Neiman Marcus. This article was 
distributed by Bridge News.
      

                                


Is This How Tariffs Should Work?

    Protectionists share a faith that says tariffs protect 
American workers. If they would only look at the U.S suit-
making business, they could see the ruinous effects of this 
line of thinking.
     In the last decade, the domestic tailored-clothing 
industry lost nearly half of its jobs--from 58,000 to 30,000. 
If U.S. trade policy isn't changed, it will lose another 10,000 
by 2006. In March alone 200 Americans lost jobs in the industry 
when Hartmarx Corporation was forced to close its Knoxville, 
Tennessee suit-making plant.
     At the same time, Canadian suit makers have prospered. 
They sell their suits here for $200 less than domestic-made 
suits of identical quality. Since 1991, they've increased their 
no-tariff exports to the U.S by more than 250%.
     The cause of all this woe? Canada has had the good sense 
to drop a stiff tariff on imported fine wool fabrics that the 
U.S. continues to levy.
     Worse yet, while American suit-makers are whacked by a 
duty on fine-wool fabrics that exceeds 31%, foreign-made suits, 
cut from those same high-end fabrics made primarily in Italy 
and England are subject to only a 19.8% tariff.
     Even populist Republican presidential candidate Pat 
Buchanan and Rep. Richard Gephardt, D-Mo., both faithful 
protectionists, would have to admit something is wrong.
     After 10 years of decline, someone in power has finally 
noticed that the tariff is wrecking the industry. A group of 
Republicans and Democrats in the House and three Democrats in 
the Senate have introduced bills that will reduce the tariff.
     The lawmakers have the support of the Union of 
Needletrades, Industrial and Textile Employees, suit makers and 
retailers. Except for the Canadian suit-makers who've so 
generously benefited from shortsighted U.S trade policy, it's 
hard to find anyone who'll support the tariff. Given this broad 
opposition, it seems that a reduction in the tariff is certain.
     Yet the power behind such a collection of interests by no 
means ensures a reduction--or better yet, an elimination--of 
the tariff. There's been talk of retaliation. Instead of 
dropping the tariff, the government would hike the duty on the 
more than 5 million European-made suits bought in the U.S each 
year.
     That, of course, would be self-defeating. No one wins a 
trade war. They only make matters worse. When a country fires's 
shot (a tariff created or increased), the targeted country 
responds in kind. The one-upmanship continues until markets are 
closed or are so severely restricted that they're effectively 
closed.
     The lessons are out there. Canada cut its tariff and its 
suit-makers prospered. America can do the same. There's no 
reason why the suit making industry should suffer a handicap 
imposed by flawed policy. What a concept: Free up trade, 
protect domestic industries.

From Investor's Business Daily Editorial Page, Thursday, April 
1, 1999.
      

                                


[GRAPHIC] [TIFF OMITTED] T0253.001

      

                                


Statement of UNITE, the Union of Needletrades, Industrial and Textile 
Employees

    On behalf of UNITE, the Union of Needletrades, Industrial 
and Textile Employees, I am responding to your request for 
written comments for the record from parties interested in 
various trade proposals. UNITE represents 200,000 workers 
employed in the U.S. in the apparel, textile and other light 
manufacturing industries. UNITE strongly urges the Subcommittee 
to act favorably on H.R. 1360, a bill to reduce the tariffs on 
certain high-end wool fabric used in men's and boys' suits.
    This matter is of extreme importance to UNITE and our 
members, because it affects the future of suit manufacturing in 
the United States and the possible loss of more than 30,000 of 
the best jobs in apparel manufacturing. The problem that H.R. 
1360 will resolve arises from a combination of factors:
    The tariff structure in tailored clothing, known as a 
``tariff inversion,'' directly encourages the production of 
suits offshore. The tariff on wool for suits is 30.6%, while 
the tariff on finished suits is 19.8%. A manufacturer or 
retailer who must import wool to make suits here pays half 
again as much in duty as a manufacturer who makes the identical 
suit offshore and imports the finished suit. This is an anomaly 
in tariff law.
    Canada imposes no tariff on imports of fine wool for suits. 
Under a provision of the Canada-U.S. Trade Agreement, that was 
retained in NAFTA, Canadian companies can make suits using the 
identical imported wool on which U.S. companies pay a 30.6% 
duty and export those suits to the U.S. duty-free. The result 
has been an increase of Canadian exports of men's and boys' 
suits to the U.S. from about 100,000 in 1991 to 1.5 million 
suits in 1998. The 30.6% duty translates into a $60 to $200 per 
suit hidden tax on American consumers.
    Since 1991, more than 73 plants making men's tailored 
clothing in the U.S. have shut down, putting 12,656 UNITE 
members and thousands of non-union employees out of work. 
Domestic production of men's and boys' suits alone has 
decreased from 7.64 million units in 1990 to 3.96 million units 
in 1995. The remaining U.S. plants--in Illinois, New York, 
Kentucky, Pennsylvania, Virginia and other states--and their 
30,000 workers are at risk. The tariff affects better women's 
suit manufacturers in the same way and has resulted in loss of 
jobs in those companies as well.
    UNITE has worked closely with the Tailored Clothing 
Association and others affected by the inversion to craft a 
solution that will solve our problem without creating other 
problems. We believe that the bill offered in both Houses of 
Congress with bipartisan support (H.R. 1360 and S. 218) meets 
the test. The bill contains essentially the same language as 
was adopted by the Senate Finance Committee in 1998 as part of 
S. 2400.
    The bill eliminates the tariff on the finest wool fabrics 
used in men's suits (known in the industry as Super 90s and 
above), and lowers the tariff on the next higher grades (Super 
70s and 80s) to the tariff level applicable to finished suits. 
There is no U.S. producer of the fabrics in question who will 
be adversely affected by the change we are proposing. Suit 
manufacturers having collective bargaining agreements with 
UNITE buy a substantial percentage of the current limited 
domestic production, and are committed to continuing the same 
level of domestic purchases even if the tariffs are reduced as 
we propose.
    If the tariffs are not corrected and U.S. suit 
manufacturers continue to go out of business or move offshore, 
those few companies that manufacture the wool in question in 
the United States will have no domestic customers and will be 
forced out of business as well.
    The textile industry, led by Burlington Industries, has put 
up a tough fight to prevent any cuts in tariffs, arguing that 
cuts will harm the domestic textile industry. Burlington 
appears, however, to be protecting its $300 million investment 
in new plants in Mexico, rather than its factories or workers 
in the U.S. On January 26, 1999, Burlington announced that it 
was closing seven apparel fabric plants in North and South 
Carolina and Virginia, and laying off 2,900 workers in the 
U.S., more than a 15 percent reduction in force. The Mexican 
plants will be used by the company to supply the U.S. market.
    Regardless of the merits of any particular case, the 
textile industry takes a hard-line position against any 
reduction in tariffs, contending that any change represents a 
foot in the door to reducing other tariffs. We see no reason 
that the change we seek, which eliminates a unique tariff 
inversion and causes no harm to domestic producers, represents 
a precedent for reductions in normal tariffs that do affect 
domestic industries. We believe the Subcommittee, Committee and 
the House will continue to police carefully all changes in 
tariff schedules.
      

                                


Statement of Utah Wool Marketing Association

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to bill H.R. 
1360.
    Utah Wool Marketing Association is a consigning/purchasing 
warehouse for raw wool throughout the West. As imports continue 
to increase, wool sales are declining. We have also experienced 
mill closings that have, and will continue to devastate the 
Wool Industry. This, due to increased imports of wool products.
    I strongly urge you not to support the H.R.1360 Bill as it will 
decrease the amount of Wool/Sheep Producers and jobs in this country.

            Sincerely,
                                           Will Hart Griggs
                                    Utah Wool Marketing Association
      

                                


                                     Warren Corporation    
                                 Stafford Springs, CT 06076
                                               September 15th, 1999

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

    Dear Mr. Singleton:

    I am writing on behalf of all the employees at Warren Corporation 
to express our strong opposition to H.R. 1360, legislation that would 
eliminate outright the existing duties on fine grade wool fabrics 
(super 90s and finer). Our company is a specialized producer of fine 
wool fabrics would be directly affected by this legislation.
    Our reasons for opposing HR 1360 include the following:
    Our company is a textile manufacturer, located in Stafford Springs, 
CT and New York, NY that has been in operation since the 1850's. Over 
the past 10 years, we have specialized in the production of fine woolen 
and worsted natural fabrics. We currently produce over 1.2 million 
yards of fine wool fabrics (super 90s and finer), and have a production 
capacity of over 2 million yards. We employ over 300 people in 
Connecticut and New York whose jobs would be in serious jeopardy should 
the tariffs suddenly be eliminated.
    Since 1988, we have committed $40 million in modern, state of the 
art equipment, renovations, expansions, and personnel training. In the 
past three years alone, we invested $14 million in one of the most 
modern weaving facilities in the country.
    These investment decisions were made on the assumption that the 
tariff structures established under the WTO and NAFTA would hold. As it 
stands now, the Uruguay round incorporates a progressive 35% reduction 
in tariffs for wool fabrics. Eliminating these tariffs outright would 
throw a devastating blow to the investments just made, and would equate 
to a very unwise unilateral concession right before the upcoming WTO 
talks in Seattle.
    HR 1360 is based on the retailing industry's terminology described 
as super 70s, 80s etc. There currently does not exist an agreed upon 
definition for these terms, nor does the terminology correspond to the 
harmonized tariff schedules. In addition, Customs does not have the 
resources or the technical expertise to enforce such vague 
distinctions. Thus the bill would provide significant incentives for 
Customs fraud.
    In summary, we are strongly opposed to this bill, and feel that it 
is inappropriate for the Ways and Means committee to include H.R. 1360 
in any tariff package. We believe that any modification to the tariff 
structure should be initiated through the Seattle Round negotiations, 
and should not differentiate between segments, but rather be adopted 
evenly across the whole industry.

            Sincerely yours,
                                             Roberto Modica
                                                   VP of Operations
      

                                


Statement of West Texas Wool & Mohair Association, Mertzon, Texas

    MR. CHAIRMAN: I appreciate the opportunity to comment to 
the Trade subcommittee regarding our opposition to bill H. R. 
1360.
    Below are some very important reasons we oppose H. R. 1360.
    1. West Texas produces a quality grade of wool that is in 
need of protection. Even though we have the tariff in place, 
the imports are still underselling our product because of 
production costs and the strength of the U.S. dollar verses the 
Asian countries' currency. Because of the flood of foreign 
products, our company was unable to sell our raw wool at 
production cost or above for 1998 and 1999. The outlook for 
year 2,000 is even worse. Our producer customers are being 
forced to go out of business.
    2. I am asking you to address the serious problem of the 
NAFTA loophole allowing Canada to make wool apparel with NON 
NAFTA fabric and flood the U.S. under NAFTA's (zero) tariff 
rate.
    3. In the midst of an import crisis, congress should not 
make unilateral tariff cuts. Our country has gained great 
strength due to manufacturing industries. The record deficit is 
greatly impacting job/business loss in the U.S.
    4. Slashing tariffs on wool fabrics will give an additional 
dramatic price advantage to imports--causing further market 
shift toward imports and away from U.S. producers.
    5. The bills will cause serious damage to U.S. woolgrowers 
who export virtually no wool and have U.S. wool top, yarn and 
fabric producers as their sole customers.
    6. Please help the working Americans to continue to have 
factory jobs in America.
      

                                


Statement of Wool Fiber, Yarn, Fabric Coalition

    MR. CHAIRMAN: Our coalition represents nearly 90,000 U.S. 
citizens, who derive their livelihoods as growers of wool 
fiber, or producers of wool top, yarn and fabrics. We 
appreciate the opportunity to comment to the Trade Subcommittee 
regarding H.R.1360. We are united in adamant opposition to this 
bill for the various reasons detailed below.
    Due to U.S. concessions under the Uruguay Round/WTO, U.S. 
wool fabric tariffs are already being reduced 30% and all 
import quotas are being eliminated. Because the agreed-to U.S. 
tariff cuts and quota elimination was so severe, a 10-year 
phase down/out period (starting in 1995) was adopted. The 
industry also was given the clear understanding that future, 
additional tariff cuts would not be faced. Further tariff cuts 
that are mandated by H.R. 1360, will violate commitments made 
in conjunction with the Uruguay Round/WTO.
    It is blatantly unfair to now propose additional, 
immediate, unilateral tariff cuts---cuts that will destroy the 
hundreds of millions of dollars in investments made by U.S. 
wool fabric manufacturers in state-of-the-art machinery and 
equipment. Millions more were spent on training employees in 
these sophisticated manufacturing processes. Many of these 
investments were specifically designed to expand capacity for 
production of the fabrics covered by H.R.1360. The success of 
these expensive investments is dependent upon the integrity of 
existing trade laws, tariffs, the NAFTA, and the WTO. Changing 
these important wool fabric tariffs now would simultaneously 
undermine new investments and jeopardize the viability of 
existing operations
    Furthermore, it is wrong to cut or eliminate U.S. tariffs 
in the midst of an import crisis. The 1998 total U.S. trade 
deficit was a record $168 billion. The textile/apparel trade 
deficit was a huge $49.2 billion in 1998. In volume terms, 
textile/apparel imports jumped 13.3% on top of a 20.1% increase 
in 1997 reports the Commerce Dept., saying this marks ``the 
first time since 1983 & 1984 when imports rose at double-digit 
levels 2 years in a row.'' For the period Jan-June 1999, 
textile & apparel imports are up 7.9% over the same period in 
1998.
    The highly import-sensitive U.S. wool fabric industry, 
already under siege from Eastern European, Asian and Latin 
American wool product imports, has been hard hit by the Asian 
financial crisis and resulting flood of Asian imports. U.S. 
wool fiber, wool top, wool yarn & fabric job and business loss 
is widespread. In January and February of 1999 alone:
    In New Hampshire, Homestead Woolen Mills announced its 
closure.
    Burlington Industries, Inc. announced a 25% cut in apparel 
fabric capacity, termination of its knitted fabric and shirts 
business altogether, and closure of 7 plants and 1 department--
for a loss of 2,900 jobs in N. & S. Carolina, Virginia & New 
York (15% of Burlington's U.S. workforce). 1,395 of these jobs 
were in wool yarn and fabric production. Burlington reported 
that these actions were taken ``to compensate for the 
continuing surge of low-priced garment imports, primarily from 
Asia.'' For the quarter ended 1/2/99, net income was down 39.7% 
and net sales were down 15.5%.
    In Maine, Carlton Woolen Mills downsized.
    Wool fabric producer Forstmann & Co. closed its Louisville, 
Georgia plant, laying off 200 employees, announced a net loss 
of $19.0 million for FY '98,--on top of a $7.0 million net loss 
the prior year, and a sales decrease of 24.8%. Forstmann's 
President stated ``Our financial difficulties are driven by the 
erosion in sales which has been compounded by a surge in 
imports.''
    Wellman Inc., polyester fiber & wool top producer, reported 
a net loss of $23.1 million for 4th quarter 1998, and a 27.3% 
decrease in sales, citing high levels of Asian imports as a 
major problem. Wool top production was reduced from a 7 to 5 
day-a-week operation
    American Sheep Industry-In February 1999, the U.S. 
International Trade Commission unanimously ruled that lamb meat 
imports are threatening serious harm to U.S. sheep producers; 
these imports have already taken over 1/3 of the U.S. market. 
As for the wool fiber side of their business, sales were 
significantly down. Wool textile imports have increased to a 
point where U.S. wool textile producers have cut back on their 
wool fiber purchases. Wool fabric tariff cuts will leave U.S. 
woolgrowers with an even more greatly reduced customer base for 
their wool. U.S. wool product manufacturers are the customers 
of U.S. woolgrowers; virtually no wool is exported.
    DuPont, producer of man-made fibers, (fibers that are 
commonly blended into wool and other fabrics) reported a 25.8% 
drop in earnings for the 4th quarter of 1998, blaming high 
imports of garments from Asia and a serious problem with Asian 
imports of filament fiber at very low prices.
    In addition, during 1998, more than 1,600 wool yarn and 
fabric workers lost their jobs. Among them:
    In Maine, Carlton Woolen Mills, Cascade Woolen Mill, 
Eastland Woolen Mill, and wool yarn spinner Guilford of Maine, 
all closed plants. And International Woolen Co., Inc. and wool 
yarn spinner Jagger Brothers made workforce reductions.
    In Massachusetts, woolen and worsted apparel fabrics 
producer Anglo Fabric, and wool felt producer The Felters 
Company, both closed plants. And wool yarn dyer Crowne Yarn Dye 
Co., Inc. and wool yarn dyer, Dyecraftsmen, Inc both made 
workforce reductions.
    In New Hampshire, Dorr Woolen Company closed a plant. And 
woolen spinner and weaver L. W. Packard & Co. is severely 
downsizing.
    In Pennsylvania, Woolrich, Inc made workforce reductions.
    In Rhode Island, Woodhall Weaving Mills, Inc. closed a 
plant. Rochambeau woolen mill downsized 3 times in 18 months. 
And wool yarn spinner Desmon Mills Inc. made workforce 
reductions.
    Plant closures and job & business losses suffered during 
January and February did not stop there--the damage to our 
industry is continuing. For example, during July and August 
1999:
     Forstmann & Co. filed for Chapter 11 bankruptcy 
court protection and announced it will cut over 50% of its 
workforce, equating to over 550 jobs.
     Wellman, Inc. announced it is closing its wool top 
operation after 70 years in the business.
     Worcester Co., in operation for 60 years, 
announced they will shut down their woolen mill, leaving 390 
people without jobs.
     The American Sheep Industry reported ``U.S. wool 
sales are disastrous, with unsold wool clip from both 1998 and 
1999.''
    Within the last 3 years there has been over a 1/3 decrease 
in employment in the U.S. wool yarn and fabric industry. All 
the while, foreign competitors are enjoying financial backing 
from their governments. The following are 2 examples of the 
fact that U.S. producers must compete with foreign government-
subsidized imports.
    The Australian Government announced it is ``pumping A$772 
million into renewed support for the country's textile, 
clothing and footwear industries.'' ``... so as to become more 
globally competitive'' ... ``package aimed at encouraging 
additional investment in the wool, cotton, leather and fashion 
industries.'' And the Australian government announced a 5-year 
tariff freeze, prohibiting further tariff reductions. (This is 
just the opposite action that H.R.1360 would direct for our 
country.)
    On 6/26/98 the Wool Record Weekly reported that in Korea, 
``President Kim Dae-jung has pledged to provide South Korea's 
textile industry with grants worth 6,800 billion won (U.S. $4.9 
billion).''
    In 1998, fine worsted wool fabrics were entering this 
country at least 20% below the previous year's prices. Even 
with the duty, this was a great bargain for the apparel 
industry. Last year the price of imported Korean worsted wool 
fabric dropped from $10 to $8 a yard--a major decrease in 
price. Imported Korean worsted wool fabrics and other Asian 
imports have made it very difficult for U.S. wool fabric 
producers to compete.
    Foreign producers benefit from the ability to pay extremely 
low wages, few to no benefits, and the fact that most are not 
required to--and do not--spend the added millions that U.S. 
wool fabric manufacturers must spend in order to be 
environmentally responsible. The high import sensitivity 
combined with the need for large sums of capital investment and 
environmental controls has resulted in a small number of wool 
fabric producers remaining in the U.S.
    The current tariff schedule was designed to acknowledge the 
unusually high levels of investment needed by U.S. woolen and 
worsted wool fabric manufacturers. Raw wool itself is more 
expensive than other fibers, and wool yarn and fabric 
manufacturing is unique in that the procedures and processes 
involved are much more complicated and expensive than in other 
types of fibers. For instance, the processing of cotton or man-
made fibers for suiting fabric may go through 20-25 processes, 
but over 50 processes are required to transform raw wool into 
worsted wool fabric for tailored apparel.
    H.R.1360 is an open invitation for fraud. Language in the 
bill provides tariff cuts of nearly 50% on imported fabrics so-
called ``super 70's and 80's,'' and totally eliminates tariffs 
on so-called ``super 90's and above.'' The terms ``super 70's, 
90's'' etc, are general retail marketing descriptions--NOT 
measurable terms, nor do they correlate to tariff schedules or 
any international or scientific standards. U.S. Customs could 
not possibly enforce the provisions of H.R.1360; fraud will go 
undetected. Exporters & importers could easily, falsely declare 
fabric types to avoid duties.
    Enacting cuts of this kind would set a very damaging, 
impossible-to-reverse, precedent. As a result, any industry or 
importer group that wishes to change the rules and overturn the 
negotiated tariffs on the importation of ANY product, would 
have the precedent to press Congress to take unilateral action 
on their behalf.
    The tariff cuts/eliminations proposed in H.R.1360 far 
exceed the $500 thousand annual revenue loss limit for 
miscellaneous duty suspensions. The revenue loss for H.R. 1360 
will be several millions of dollars annually. Moreover, this 
proposal violates the 2nd criteria for duty suspensions--that 
there be no domestic supply/sources available. THE FACT IS--
there are domestic manufacturers for these products. Domestic 
wool fabric manufacturers are producing over 20 million square 
meters annually of all the fabric types covered by H.R.1360, 
i.e. Super 70's and above. Additional capacity exists. 
Consequently, there is no way that this measure could be 
construed as a non-controversial, miscellaneous duty 
suspension.
    It is important to note that wool textile companies in 
Canada and Mexico are also currently producing significant 
volumes of the fabrics covered by H.R.1360. NAFTA fabrics of 
the types covered by this proposal are available to U.S. 
apparel manufacturers at the preferential zero duty rate.
     THE REAL PROBLEM THAT SHOULD BE ADDRESSED:
     Canada's exploitation of NAFTA's wool apparel tariff 
preference level (TPL) is the real problem behind the current, 
damaging request for immediate U.S. wool fabric tariff cuts. It 
is a well-known fact that Canada has intentionally thwarted the 
purpose of the TPL and has violated its verbal agreements at 
the expense of the U.S. wool textile and apparel industry.
    A Tariff Preference Level (TPL) provision in the Canadian 
Free Trade Agreement (CFTA), and continued in the North 
American Free Trade Agreement (NAFTA), allows special trade 
benefits for wool apparel assembled in Canada using non-NAFTA 
fabric. This apparel is being exported to the U.S. under the 
preferential NAFTA (zero) tariff rate, as if the fabric had 
been made in a member country (U.S., Canada, or Mexico)--as is 
the normal rule of origin requirement.
    This provision was included to allow Canada to have access 
to foreign fabric only when those fabrics were not available 
from the NAFTA countries. The Canadian negotiators also assured 
the U.S. negotiators that Canadian apparel makers would not 
harm U.S. wool fabric and apparel manufacturers by 
concentrating their exports to the U.S. in specific product 
areas.
    Canada is using virtually all of its wool apparel TPL, and 
is concentrating approximately 90% of it in wool suits, sport 
coats and slacks. Canada is using non-NAFTA fabric for these 
TPL exports--even though great quantities of these same fabrics 
are produced in the U.S., MEXICO and CANADA (the NAFTA 
Partners).
    The legislative proposal, H.R.1360, does not solve the 
Canadian import problem. It only creates new problems and will 
worsen the import situation for those in the industry which are 
also currently being harmed--i.e. U.S. wool fiber, top, yarn 
and fabric producers.
     The Administration is well aware of the real cause of this 
problem. Rather than slashing tariffs and adding to the burden 
already being carried by U.S. wool fiber, top, yarn and fabric 
producers, the correct approach to the Canadian problem is for 
the Administration to take action through the appropriate 
safeguard mechanism available under the WTO. Up to this point, 
they have not done so. Now is the time.
    In conclusion, enactment of H.R. 1360 will cause even 
greater damage to our industry, by providing a further dramatic 
price advantage to imports, causing more market shift away from 
U.S. products. We urge and hope that H.R.1360 not be included 
as part of a miscellaneous tariff suspension or technical 
corrections package, or allowed to move either independently or 
as part of another legislative package.
    Thank you for the opportunity to comment on behalf of the 
Wool Fiber, Yarn, Fabric Coalition. See below for a partial 
list of Coalition members and others that oppose H.R.1360.
American Fiber Manufacturers Assn.
American Textile Manufacturers Institute
American Sheep Industry Assn., Inc.
American Yarn Spinners Association
Arizona Wool Producers Association
Boston Wool Trade Association
California Wool Growers Association
California Wool Marketing Association
Canadian Co-op Woolgrowers LTD-Ont.
Connecticut Sheep Breeders Assn.
Colorado Wool Growers Association
Georgia Textile Manufacturers Assn.
Idaho Wool Growers Association
Illinois Lamb & Wool Producers, Inc.
Kern County, CA, Woolgrowers Assn.
Maryland Sheep Breeders Association
Michigan Sheep Breeders Association
Montana Wool Growers Association
Nevada Wool Growers Assn.
Northern Textile Association
Ohio Sheep Improvement Association
Producers Marketing Cooperative--TX
New Mexico Woolgrowers Assn.
Sheep Producers of Hawaii
South Carolina Manufacturers Alliance
South Dakota Sheep Growers Assn.
Tennessee Sheep Producers
Texas Sheep & Goat Raisers Assn.
Tri State Wool Marketing Association
U.S. Wool Marketing Association
Utah Wool Growers Association
Washington State Sheep Producers
West Texas Wool and Mohair Assn.
Wyoming Wool Growers Association
Mid-States Wool Growers Cooperative Association--OH
Mid-States Wool Growers Cooperative Association--SD
North American Textile Council--UNITED STATES, MEXICO, CANADA
North Carolina Textile Manufacturers Association Ballinger Wool & 
Mohair Inc.
Amicale Industries, Inc.--NC, PA
Anodyne, Inc.--TX
Blackwell Wool & Mohair Co., Inc.--TX
Burlington Industries, Inc.--AR, MS, NC, NY, SC, TN, VA
Carleton Woolen Mills, Inc.--ME
Center of the Nation Wool, Inc.--SD
Cleyn & Tinker, Inc.--NY
Crescent Woolen Mills--WI
Crown Yarn Dye Company, Inc.--MA
Desmon Mills, Inc.--RI
Dishman International Co., Inc.--TX
Dorr Woolen Company--NH
Dyecraftsmen, Inc.--MA
Easthampton Dye Works, Inc.--MA
Edwin Borgh Wool & Textile Fibers--PA
Eldorado Wool Company, Inc.--TX
Faribault Woolen Mill Co.--MN
Forstmann & Company, Inc.--GA
Forte, Dupee, Sawyer Co.--MA
Groenewold Fur & Wool Company--IL
Hanora Spinning, Inc.--RI, SC
 L.W. Packard & Co., Inc.--NH
 International Woolen Co., Inc.--ME
 Jagger Bros.--ME
 The Kent Manufacturing Company--SC
 Lometa Wool & Mohair Co.--TX
Mid-States Wool--OH, KS
Mt. Jefferson Woolens--OR
NAFTA Textile Mills--RI
Northwest Woolen Mills--RI
Ohsman & Sons Co., Inc.--IA
Ott & Zimmermann, Inc.--NJ
Ozona Wool & Mohair Co.--TX
Pendleton Woolen Mills--OR, WA
Priour-Varga Wool and Mohair Inc.--TX
Prouvost USA, Inc.--SC
Ranchman's Wool and Mohair Inc.--TX
R.C. Elliott & Co.--UT
Robinson Mfg.--ME
Roswell Wool and Mohair--NM
Roswell Livestock & Farm Supply--NM
Sanderson Wool Commission--TX
Southwestern Wool & Mohair, Inc.
Uvalde Producers Wool & Mohair--TX
Warren Corporation--CT
Wellman, Inc.--Miss., NC, NJ, SC
Westwood, Inc.--MA, RI
Western Wool & Mohair Co.--TX
Woodbury Wool Co.--CO
Wool Growers Central Storage--TX
The Wool Shed--UT
Woolrich, Inc.--PA
The Worcester Company--RI
    DuPont and Celanese also oppose and stand to be harmed by 
H.R.1360, because their fibers are commonly blended into wool 
and other fabrics, and because if enacted, this legislation 
would set a dangerous precedent for making future tariff cuts 
on imports of other types of fabrics and products. The National 
Cotton Council also opposes the legislation due to its 
precedent-setting nature.
      

                                


Statement of Yocom-McColl Testing Laboratories, Inc., Denver, Colorado

    Mr. Chairman: We appreciate the opportunity to comment to 
the Trade Subcommittee regarding our opposition to bill H.R. 
1360.
    Yocom-McColl Testing Laboratories, Inc. is the only 
independent wool testing laboratory in the United States. We 
have been established in Denver, Colorado since 1964 and 
provide fiber measurement services for the domestic wool and 
textile industry (everyone from producers to yarn and fabric 
makers). In the last three years, we have seen the industry 
decimated from the loss of wool producers to the closing of 
textile processing facilities and the disastrous result--the 
loss of thousands of jobs.
    Our laboratory has state-of-the-art equipment which has cut 
the cost of testing, but by the loss of sheep numbers and the 
closing of textile plants, it is questionable that there will 
be an independent wool testing facility surviving in the United 
States.
    Both H.R. 1360 and S.218 are essentially the same bill, 
written to cut or eliminate U.S. tariffs on imported wool 
fabrics. These bills further the destruction of the domestic 
wool and textile industry in an already hostile trade climate. 
Record levels of imports have already resulted in U.S. wool, 
yarn, and fabric plant closings and the layoff of over 1,600 
workers in 1998 and 1,600 more in the first two months of 1999. 
This summer has seen a further escalation in the loss of 
infrastructure in the domestic textile industry
    Wellman Industries announced it was closing its wool top 
business due to it customers being flooded with imports of wool 
garments and fabric and no sign of any reduction in import 
pressure. Forstmann & Company, Inc., one of the country's 
largest woolen and worsted wool fabric producing firms, 
announced it has filed for protection under Chapter 11 due to a 
15% decline in market demand. This was accompanied by further 
pressure from the dumping of wool fabric imports below cost to 
generate American dollars. Worcester Textile Company has 
closed, Roddie Wool Scouring was close to being shut down for 
lack of business, and Pendleton Woollen Mills closed its 
scouring operation. Burlington Industries is running at about 
10% of its normal capacity
    Enactment of HR 1360 in its entirety or any of its 
provisions would have a wide range of adverse effects on the 
remaining American wool, fiber, top, yarn and fabric producers. 
Wool fabrics are already subject to greater duty reductions 
than any other textile product. As part of the Uruguay Round/
WTO agreement, the U.S. is currently reducing tariffs on 
imported wool fabrics by about thirty percent.
    In addition, U.S. wool textile quotas are being completely 
eliminated under the WTO/Uruguay Round. Nor does the HR 1360 
legislation do anything to correct the problem of wool apparel 
imports from Canada under NAFTA. The loophole in NAFTA which 
hurts our wool and textile industry assures Canada a supply of 
non-NAFTA fabric and allows it to flood the U.S. with these 
goods under the NAFTA zero tariff rate. This problem has not 
been addressed by the Administration.
    The investments made by domestic wool fabric producers have 
been made in good faith based on WTO and NAFTA trade rules and 
timetables. The passage of HR 1360 completely undermines these 
investment decisions and blatantly emphasizes that U.S. trade 
agreements are no longer based on integrity, but on political 
expediency.
    The U.S. is entering a new round of WTO trade 
liberalization negotiations within the next six months. Any 
unilateral tariff cuts by the U.S. outside of the WTO 
negotiating context would assure that the United States and the 
U.S. textile industry would have already given up the 
opportunity to gain any trade concessions whatsoever in return 
from our foreign competition.
    In conclusion, it is not true that the U.S. wool fabric 
industry cannot produce fine wool fabrics. The domestic wool 
fabric industry annually produces over 10 million yards of 
70's, 80's and 90's wool fabrics. In the higher end--what is 
known the Super 100's and above--the U.S. wool fabric industry 
produces more than sixty percent (over 1.6 million yards) of 
the domestic suit manufacturers' requirements. The domestic 
wool fabric industry has the capacity to produce even greater 
amounts of fine wool fabrics.
    Recently publicized unemployment figures emphasize the 
addition of a high percentage of service-related positions in 
our country and a dramatic loss of manufacturing jobs. The 
manufacturing sector is one of the areas that can retain and 
improve technology and technical skills; the long range 
benefits of a population composed of telemarketers, customer 
service representatives, and sales associates is less certain.
    Thank you for giving us this opportunity to make a written 
statement in opposition to H.R. 1360, Wool Fabric Tariff Cut/
Elimination Legislation.
      

                                


H.R. 1582

    To suspend temporarily the duty on a certain chemical.
      

                                


                                     C. P. Hall Company    
                                    Chicago, Illinois 60606
                                                 September 17, 1999

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

Re: Opposition to H.R. 1582--Temporary Duty Suspension bill
    Triethyleneglycol bis(2-ethylhexanoate) (CAS No. 94-28-0)

    Dear Mr. Singleton:

    This submission refers to the submission made to you on subject, 
dated April 24, 1998.
    The situation is essentially unchanged. C. P. Hall respectively 
requests that H.R. 1582, temporary duty suspension on Triethyleneglycol 
bis(2-ethylhexanoate) not be passed into law. The reasons follow.
     C.P. Hall knows of the following domestic producers of 
said product. Eastman Chemical, C. P. Hall, and Teknor Apex. Also, this 
product could be made by a variety of other plasticizer manufacturers, 
as well as by many domestic toll producers.
     C.P. Hall's corresponding product is TegMeR 803 
and is of at least equivalent quality to the market demand.
     C. P. Hall is not aware of any raw material or production 
problems that would prevent any of the above named suppliers from 
meeting the present requirement of the petitioner, Solutia, and 
expected growth.
     C. P. Hall has in the past proposed to Solutia to supply 
partial or full requirement on said product. We are prepared to invest 
and assure quality on their total requirement.
     C. P. Hall has manufacturing facilities in Chicago, IL and 
Carteret, NJ, whose operations could be adversely impacted by passage 
of H.R. 1582.
    This product is used in a variety of other polymers in the U.S. 
most notably in rubber compounds and plastics. A technical data sheet 
and MSDS for said product were included in last year's submission.
    For further information, please contact me directly and I thank you 
for consideration of this opposition to H.R. 1582.

            Very truly yours,
                                      Dr. Marvin J. Burgess
                                                    Product Manager

ccs: V. Kamenicky--Commerce
C. Robinson--USITC
R. Cantrell--USITC
      

                                


                   E. I. du Pont de Nemours and Company    
                                       Wilmington, DE 19880
                                                 September 20, 1999

BUSINESS PROPRIETARY INFORMATION

CONFIDENTIAL TREATMENT REQUESTED

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: Miscellaneous Trade and Tariff Legislation

    Dear Mr. Singleton:

    I am writing on behalf of E. I. du Pont de Nemours and 
Company (``DuPont'') in response to your request for submission 
of written comments on legislation introduced in the 106th 
Congress which, if enacted, would provide temporary suspensions 
of duty for specific products. DuPont is opposed to H.R. 1582, 
a bill that would amend Subchapter II of Chapter 99 of the 
Harmonized Tariff Schedule of the United States by inserting a 
new heading, 9902.32.50, for triethyleneglycol bis (2-ethyl 
hexanoate) (CAS No. 94-28-0) provided for in subheading 
2915.90.50 as duty free through December 31, 2002.
    DuPont is a science and technology based company 
headquartered in Wilmington, Delaware. Its markets include 
high-performance materials, specialty chemicals, pharmaceutical 
and biotechnology.
    Triethyleneglycol bis 2-ethyl hexanonte is a plasticizer 
that is an integral ingredient used in the manufacture of 
polyvinyl butyral (``PVB''). The primary use of PVB is 
laminated safety glass used in windshields and construction 
projects. DuPont is one of two domestic manufacturers of PVB, 
which it markets under the tradename Butacite. 
DuPont's PVB production process uses a (different plasticizer, 
tetraethylene glycol di-heptanoate,) commonly referred to as 
(4G7), which it toll manufactures in New Jersey. DuPont 
domestically manufactures PVB at two plants located in North 
Carolina and West Virginia. Approximately (3000) employees 
support DuPont's domestic PVB operations.
    Presently, there is sufficient capacity within the United 
States of glycol based plasticizers used to manufacture PVB. 
Indeed, there is overcapacity for PVB production two to three 
times U.S. demand. Consequently, both domestic producers export 
a significant amount of their US manufactured PVB. Eliminating 
the tariff on the plasticizer would lead to an increase in the 
oversupply of PVB and negatively affect current plant 
utilization. DuPont believes the tariff suspension request is 
merely a mechanism to gain additional unnecessary and unfair 
reductions on the import price of PVB at the expense of 
domestic manufacturers. Imports from low priced foreign 
producers would lead to further price suppression and erode 
average U.S. selling prices of the end product, PVB. These 
lower prices would make it increasingly difficult for domestic 
producers to support future investment in United States PVB 
production, which ultimately could lead to decreased 
employment.
    Based upon the information and reasons outlined above, DuPont 
strongly opposes H.R. 1582. DuPont remains willing to provide any 
additional information that would be useful, and very much appreciates 
the opportunity to express its views.

            Very truly yours,
                                            Elaine M. Olsen

* Business proprietary information is bracketed.

cc: Committee on Finance
Mr. Raymond L. Cantrell, U.S. International Trade Commission
Mr. Vince Kamenicky, International Trade Administration, U.S. 
Department of Commerce

bcc: R. J. Byers, P&IP
D. G. B. Gamble, Legal
V. H. Leichliter, Legal
R. M. Heine, EA
      

                                


H.R. 1740

    To reliquidate certain entries of N,N-dicyolohexyll-2-
benzothazole-sulfenamide.

                         No comments submitted.

      

                                


H.R. 1808

    To provide an exemption from certain import prohibitions.
      

                                


Statement of Frutarom, Inc., North Bergen, New Jersey

                               I. Summary

    Frutarom, Inc. (``Frutarom''), established in 1926, is a 
leading processor and supplier of gum arabic, and one of only 
three processors in the United States. Gum arabic is an 
essential ingredient in a wide variety of products vital to the 
United States economy. Prior to the imposition of the sanctions 
against Sudan on November 3, 1997, Sudan was the principal 
source of supply for the United States, and the only reliable 
source in the world. Since the imposition of the sanctions, the 
importation of gum arabic from Sudan is banned. As a result, 
the United States processors of gum arabic, industry sectors 
that use gum arabic, and United States consumers that purchase 
products with gum arabic face severe economic consequences, 
unless Congress acts now to pass an exemption for the 
importation of gum arabic under H.R. 1808.
    Frutarom testified before the Subcommittee on the Use and 
Effect of Unilateral Sanctions against Sudan on May 27, 1999. 
Since then, Frutarom has continued to press the State 
Department with its pending license application to waive the 
Sudanese sanctions to permit badly needed imports of gum 
arabic, but as of this date, no such waiver has been granted. 
We understand that the reluctance to grant the application 
reflects the strongly held views of some officials within the 
government that the United States must not fail to uphold human 
rights. We agree that human rights must be upheld in our own 
country and throughout the world. But the trade embargo as it 
affects gum arabic is benefiting the Khartoum government, with 
no apparent impact on human rights goals, and it is and 
threatening to destroy the jobs and livelihoods of American gum 
arabic processors in the United States.
    Current trade data and other factors demonstrate that the 
Khartoum government is benefiting from the United States trade 
embargo on gum arabic, while American processors are seeing 
their businesses gutted by foreign competition. Gum arabic is 
one of Sudan's major exports. Our European allies have not 
joined the United States in economic sanctions against Sudan 
and, as a result, Sudan is free to trade with the rest of the 
world, and does. Sudan has a ready market for gum arabic 
throughout Europe and particularly in France, where since the 
imposition of the U.S. sanctions French gum arabic processors 
have doubled their imports from Sudan in an aggressive move to 
dominate the United States gum arabic market. The rise in 
Sudanese exports of gum arabic to France and other European 
countries, coupled with limited world supplies, has increased 
the price of Sudanese gum arabic, directly benefiting Sudan.
    Unless Congress moves quickly to grant relief to United 
States gum arabic processors, French processors are positioned 
to take over the United States gum arabic market, thereby 
controlling the price of the product. European processors, 
particularly the French, systematically target the customers of 
United States processors with the lure of high quality Sudanese 
gum arabic. Additionally, French processors have been bidding 
up the price on alternative sources of lesser quality Chadian 
gum arabic, making it extremely difficult for United States 
processors to compete in domestic and international markets. 
Left unchecked, this will result in the loss of the United 
States gum arabic processing industry, the loss of jobs, higher 
product costs for United States consumers, and the loss of 
export markets for U.S. processed gum arabic.
    There is no question that the Khartoum government has 
committed unthinkable atrocities against its own people on a 
massive scale, not unlike other countries with which the United 
States continues trade relations. Sudan has been embroiled in a 
terrible civil war since 1983. The Khartoum government, which 
displaced a democratically elected government in 1989, has 
continued the conflict against the people of southern Sudan. 
But the government is not alone in committing the atrocities, 
according to a recent opinion piece by U.S. Assistance 
Secretary for African Affairs, Susan Rice.\1\ ``Crimes against 
civilians have also been perpetrated by the Sudan People's 
Liberation Army, the largest rebel movement in Sudan,'' she 
acknowledges. In an eloquent, public plea to end the brutal war 
against civilians, Assistant Secretary Rice calls on world 
governments to enforce the UN sanctions imposed on Sudan in 
1996. However, she does not use this forum to call for 
multilateral support of United States economic sanctions. It 
appears clear from her statements that multilateral sanctions 
are not achievable against Sudan. Our Canadian neighbors are 
investors in Sudan's oil industry, and the Europeans are active 
trading partners with Sudan. Thus, after almost two years of a 
complete trade embargo against Sudan, no discernable change in 
human rights has been achieved, based on the assistant 
secretary's article. While there is no evidence that the 
Sudanese have been hurt, our comments quantify how American's 
have been hurt, which is the direct result of the 
Administration's unintended policy.
---------------------------------------------------------------------------
    \1\ Susan Rice and David Scheffer, Sudan Must End Its Brutal War 
Against Civilians, International Herald Tribune, September 1, 1999. Ms. 
Rice is Assistant Secretary for African Affairs. Mr. Scheffer is U.S. 
Ambassador at large for war crimes.
---------------------------------------------------------------------------
    The facts outlined above and discussed below demonstrate 
that gum arabic from Sudan is an ineffective and unacceptable 
choice for unilateral sanctions, and multilateral sanctions 
appear highly unlikely. We urge the Subcommittee to move H.R. 
1808 forward for full consideration by the House.

     II. Gum Arabic and Its Importance to the United States Economy

a. What is Gum Arabic?

    Gum arabic is a natural gummy exudate obtained by tapping 
the branches of the Acacia Senegal tree. It is grown primarily 
in what is known as the Gum Belt along the southern periphery 
of the Sahara Desert. Approximately 75% to 80% of the world's 
gum arabic is produced in Sudan. Moreover, the finest quality 
gum arabic is found in Sudan.
    Gum arabic production begins with the Sudanese farmer who 
tends his very valuable trees throughout the year. At exactly 
the right time of year, determined by expertise acquired over 
many years, the farmer taps his trees. Gum exudes where the 
bark has been cut and three weeks later the first gum arabic 
collection is made. Millions of Sudanese men and women, of 
every ethnic background, rely on gum collection as a vital 
source of income.
    Gum arabic is a remarkable substance. It is used in 
products purchased every day by United States consumers. In 
pharmaceuticals, gum arabic is used as a binder in tableting. 
In cough syrups it is used as a demulcent. In the flavor and 
beverage industries it is a preferred emulsifier. Gum arabic is 
used to stabilize foam in the manufacture of soft drinks and 
beer and to clarify wine. As an emulsifier, gum arabic provides 
excellent shelf-life stability to oil-in-water emulsions and 
does not mask flavors with filmy texture or off-flavor on the 
tongue, features unmatched by synthetic additives. In 
cosmetics, it functions as a stabilizer in lotions and screens. 
Gum arabic increases the viscosity of cosmetics, imparts 
spreading properties, and gives a protective coating and smooth 
feel. In lithography, it is used in the preparation of etching 
and plating solutions, plate washes, and protective coatings 
for the plates in storage. In confections, it is used primarily 
to retard sugar crystallization and emulsify fat. It also is 
used as a glaze component in chewing gums, cough drops, and 
lozenges. In textiles, it is used as a fabric finish. In foods, 
it is commonly used in meats, sauces and dressings, baked 
goods, candy, cheeses, ice creams, icings and numerous other 
food products. The product is vital to the United States 
economy.

b. Non-substitutability

    No substitutes match gum arabic's extraordinary film-
forming and emulsifying qualities. Users of gum arabic have 
encountered every form of disincentive to continue using this 
beleaguered product. Famine, drought, pestilence, wild price 
swings, shortages, and political crises have given the broadest 
opportunity for suppliers of competitive products to replace 
gum arabic. Synthetic imitators from modified starches and 
maltodextrins, and other products have been developed to take 
advantage of the vulnerability of supply of gum arabic, but 
these substitutes have failed to replace gum arabic in most 
pharmaceutical, food, and beverage products where taste, mouth 
feel, superior emulsification, low calorie value, high fiber 
content and extended product shelf-life are demanded by United 
States industries and consumers.
    In the early 1970's United States gum arabic consumption 
exceeded 33 million pounds per year. The famine in the gum belt 
of 1973-1975 resulted in a tripling of gum prices and gum 
arabic usage was cut nearly in half. Certain bulk usage 
applications in non-food products were permanently replaced. We 
believe that most applications where gum arabic was 
substitutable were successfully targeted during this period.
    Since the disastrous period of the 1970's, and the 
droughts, shortages, and price increases during the 1980's and 
1990's, gum arabic usage in the United States has not 
diminished. The volume has actually grown roughly in line with 
the growth of the product category served. Periodic displeasure 
with the challenges of supply have led to warnings of the 
product's demise, but its film-foaming and emulsifying 
qualities have necessitated its survival. The emphasis in 
recent years on the importance of ``natural'' and ``soluble 
fiber'' have further secured gum arabic's position in the 
United States market.
    The inability of certain industry sectors, such as the 
beverage, food and pharmaceutical industries, to secure high 
quality gum arabic would have an immediate and negative impact 
on the United States economy by lessening the quality of their 
products and reducing their sales. Competing imported products 
manufactured with gum arabic would gain a qualitative 
advantage, and thus would further damage United States 
producers.

                  III. Absence of Alternative Sources

a. Quality

    Gum arabic grown in Chad holds the best promise of 
replacing Sudanese gum arabic, but only in the future. Current 
crop yields in Chad are immature and of lesser quality than 
Sudanese gum arabic, with viscosity levels as much as ten times 
higher than the levels present in the Sudanese product. Much of 
the gum arabic Frutarom has purchased from Chad is of viscosity 
levels too high to be accepted by key industry sectors served. 
The best method of achieving an appropriate viscosity level 
using Chadian gum arabic is by mixing the product with Chadian 
gum arabic containing lower viscosity levels, or blending the 
product with Sudanese gum arabic. Mixing and blending are both 
processes which add considerable costs and can drive up the 
price of the customer specified product. Frutarom must buy 
larger than standard quantities of Chadian gum arabic in order 
to achieve appropriate viscosity levels demanded by customers. 
In some instances, even after costly mixing of the Chadian gum 
arabic, Frutarom's customers have rejected orders, causing the 
company to begin the expensive process again with a different 
batch of gum arabic. But quality is not the only issue 
affecting Frutarom's competitive position in United States and 
international markets.

b. Price

    Because of the artificial demand created by the unilateral 
sanctions, and despite its lesser quality, the price of the 
Chadian gum arabic is higher than world prices for the Sudanese 
product. Currently, as a direct result of unilateral sanctions 
against Sudan, Frutarom has paid about 40% to 50% more for 
lesser quality Chadian gum arabic than European competitors are 
paying for the highly desirable Sudanese gum arabic. Other 
factors are driving up the price of Chadian gum arabic. French 
competitors are bidding up the price in order to drive American 
processors out of business. If European competitors are allowed 
free reign of the United States market, American consumers will 
be subject to monopolistic pricing.

                    IV. Loss of Competitive Position

a. Loss of Domestic Market

    Without authorization to import additional quantities of 
the Sudanese product, Frutarom and other United States 
processors will not be able to compete with European 
counterparts in quality and price. Recent cancellations of 
international orders placed with Frutarom, as well as current 
trade data, already show signs that United States processors 
are losing international export markets to European 
competitors. But much more threatening is the loss of the 
domestic market to France and other European competitors who 
have unfettered access to high grade Sudanese gum arabic.
    French import data show that French imports of gum arabic 
from Sudan have doubled since the sanctions were imposed, more 
than compensating Sudan for the direct loss of United States 
gum arabic trade. At the same time, French exports of gum 
arabic to the United States have reached a record high.
    Incredibly, in just one year French imports of gum arabic 
from Sudan jumped from 5,556 tons during 1997 to 10,701 tons 
during 1998. During the combined years of 1997 and 1998, French 
exports to the United States increased almost 60% over 1996 
exports. Alarmingly, this trend has continued into 1999, as 
French trade data for the first quarter of 1999 show that the 
French increased their exports to the United States by almost 
20 percent over 1998. United States import data for January and 
February of 1999 show that France has replaced Sudan as one of 
the leading exporters of gum arabic to the United States with a 
record 51% share of the U.S. import market, substantially up 
from the 23% share for the same period in 1998. During the 
first two quarters of 1999, United States data show a steady 
increase in French imports. While Great Britain has not gained 
significant market share in the United States, imports from the 
U.K. increased by 125% during the first two quarters of 1999 as 
compared to the same period during 1998, showing a steady 
erosion of the U.S. processors' market. And as expected, United 
States imports from Chad increased due to the sanctions, but 
only to a 45% share of U.S. imports for 1998. During the first 
two quarters of 1999, the data show that U.S. imports from Chad 
increased to 52% share of the market. However, we believe the 
increased market share of Chadian gum arabic is not an 
indication of greater import penetration, but represents 
excessive and uneconomic imports due to the processors' need to 
buy larger quantities of Chadian gum arabic in order to attain 
acceptable viscosity levels.
    Frutarom's domestic customers have been directly targeted 
by French processors marketing Sudanese gum arabic. French 
processors are happily aware that the United States government 
has not granted waivers for imports of Sudanese gum arabic for 
1999 and beyond.
    The French trade data for 1998 show that 51% of its total 
gum arabic imports came from Sudan, and only about 28% imported 
from Chad. There can be no doubt that French exports to the 
United States include high quality Sudanese gum arabic which 
has been spray dried and processed in France and exported to 
the States as a product of France. Thus, the only differences 
in gum arabic available in the U.S. prior to and after the 
November, 1997 sanctions are that the French processors have 
replaced the U.S. processors and the French are now in the 
position to control the price processed gum arabic.

b. Loss of Export Market

    Frutarom cannot match European competitors in terms of 
price and quality in international markets. Frutarom recently 
lost a long-time customer in Asia for reasons the customer 
described as a product quality issue. The overseas customer of 
many years broke its contract with Frutarom in favor of French 
competitors, who are marketing the Sudanese processed product 
at prices United States processors are unable to offer for the 
Chadian product.
    Frutarom's loss of international business is not isolated. 
Current trade data support the conclusion that this is a 
frequent occurrence. A close examination of United States and 
French trade data show a loss of export market share to the 
French in traditional United States export markets. The data 
show early signs of declines in exports to Mexico and certain 
South American countries such as Brazil, Colombia, Argentina, 
Chile, Venezuela, with corresponding increases in French 
exports to these markets. For the combined years of 1997 and 
1998, French exports worldwide increased more than 40%, and 
this trend has continued in 1999 with more than a 15% increase 
during the first quarter of 1999. U.S. export data show that 
exports of gum arabic declined approximately 15% in 1998, from 
the previous year. However data for the first quarter of 1999 
show a dramatic drop in U.S. exports of gum arabic. Exports 
plunged approximately 38% from the same period during 1998. The 
decline in United States exports of gum arabic will continue in 
1999 and become more pronounced by 2000 if relief is not 
granted. Thus, the effect of the unilateral embargo on gum 
arabic is to worsen the United States trade deficit.

                             V. Conclusion

    After almost two years of sanctions, the evidence is very 
clear that the Sudanese government and foreign processors are 
benefiting from the embargo on gum arabic from Sudan. The once 
dominate position of United States gum arabic processors is 
being lost to French and other European processors. The 
Administration is ceding an entire industry, one that has been 
strong for many decades, to foreign competition, and with that 
goes the livelihoods of Americans. Sanctions often impact the 
poorest people, not only in the sanctioned country, but in the 
United States, as well. Frequently they impact jobs of those 
who depend on weekly pay-checks to support their families. Job 
loss already has occurred among the gum arabic processors. We 
appeal to you to look first into your back yard and protect 
American families impacted by this untenable situation.
    By voting favorably on H.R. 1808, you have an opportunity 
to stabilize the market and prevent the Sudanese from 
benefiting from a policy that was intended to induce positive 
change in Sudan. Once shipments return to pre-sanction levels, 
prices should stabilize and Sudan may begin to feel the pain of 
the United States sanctions. At the same time, you will save an 
American industry, assist in the battle to overcome the trade 
deficit, and protect American consumers from monopolistic 
practices of foreign processors.
    We would be pleased to provide any additional information 
the Subcommittee may require to address this very serious 
issue.
      

                                



                                                           United States Imports of Gum Arabic
                                                                  Quantity in Kilograms
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          1999 Jan/Feb       1998 Jan/Feb             98           97 (Imposition of          96
                                                      -----------------------------------------------------------     Sanctions)     -------------------
                                                                                                                 --------------------
                                                        Imports    Share    Imports    Share    Imports    Share    Imports    Share    Imports    Share
--------------------------------------------------------------------------------------------------------------------------------------------------------
France...............................................    754,758     51%     709,451     23%   5,325,605     34%   4,479,040     40%   3,190,359     32%
Sudan................................................          0       0   2,097,000     68%    2537,000     17%   3,564,140     33%   3,299,760     33%
Chad.................................................    658,182   44.6%     157,600      5%   5,640,633     37%   2,425,189     22%   1,577,053   15.7%
UK...................................................     24,151    1.6%      24,326    .79%     244,171    1.6%     282,374    2.6%     323,999    3.2%
Nigeria..............................................     20,000   1.35%      80,000   2.60%     569,442   3.72%     676,349    6.2%     639,486    6.4%
World................................................  1,473,591  ......   3,069,501  ......  15,288,286  ......  10,908,755  ......  10,021,268
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Source: United States Department of Commerce, Census Bureau. Global Trade Database
** HTS No. 1301.20.0000



                                          French Imports of Gum Arabic
                                                Quantity in Tons
----------------------------------------------------------------------------------------------------------------
                                                         98                    97                    96
                                               -----------------------------------------------------------------
                                                   Imports     Share     Imports     Share     Imports     Share
----------------------------------------------------------------------------------------------------------------
Sudan.........................................    10,701.900     51%     5,556.000     33%     5,344.100     40%
Chad..........................................     5,925.100     28%     5,033.100     30%     3,977.500     30%
Nigeria.......................................     1,577.100    7.5%     2,301.800     14%     1,119.900      8%
United States.................................       391.100    1.9%       335.300    2.0%       206.000    1.5%
World.........................................    20,965.200  ......    16,853.200  ......     13,199.29
----------------------------------------------------------------------------------------------------------------
*Source: Global Trade Information Services
** HTS No. 1301.20.0000



                                              United States Exports
                                              Quantity in Kilograms
----------------------------------------------------------------------------------------------------------------
                                                                                           97
                                                 1999 Jan/   1998 Jan/                 (Imposition
                                                    Feb         Feb          98            of            96
                                                                                       Sanctions)
----------------------------------------------------------------------------------------------------------------
Mexico........................................      14,646      22,725       182,438       129,270       208,979
Brazil........................................           0           0        20,735       126,007       117,278
Argentina.....................................         774         678        21,580        47,686        33,897
Colombia......................................           0      16,896        51,414        54,126        71,571
Chile.........................................           0           0         4,465             0        27,837
Venezuela.....................................           0       2,068         2,803        80,040        25,266
Philippines...................................           0      21,284        21,284        47,183       161,854
Japan.........................................       8,294       8,016        62,491       228,928       247,809
World.........................................     225,891     225,118     2,052,068     2,384,716     2,064,877
----------------------------------------------------------------------------------------------------------------
Source: United States Department of Commerce, Bureau of Census, Global Trade Database


      

                                



  United States Imports, 1999/1998 First and Second Quarter Comparison
                          Quantity in Kilograms
------------------------------------------------------------------------
                                             1999  Jan-
                                               June       1998  Jan-June
------------------------------------------------------------------------
France..................................       2,483,058       2,278,345
Great Britain...........................          85,031          37,718
Chad....................................       3,324,288       2,313,719
Sudan...................................               0       2,097,000
World...................................       6,385,923       7,241,882
------------------------------------------------------------------------


                   United States World Exports, 1999/1998 Comparison, First and Second Quarter
----------------------------------------------------------------------------------------------------------------
                                                                     1999  Jan-                   Loss of Export
                                                                       June       1998  Jan-June      Market
----------------------------------------------------------------------------------------------------------------
World...........................................................         759,974       1,222,406             38%
----------------------------------------------------------------------------------------------------------------


                            French World Exports, 1999/1998 Comparison, First Quarter
                                              Quantity in Kilograms
----------------------------------------------------------------------------------------------------------------
                                                                     1999  Jan-
                                                                       June       1998  Jan-June    Market Gain
----------------------------------------------------------------------------------------------------------------
World...........................................................       3,553,200       3,079,000          15.40%
United States...................................................       1,208,900       1,011,700          19.49%
----------------------------------------------------------------------------------------------------------------

      

                                


H.R. 1951

    To suspend temporarily the duty on HIV/AIDS drugs.

                         No comments submitted.

      

                                


H.R. 1952

    To suspend temporarily the duty on HIV/AIDS drugs.

                         No comments submitted.

      

                                


H.R. 1963

    To suspend until December 31, 2002, the duty on 
triacetonamine.
      

                                


                                      JBC International    
                                       Washington, DC 20006
                                                  22 September 1999

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: Comments on Miscellaneous Corrections to Trade Legislation and 
        Miscellaneous Duty Suspension Bills, Advisory No. TR-15, from 
        the Committee on Ways and Means, Subcommittee on Trade, dated 
        12 August 1999, regarding technical changes to improve the 
        trade laws submitted by the Administration, the business 
        community, and the public, and also proposed legislation to 
        provide temporary suspension of duty for certain specific 
        products.

    Dear Mr. Singleton:

    On behalf of the Uniroyal Chemical Company, we respectfully submit 
these comments on the proposals for miscellaneous corrections to trade 
legislation and miscellaneous duty suspension bills now under 
consideration by the Committee.
    Uniroyal Chemical is a leading worldwide manufacturer of specialty 
chemicals and polymers to customers in over 120 countries with sales 
exceeding $1 billion. Headquartered in Middlebury, Connecticut, the 
company serves many markets including rubber processing, plastics, crop 
protection, petroleum, petrochemical, recreation, graphic arts, mining, 
electronics, adhesives and sealants, and paints and coatings.
    We offer comments in support of H.R. 1963, Proposed Duty Suspension 
for Triacetonamine (TAA), and H.R. 2194, Proposed Duty Suspension for 
Butralin.
    Triacetonamine (H.R. 1963). TAA is a proprietary nitroxyl free 
radical mixture with ethylbenzene, which is used as a raw material in 
the manufacture of Uniroyal Chemical Company's line of NAUGARD SFR 
(stable free radical) polymerization inhibitor chemicals. These 
chemicals inhibit the development of polymers during the curing of 
rubbers and plastics. Uniroyal's NAUGARD SFR product line is unique in 
that it is characterized by very low usage levels (approximately 20% as 
much as other inhibitor chemicals), does not require air injection, and 
has high storage stability. It has low toxicity and environmental 
impact. It is a dark orange or brown viscous liquid with a 
characteristic odor.
    TAA is a proprietary chemical not produced domestically in the 
United States. It is manufactured by Huls Incorporated in Germany. 
Product testing and research on TAA has been carried out at the 
Uniroyal facility in Naugatuck, CT. All TAA used in manufacturing 
NAUGARD SFR, however, is imported. Import projections, values, and 
tariff rates for 2000, 2001, and 2002 result in assessed duties ranging 
from $79,000 to $93,000, far below the revenue loss threshold to 
warrant favorable consideration for duty suspension purposes.
    Suspending the duties on TAA will allow Uniroyal to reduce its 
costs for producing NAUGARD SFR and thereby pass these savings on to 
the rubber chemical manufacturers who purchase this product. The modest 
cost of this legislation in foregone duty collections is far outweighed 
by its stimulating effect on the economy and the growth of cutting edge 
chemical technology in the U.S.
    Butralin (H.R. 1963). Butralin is a plant growth regulator for 
control of suckers on flue-cured and air-cured tobaccos, including 
burley, Maryland, dark, and cigar types. It is a limpid yellow orange 
liquid with an aromatic odor. Butralin mixes readily with water to form 
a yellow, creamy emulsion. It may be applied alone or in a tank mix 
with maleic hydrazide products. If allowed to stand for several hours, 
or if exposed to the air for extended periods, it may form a yellow 
orange waxy solid necessitating thorough agitation before resuming 
spraying. It is typically applied with motorized field sprayers 
equipped with nozzles that deliver a coarse spray. It may also be 
applied by using a hand-held dropline, knapsack sprayer, or jug 
application. Butralin is used only for tobacco farming.
    Butralin is manufactured by CFPI Agro in France. It is not produced 
domestically in the United States. Product testing and research on 
Butralin has been carried out at the Uniroyal facility in Gastonia, NC. 
Import projections, values, and tariff rates for 2000, 2001, and 2002 
result in assessed duties ranging from about $51,000 to $53, 400, far 
below the revenue loss threshold to warrant favorable consideration for 
duty suspension purposes.
    Reducing the landed cost for Butralin would allow Uniroyal Chemical 
to pass on the resultant savings to tobacco farmers who would use 
Butralin and who have been economically distressed in recent years. 
Given that the U.S. is scheduled to reduce its tariff rates during this 
period in keeping with its commitments in the Uruguay Round, the cost 
of the legislation in foregoing revenue collections is minimal and 
becomes less each year.
    We believe these proposals are perfect examples of what the duty 
suspension provisions are intended to accomplish. All parties will 
benefit from the immediate suspension of tariffs on TAA and Butralin. 
We strongly urge support of these legislative initiatives.

            Sincerely,
                                       G.M. Mattingley, Jr.
                                 Vice President, Government Affairs
      

                                


H.R. 2064

    To suspend temporarily the duty on instant print film.

                         No comments submitted.

      

                                


H.R. 2065

    To suspend temporarily the duty on instant print film.

                         No comments submitted.

      

                                


H.R. 2071

    To suspend temporarily the duty on a certain chemical used 
in the textile industry and in water treatment.

                         No comments submitted.

      

                                


H.R. 2072

    To suspend temporarily the duty on a certain chemical used 
in the paper industry.

                         No comments submitted.

      

                                


H.R. 2073

    To suspend temporarily the duty on a certain chemical used 
in water treatment.

                         No comments submitted.

      

                                


H.R. 2074

    To suspend temporarily the duty on a certain chemical used 
in water treatment and beauty care products.

                         No comments submitted.

      

                                


H.R. 2075

    To suspend temporarily the duty on a certain chemical used 
in photography products.

                         No comments submitted.

      

                                


H.R. 2076

    To suspend temporarily the duty on a certain chemical used 
in peroxide stabilizer and compounding.

                         No comments submitted.

      

                                


H.R. 2078

    To suspend temporarily the duty on a certain chemical used 
in the textile industry.

                         No comments submitted.

      

                                


H.R. 2098

    To suspend temporarily the duty on dark couverture 
chocolate.

                         No comments submitted.

      

                                


H.R. 2099

    To suspend temporarily the duty on mixtures of sennosides.

                         No comments submitted.

      

                                


H.R. 2132

    To suspend temporarily the duty on Cibacron Red LS-B HC.

                         No comments submitted.

      

                                


H.R. 2133

    To suspend temporarily the duty on Cibacron Brilliant Blue 
FN-G.

                         No comments submitted.

      

                                


H.R. 2134

    To suspend temporarily the duty on Cibacron Scarlet LS-2G 
HC.

                         No comments submitted.

      

                                


H.R. 2135

    To suspend temporarily the duty on MUB 738 INT.

                         No comments submitted.

      

                                


H.R. 2142

    To suspend for 3 years the duty on fenbuconazole.

                         No comments submitted.

      

                                


H.R. 2143

    To suspend for 3 years the duty on 2,6-dichlorotoluene.

                         No comments submitted.

      

                                


H.R. 2144

    To suspend for 3 years the duty on 3-Amino-3-methyl-1-
pentyne.

                         No comments submitted.

      

                                


H.R. 2145

    To suspend for 3 years the duty on triazamate.

                         No comments submitted.

      

                                


H.R. 2146

    To suspend for 3 years the duty on methoxyfenozide.

                         No comments submitted.

      

                                


H.R. 2147

    To suspend until December 31, 2002, the duty on cyclic 
olefin copolymer resin.

                         No comments submitted.

      

                                


H.R. 2150

    To suspend temporarily the duty on 1-fluoro-2-nitro 
benzene.

                         No comments submitted.

      

                                


H.R. 2151

    To suspend temporarily the duty on thionyl chloride.
      

                                


                          Bayer Corporation, U.S.A.        
                    International Regulatory Compliance    
                                       Pittsburgh, PA 15205
                                                     Sept. 17, 1999

The Honorable Philip M. Crane
Chairman, Subcommittee on Trade
House Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

    Dear Chairman Crane:

    Bayer Corporation operates major businesses in health care, life 
sciences, chemicals and imaging technologies, employs 24,000 people 
throughout the United States and is headquartered in Pittsburgh, 
Pennsylvania. Bayer Corporation is the largest subsidiary of Bayer AG, 
a $32 billion pharmaceutical and chemical company based in Leverkusen, 
Germany, with 140,000 employees worldwide.
    Currently, Bayer AG is one of two producers of Thionyl Chloride 
(TC) worldwide. The other producer of Thionyl Chloride is Sauerfabrik 
(formerly Schweitzerhalle) in Switzerland. Thionyl Chloride is not 
manufactured in the United States but is an important ingredient in 
many U.S. and international products. Thionyl Chloride is used in the 
production of agricultural fungicides, to protect U.S. crops. It also 
has a humanitarian use as a raw material in the manufacture of protease 
inhibitors for the treatment of HIV/AIDS infected individuals. Thionyl 
Chloride is also used by major U.S. manufacturers as an electrolyte for 
lithium chloride batteries, as a pharmaceutical for controlling stomach 
acid, as a dehydrator to remove water from air conditioning fluid and 
as an imaging chemical for photographic applications.
    Although Thionyl Chloride is listed on Schedule C of the Chemical 
Weapons Convention (CWC), Bayer Corporation does not sell Thionyl 
Chloride to any military or government entity. In addition, Bayer 
requires an End-User Certificate from all customers and complies fully 
with the reporting and certification requirements.
    Thionyl Chloride customers include FMC Corporation, Uniroyal, 
Eastman Chemical, Merck and Rohm and Haas. The pharmaceutical and 
agriculture industries as well as Bayer Corporation's customers and 
Industrial Product Division with major operations at Baytown, Texas 
would benefit from the tariff suspension on sales of Thionyl Chloride.
    We hope this supplemental information is useful in the ITC 
deliberations regarding proposed tariff suspension for Thionyl 
Chloride. Please don't hesitate to contact us with any questions.

            Very sincerely,
                                       Karen L. Niedermeyer
      

                                


Duty Suspension Bill for Thionyl Chloride

                          Title as introduced:

    To suspend temporarily the rate of duty on thionyl 
chloride.

                            Summary of bill:

    Temporarily suspends the most-favored-nation (MFN) rate of 
duty on imports of thionyl chloride through December 31, 2002.

Effective date:

    The 15th day after enactment.

Retroactive effect:

    None.

                         Statement of purpose:

    Thionyl Chloride (TC) is used to manufacture agricultural 
pesticides, pharmaceutical intermediates, such as those used to 
make protease inhibitors for HIV treatment, and is also used in 
the chemical industry as a mild chlorinating agent. It is 
listed on Schedule C of the Chemical Weapons Convention (CWC) 
(1) because it is a precursor to weapons agents. Schedule C 
compounds are considered valuable commercial compounds but it 
is recognized that they can be misused to make chemical 
weapons. Due to the concerns about misuse, Bayer Corporation 
does not sell TC to any military or government entity. TC 
Customers include FMC Corporation, Uniroyal, Eastman Chemical, 
Merck and Rohm and Haas. Bayer's Industrial Products Division, 
with major operations at Baytown, Texas would benefit from the 
tariff suspension on sales of TC.\1\
---------------------------------------------------------------------------
    \1\ The CWC bans the manufacture, use, possession and stockpiling 
of chemical weapons. It was ratified by the U.S. Congress in 1997 and 
is in full implementation. All but a few nations have ratified the 
treaty. Bayer Corporation imports TC from Germany, one of the countries 
involved in crafting the original treaty and one of the first countries 
to ratify the CWC. All of the requirements that apply to TC are the 
same in both countries. Reporting requirements of the CWC are triggered 
by the storage of 30 tons of TC; reporting and verification 
requirements of TC are triggered by 200 tons. In addition, Bayer 
requires an End-User Certificate from all customers and complies fully 
with the reporting and verification requirements.
---------------------------------------------------------------------------

                     Product description and uses:

     Thionyl chloride is a colorless to slightly yellow liquid 
that is highly corrosive. Synonyms for this product are 
sulfurous oxychloride and sulfur oxychloride. Thionyl chloride 
is used in the chemical industry, for example, as a 
chlorinating agent for pharmaceutical and agricultural 
products. Imported TC is delivered to bulk storage at Bayer's 
Baytown Texas plant and stored there until transported out of 
the plant by rail cars, tank trucks and drums to Bayer's 
various customers in the U.S. The Baytown plant has state-of-
the art security measures employed throughout the plant. In 
particular, TC is stored in an area which has 24 hour security 
and the storage containers must be operated manually.

                           Tariff treatment:


------------------------------------------------------------------------
                                                         Col. 1-general
             Product                 HTS Subheading       Rate of Duty
------------------------------------------------------------------------
Thionyl chloride................  2812.10.5050.......               3.7%
------------------------------------------------------------------------


     Structure of domestic industry (including competing products):

    Thionyl chloride is not manufactured in the United States.
    There are a number of chlorinating agents that may be 
considered when introducing chlorine into an organic molecule. 
Selection of the ``optimum'' chlorinating agent is based not 
only on relative price, but on the intended reaction chemistry 
of the planned process and the equipment available. There are 
seven commonly used chlorinating agents: elemental chlorine, 
hydrochloric acid (with pressure), sulfuryl chloride, phosgene 
(extremely toxic), phosphorous trichloride, phosphorous 
oxychloride and thionyl chloride. Thionyl chloride is 
considered a mild chlorinating agent and is used in syntheses 
where this property is a benefit to effective yield, efficiency 
(non solid residues) and economy.

                           U.S. consumption:

    Approximately 7,750,000 lbs. per annum.

                                                Thionyl chloride
                                                    in pounds
----------------------------------------------------------------------------------------------------------------
                                                                       1996            1997            1998
----------------------------------------------------------------------------------------------------------------
U.S. production.................................................       8,422,234               0               0
U.S. imports....................................................              66       7,133,669       7,671,084
U.S. exports....................................................               0               0              0*
Apparent U.S. consumption.......................................       8,422,300       7,133,669       7,671,084
----------------------------------------------------------------------------------------------------------------
*A very small amount may be exported to Canada.


                       Effect on customs revenue:

    0.037  $1,564,732 (1998 dutiable value) = $57,895 
per annum.

Future (2000-2002) effect:

    The yearly rate of thionyl chloride use is forecasted for 
this time period to be relatively constant.

Annual imports:

    Are expected to range between 7 and 8 million pounds over 
the period 2000-2002.

                             Bill language:

    ``Subchapter II of Chapter 99 of the Harmonized Tariff 
Schedule of the United States is amended by inserting in 
numerical sequence the following new heading:

[GRAPHIC] [TIFF OMITTED] T0253.002

      

                                


H.R. 2152

    To suspend temporarily the duty on TEOF (triethyl 
orthoformate).

                         No comments submitted.

      

                                

H.R. 2153

    To suspend temporarily the duty on PHBA (p-hydroxybenzoic 
acid).

                         No comments submitted.

      

                                


H.R. 2154

    To suspend temporarily the duty on myristic acid 
(tetrabecanoic acid).

                         No comments submitted.

      

                                


H.R. 2155

    To suspend temporarily the duty on THQ (Toluhydroquinone).

                         No comments submitted.

      

                                


H.R. 2160

    To suspend temporarily the duty on a certain chemical 
compounds.

                         No comments submitted.

      

                                


H.R. 2165

    To suspend temporarily the duty on certain compound optical 
microscopes.

                         No comments submitted.

      

                                


H.R. 2167

    To suspend temporarily the duty on parts of certain 
magnetrons.

                         No comments submitted.

      

                                


H.R. 2168

    To temporarily reduce the duty on certain cathode-ray 
tubes.

                         No comments submitted.

      

                                


H.R. 2169

    To temporarily suspend the duty on certain cathode-ray 
tubes.

                         No comments submitted.

      

                                


H.R. 2176

    To amend the Harmonized Tariff Schedule of the United 
States to modify the tariff treatment of certain categories of 
raw cotton.
      

                                


Statement of American Cotton Shippers Association

    The American Cotton Shippers Association supports the 
enactment of HR 2176 and urges the Subcommittee to favorably 
report the legislation to enable the US textile industry to 
have access to duty-free imports of raw cotton of staple 
lengths measuring less than 11/4 inch when US cotton production 
does not provide adequate supplies of such fiber.

                            Interest of ACSA

    ACSA was founded in 1924 to provide a united voice for the 
cotton merchandising trade of the United States and is composed 
of primary buyers, mill service agents, merchants, shippers, 
exporters, and importers of raw cotton who are members of four 
federated associations located in sixteen states throughout the 
cotton belt:

        Atlantic Cotton Association (AL, FL, GA, NC, SC, & VA)
        Southern Cotton Association (AR, LA, MS, MO, & TN)
        Texas Cotton Association (OK & TX)
        Western Cotton Shippers Association (AZ, CA, & NM)

    ACSA's 162 active member firms handle over 80% of the U.S. 
cotton sold in domestic and export markets and are the 
importers of record for virtually all of the raw upland cotton 
imported into the United States under WTO, NAFTA, and the quota 
allocations triggered by the Federal Agriculture Improvement & 
Reform Act of 1996.

     Need For The Tariff Change & Its Minimal Tariff Revenue Costs

    When the Smoot-Hawley Tariff Act was enacted by Congress in 
1930 duty free status was granted to cotton measuring less than 
1\1/8\ inch since these cottons were the most commonly used 
staple length processed by US textile mills. In the ensuing 69 
years improved seed varieties, cultivation practices, and 
harvesting methods resulted in the production of longer staple 
lengths of cotton. Further, the technological improvements in 
the textile spinning process require the use of cotton longer 
than 1\1/8\ inch. There is minimal use for cotton measuring 
less than 1\1/8\ inch and little of it is produced. US tariff 
policy should not be an impediment to the importation of raw 
upland cotton when US textile mills need the requisite foreign 
supplies whenever crop conditions prevent the production of 
such cotton in the US. Therefore, duty free status should be 
accorded to upland cotton quota imports measuring less than 
1\1/4\ inch. According to National Cotton Council statistical 
data, this change will have a minimal impact on tariff revenue. 
Were the change in effect these past ten years, the estimated 
reduction would range from a high of only $195,400 in 1995 to a 
low of $5,000 in 1992 with a yearly average of $60,830.
      

                                


Statement of American Textile Manufacturers Institute

    The American Textile Manufacturers Institute (ATMI) 
supports enactment of H.R. 2176 that would, in ATMI's opinion, 
improve U.S. trade laws.
    ATMI is the national trade association for the U.S. textile 
industry. Member companies operate in more than 30 states and 
process nearly 75 percent of all fibers, both natural and 
synthetic, consumed by textile plants in the United States. The 
industry employs nearly 600,000 people.
    Today America's textiles is a $81 billion a year high-tech 
industry. It is known as the most efficient and productive 
manufacturer of textiles in the world. The industry invests 
some $2.7 billion a year on the best equipment in order to 
compete domestically and globally.
    Americans each year consume 1.2 billion pairs of trousers, 
3.2 billion shirts and blouses, 300 million sweaters and 16 
billion square yards of textiles in the form of sheets, towels, 
draperies, carpet, upholstery, industrial and automotive 
fabrics. Cotton is the fiber of choice in most of these 
products, either by itself or in blend with other natural and/
or synthetic fibers. ATMI members annually consume upwards of 
11 million bales or raw cotton to meet customer demands and 
consumer needs. In fact, the U.S. textile industry is one of 
the largest consumers of raw cotton in the world.
    By far, most raw cotton consumption in U.S. textile mills, 
year-in and year-out, is domestically grown. Current 
agriculture law, however, does recognize that U.S. textile 
mills, to remain globally competitive, must have constant 
access to an adequate supply and variety of raw cotton at 
competitive prices. To assure this, mills have been permitted 
since 1930 to import limited quantities of raw cotton, under 
very specific circumstances and restrictions.
    It was in 1930 that the United States first imposed tariffs 
on certain categories of raw cotton based on varying staple 
lengths of the cotton. At that time, the predominant staple 
length utilized in textile mills was below 1 1/8 inch. Since 
then, staple lengths have tended to increase for several 
reasons--most notable are improved seed varieties, cultivation 
practices and harvesting methods. In addition, technological 
enhancements in textile processing today require the longer 
cotton staple lengths. Taken together, these changes have had 
the effect of moving the majority of cotton that would be 
imported today, into the United States, from a category without 
a tariff to a category with a tariff.
    In February of this year, the combined U.S. textile 
industry, through ATMI, and U.S. cotton industry, through the 
National Cotton Council, jointly acknowledged this situation. 
An industry-wide consensus resolution was adopted that seeks to 
remove the applicable tariff from raw cotton with a staple 
length common to today's production and cotton utilization 
practices. Specifically, the proposed change would eliminate 
the current tariff of 4.4 cents per kg. on upland cotton with a 
staple length of 1\1/8\ inch to less than 1\1/4\ inch. Such 
action would serve to remove an impediment to the importation 
of upland cotton, on those infrequent but critical occasions 
when U.S. cotton textile manufacturing firms require non-U.S. 
sources to supplement their U.S.-grown cotton.
    Subsequently, legislation was introduced that achieves the 
above-described objective. ATMI supports passage of H.R. 2176 
and urges the Subcommittee on Trade to favorably report the 
legislation.
      

                                


Statement of National Cotton Council of America, Memphis, Tennessee

    The National Cotton Council supports enactment of HR 2176 
for the purpose of removing existing general tariffs on imports 
of cotton with a staple length less than 1\1/4\ inch.
    The National Cotton Council is the central organization of 
the United States cotton industry. Its members include 
producers, ginners, oilseed crushers, merchants, cooperatives, 
warehousemen, and textile manufacturers. While a majority of 
the industry is concentrated in 17 cotton producing states, 
stretching from the Carolinas to California, the downstream 
manufacturers of cotton apparel and home furnishings are 
located in virtually every state.
    The industry and its suppliers, together with the cotton 
product manufacturers, account for one job of every thirteen in 
the U.S. Annual cotton production is valued at more than $5 
billion at the farm gate. In addition to the fiber, cottonseed 
products are used for livestock feed, and cottonseed oil is 
used for food products ranging from margarine to salad 
dressing. While cotton's farm gate value is significant, a more 
meaningful measure of cotton's value to the U.S. economy is its 
retail value. Taken collectively, the business revenue 
generated by cotton and its products in the U.S. economy is 
estimated to be in excess of $50 billion annually. Cotton 
stands above all other crop in its creation of jobs and its 
contribution to the U.S. economy.
    During our annual meeting this past February, our delegates 
adopted a resolution calling for the elimination of general 
tariffs with respect to cotton below 1\1/4\ inch in staple 
length. That resolution reads as follows:

          Recognizing that, in 1930, when import restrictions were 
        established to protect U.S. cotton producers, the predominant 
        staple lengths produced and utilized by domestic mills were 
        below 1\1/8\ inch, and that production and utilization trends 
        have changed significantly, therefore, to assure adequate 
        supplies of competitively priced cotton whenever U.S. 
        production, price levels or trade agreements authorize imports, 
        that tariffs be imposed only with respect to cotton 1\1/4\ inch 
        and longer;

    It is our understanding that the purpose of HR 2176 is to 
eliminate the general rate of tariff applicable to cotton with 
a staple length of 1\1/8\ inches to less than 1\1/4\ inches. 
The National Cotton Council supports this change with the 
understanding that there is no intent to alter the application 
of any existing quotas on any staple length of cotton.

                               Background

    Certain categories of raw cotton imported into the United 
States are subject to a tariff. These tariffs were established 
based on varying staple lengths of cotton. Over time, staple 
lengths have tended to increase, moving the majority of cotton 
that would be imported into the U.S. from a category without a 
tariff into a category with a tariff.
    On top of this, importers are not always certain of the 
staple length of the cotton they are importing. It often may be 
slightly longer than advertised, subjecting the importer to a 
tariff that was not anticipated. There are also serious 
concerns about the manner in which Customs has chosen to 
enforce the tariff line. (unfair sampling procedures, etc.)
    The NCC supports legislation that would remove the 
applicable general tariff from cotton with a staple length that 
is less than 1\1/4\ inch.

                                Proposal
------------------------------------------------------------------------
                                   Current General
         Staple Length                  Tariff          Proposed Change
------------------------------------------------------------------------
less than 1\1/8\ inches........  none...............  no change
1\1/8\ inches to less than 1\1/  4.4 cents per kg     eliminate tariff
 4\ inches.                       (about 2.2 cents
                                  per lb.).
1\1/4\ inches to less than 1\1/  4.4 cents per kg     no change
 8\ inches.                       (about 2.2 cents
                                  per lb.).
1\3/8\ and over................  1.5 cents per kg     no change
                                  (about .69 cents).
------------------------------------------------------------------------

    The complicating factor, with respect to any amendment, is 
that TSUS line numbers 5201.00.22 and 5201.00.34 include cotton 
from 1\1/4\ staple length to less than 1\3/8\ staple length. In 
order to accomplish the goal of the proposal, TSUS lines 
5201.00.22 and 5201.00.34 will both need to be split into two 
categories with staple lengths of \1/8\ to less than 1\1/4\ and 
1\1/4\ to less than 1\3/8\.

                             Estimated Cost

    An analysis of the cost of this proposed change in tariff 
treatment is attached.

                               Conclusion

    It is the sole intent of the National Cotton Council that 
the general tariff currently applicable to upland cotton with a 
staple length of 1\1/8\ inches to less than 1\1/4\ inches be 
removed. Removing this tariff should liberalize trade in 
cotton.
      

                                


Tariff Revenue Impact of Allowing Duty-Free Imports of Raw Cotton of 
Certain Staple Lengths

    Under the 1999 Harmonized Tariff Schedule of the United 
States, imported raw cotton of a staple length of at least 
28.575 mm (1\1/8\ inches) but less than 34.925 mm (1\3/8\ 
inches) is subject to an in-quota tariff of 4.4 cents/kg 
(Chapter 52, Subheading 5201.00.22 and Subheading 5201.00.34. 
The proposed legislation would set the in-quota tariff equal to 
zero for cotton with a staple length of at least 28.575 mm 
(1\1/8\ inches), but less than 31.75 mm (1\1/4\ inches). The 
duty on cotton with a staple length of 31.75 mm to 34.925 mm 
would be unchanged. Concern has been raised about the magnitude 
of the potential loss in tariff revenue resulting from duty-
free importation of the specified cotton.
    Analysis conducted by Economic Services of the National 
Cotton Council indicates that the loss in tariff revenue would 
be insignificant, amounting to less than $40,000 in a typical 
year and less than $200,000 in a year with significant raw 
cotton imports (see attached exhibit).
     Annual U.S. imports of raw cotton of all staple 
lengths are typically less than 50,000 bales.
    --Imports reach higher levels only when the U.S. cotton 
crop is decimated by adverse environmental conditions, greatly 
reducing the available supply of U.S. cotton. In 1998, a 20 
percent shortfall in production was experienced because of 
adverse weather across all regions of the U.S. cotton belt.
    --Even with a 20 percent shortfall, USDA projects total 
U.S. raw cotton imports in the 1998 marketing year (MY98) \1\ 
of only 400,000 bales.
---------------------------------------------------------------------------
    \1\ The import data are only available on a marketing year basis 
from USDA. The marketing year for cotton extends from August 1 to the 
following July 31.
---------------------------------------------------------------------------
    --For MY99, USDA projects total raw cotton imports of 
50,000 bales. Virtually all of these bales will be imported in 
August and September of 1999. Hence, U.S. raw cotton imports in 
fiscal year 2000 (FY2000) will be essentially nil.
     Cotton with a staple length between 28.575 mm and 
31.75 mm, the category affected by the proposed legislative 
change, comprises only a small proportion of total U.S. raw 
cotton imports in any given year.
    --Officials with the U.S. Customs Service indicate that no 
more than five percent of the cotton imported into the United 
States thus far in MY98 has a staple length between 28.575 mm 
and 34.925 mm, a result consistent across years. The proposed 
legislative change affects only a subset of these imports, 
those bales with staple lengths between 28.575 mm and 31.75 mm.
    --For lack of available data, we will assume that all bales 
between 28.575 mm and 34.925 mm are subject to the tariff 
change. If total imports reach 400,000 bales by the end of MY98 
as projected by USDA, cotton in the affected category would 
constitute only about 20,000 bales of the total.
    --With a duty of 4.4/kg, the maximum tariff revenue 
generated from these 20,000 bales would be approximately 
$192,000, also representing the maximum loss in revenue as a 
result of the proposed legislative change to the Harmonized 
Tariff Schedule.
    --We should also note that cotton with a staple length less 
than 28.575 mm, which accounts for at least 75 percent of the 
total U.S. raw cotton imports according to Customs officials, 
already enters the United States duty-free.
    We understand that one estimate has placed the presumptive 
loss in tariff revenue from allowing duty-free importation of 
cotton between 28.575 mm and 31.75 mm to be approximately $32 
million. We are uncertain, however, if this represents the 
estimated annual loss in tariff revenue or the cumulative loss 
over a period of years.
    If we assume that this figure represents the estimated 
cumulative loss over a 5-year period, the implied annual loss 
in tariff revenue is $6.4 million.
     To generate $6.4 million in tariff revenue with an 
in-quota tariff of 4.4 cents/kg, annual imports of raw cotton 
in the affected category would have to be approximately 670,000 
bales, for a total of 3.35 million bales over the 5-year 
period.
     Cumulative U.S. raw cotton imports of all staple 
lengths since 1970 are just 1.8 million bales (inclusive of 
projected imports in 1998).
    --If every one of these 1.8 million bales had been subject 
to a 4.4 cents/kg duty, the total tariff revenue generated 
since 1970 would only be about $17 million.
    --As discussed above, only about five percent of the bales 
imported in any given year have a staple length between 28.575 
mm and 31.75 mm. Thus, of total raw cotton imports of 1.8 
million bales since 1970, less than 100,000 fall into this 
particular staple length category. The estimated tariff revenue 
generated on these bales since 1970, a period of 29 years, is 
less than $900,000 assuming a duty of 4.4 cents/kg.

Prepared by Economic Services of the National Cotton Council
      

                                

[GRAPHIC] [TIFF OMITTED] T0253.003

      

                                


Statement of Hon. William M. Thomas, a Representative in Congress from 
the State of California

    I urge passage of H.R. 2176 to both liberalize and simplify 
trade in cotton fiber. The bill updates our tariff schedules by 
changing the length of cotton fiber at which tariffs are 
assessed from 1 and 1/8ths inches to a length of 1 and 1/4th 
inches. This proposal has the strong support of the cotton 
industry and is noncontroversial.
    H.R. 2176 is supported by the cotton industry because the 
trade recognizes today's tariff structure no longer reflects 
market realities. When the current tariff threshold for cotton 
was set in 1930, the bulk of the fiber trade occurred in 
lengths below 1 and 1/8ths inches, so most imports of raw 
cotton, if any, were duty free.
    The trade has changed as a result of improved fiber and 
ginning processes to the point where staple lengths have 
generally increased. Because cotton imports occur only when the 
domestic industry is unable to obtain adequate supplies within 
the United States, imposition of tariffs under the current 
standard unnecessarily penalizes the domestic industry when 
U.S. growers cannot satisfy milling requirements.
    Further, increasing the threshold for imposing tariffs to 1 
and 1/4ths inch would simplify the process of importing cotton. 
As cotton is often classed by hand overseas, importers buying 
what they believe will be duty-free cotton frequently find 
Customs imposing duties on imports months after the goods have 
entered U.S. commerce. While part of the importers' 
difficulties arises from the differing results from mechanical 
classing methods used in the United States and hand classing, 
there have also been disputes over the means by which Customs 
applies classing results in finally determining whether cotton 
imports are subject to duties. Raising the threshold for tariff 
application would resolve many of these problems.
    H.R. 2176 has the approval of the entire cotton industry. 
The National Cotton Council, which represents cotton growers, 
ginners, shippers, millers and textile manufacturers, is 
endorsing the bill. The American Cotton Shippers Association 
and the American Textiles Manufacturers Institute also support 
H.R. 2176.
    Passing H.R. 2176 makes sense for both industry and for 
government. Given the improvements it would make in trading 
cotton and its strong endorsement by the trade, Congress should 
approve the bill as soon as possible.
      

                                


H.R. 2186

    To suspend temporarily the duty on Rhinovirus drugs.

                         No comments submitted.

      

                                


H.R. 2191

    To require that jewelry imported from another country be 
indelibly marked with the country of origin.

                         No comments submitted.

      

                                


H.R. 2192

    To require that jewelry boxes imported from another country 
be indelibly marked with the country of origin.

                         No comments submitted.

      

                                


H.R. 2194

    To suspend temporarily the duty on Butralin.

                 see JBC International under H.R. 1963

      

                                


H.R. 2196

    To suspend temporarily the duty on slide fasteners, with 
chain scoops of base metal die-cast onto strips of textal 
material.
      

                                


             American Apparel Manufacturers Association    
                                        Arlington, VA 22201
                                                  22 September 1999

Mr. A. L. Singleton
Chief of Staff
Committee on Ways and Means
US House of Representatives
Washington, DC 20515

REF: TR-15 (August 12, 1999)

    Dear Mr. Singleton:

    On behalf of the American Apparel Manufacturers Association 
(AAMA)--the national trade association of the US apparel industry and 
its suppliers--I am writing to express strong support for three of the 
measures that were listed as candidates for the miscellaneous duty 
suspension package.

  HR 2196/HR 2197 Legislation to Eliminate Duties on Certain Polished 
                       Tooth and Die Cast Zippers

    Metal zippers (found in HTS 9607.11.00) are currently 
charged a duty of 10 percent.\1\ Although there is domestic 
production of some metal zippers, there are several kinds of 
metal zippers--die cast (formed by pouring liquid metal into a 
mold directly on the tape) or polished edge (regular teeth 
polished to remove sharp edges)--that are not available 
domestically. The quality and ascetic look of these die cast or 
polished edge zippers are such that they are not substitutes 
for regular metal zippers. Unfortunately, the HTS does not draw 
a distinction between these and regular metal zippers. As a 
result, although there is no domestic production, these zippers 
are taxed at the full 10 percent duty rate.
---------------------------------------------------------------------------
    \1\ From the period 1995 to 1998, the duty on metal zippers dropped 
from 14 percent to 10 percent.
---------------------------------------------------------------------------
    In 1998, about $9.6 million worth of metal zippers under 
HTS 9607.11.00 were imported into the United States. Less than 
22 percent of these zippers were imported from Japan, 
Switzerland, and Italy--the only three countries that are the 
source of polished edge or die cast metal zippers. As a result, 
removing the duty on these zippers would result in no more than 
a duty loss of $211,000.\2\ In fact, because not every zipper 
import from these three countries is polished edge or die cast, 
the duty loss would actually be much smaller. This savings, 
however, is significant for the small companies who have to pay 
the duties.
---------------------------------------------------------------------------
    \2\ $9.6 million times 22 percent times 10 percent.
---------------------------------------------------------------------------
    We believe this proposal is not controversial since the 
zippers subject to the duty suspension are not manufactured 
domestically. Moreover, about 25 percent of metal zippers 
imported into the United States are already imported duty free 
(because they are imported under the GSP program or from 
countries--such as Mexico--with whom the United States has 
suspended duties on this product).

HR 1360 Legislation to Correct a Tariff Inversion on High End Imported 
                                  Wool

    Correcting the inversion on high end imported wool is 
urgently needed to address an anomaly that is swiftly eroding 
the manufacturing and employment base in a significant part of 
our industry. Currently, the tariff on higher end wool imports 
is 31.7 percent. Yet the duty on the suits that are 
manufactured with that wool is only 20.2 percent (expected to 
drop to 17.5 percent by 2004). As a result, it is cheaper to 
import a finished wool suit than it is to import the raw 
material and make that same wool suit here in the United 
States. The losers in this equation are the suit makers and 
their employees.
    The situation is exacerbated when we incorporate Canada and 
Mexico into the mix. Because of the NAFTA, imported suits from 
those countries face no duty (in the case of Canada) and an 11 
percent duty (in the case of Mexico). Moreover, Canada imposes 
no tariff on its own imports of high-end wool fabric. As a 
result, Canadian firms can import fine wool fabric, manufacture 
suits, and ship them to the United States--all without 
encountering any duty. This means Canadian suits effectively 
enjoy a 31.7 percent preference over US suits in the US market. 
Again, the big losers are US suit-makers and their employees.
    We applaud the measured and thoughtful response of this 
proposal that is now before the House. Its multi-tiered 
approach balances the needs of the domestic industry while 
achieving the elements of a rational trade policy. The proposal 
would provide for the elimination in the duty on Super 90's and 
above grade wool. Because these high-grade wool fabrics are not 
made in sufficient commercial quantities, diversity, and style 
in the United States, the tariff elimination should pose no 
particular hardship. The proposal is structured differently for 
the segment of the domestic wool industry that engages in the 
production of Super 70's and 80's grade wool fabric. In these 
cases, the duty rate is temporarily reduced from 31.7 percent 
to the 21.2 percent rate assessed on suits. The proposal makes 
no changes to the tariff structure affecting the lower grade 
wool fabrics or raw wool, which accounts for most US 
production. That rate--between 7 and 7.8 percent--remains 
unchanged.
    We would prefer to source all our wool fabrics 
domestically. Unfortunately, the combination of inadequate 
domestic supplies, the tariff break accorded Canada under the 
NAFTA, and the inverted duties penalizing our own companies 
make this impossible. Over the past five years we have learned 
that there are no legal remedies to fix the Canada problem and 
that the domestic wool industry is not capable of fixing the 
wool fabric availability problem. The only solution--if we are 
to retain a domestic suit making capability and its workers--is 
to fix the inverted duty on fancy wool fabric duty NOW.
    As a whole, the proposal eliminates the offensive duty 
inversion--and the incentive to import instead of manufacture 
domestically--while retaining a measured level of protection 
for the various elements of the domestic wool industry. The 
approach is entirely consistent with our trade policy, which 
encourages a competitive domestic manufacturing base in the 
context of a liberal trading environment. When fully 
implemented, the fix should benefit needletrade workers, 
apparel manufacturers, and consumers.
    Thank you for providing me this opportunity to comment on these 
important measures.

            Sincerely,
                                              Stephen Lamar
                                     Director, Government Relations
      

                                


H.R. 2197

    To suspend temporarily the duty on slide fasteners fitted 
with polished edge chain scoops of base metal.

     see American Apparel Manufacturers Association under H.R. 2196

      

                                


H.R. 2198

    To suspend temporarily the duty on branched dodecylbenzene.
      

                                


                                   CK Witco Corporation    
                                        Greenwich, CT 06749
                                                 September 15, 1999

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: Submission of Written Comments Supporting H. R. 2198

    Dear Mr. Singleton:

    Pursuant to the Advisory dated August 12, 1999 concerning 
miscellaneous duty suspension proposals, we are writing to express our 
full support of H. R. 2198, providing for the temporary duty suspension 
on imports of branched dodecylbenzene (DDB).
    CK Witco is the largest domestic consumer of branched DDB, which we 
use in the production of a number of products we sell in the domestic 
market. There is no U. S. producer of this product, nor is there any 
domestically produced alternative product to meet our production 
requirements. As the largest domestic importer and user of DDB, we are 
most interested in seeing the current U. S. duty applied to imports of 
this product temporarily suspended. We also believe that the other 
importers of DDB are equally supportive of H. R. 2198.
    It should also be noted that the U. S. duty for DDB, and the other 
products classified under 2902.90.30 of the Harmonized Tariff Schedules 
of the U. S., will be permanently reduced to zero by 2004 under the 
phase down from the previous Uruguay Round agreements.
    Since there is no U. S. production of the type of branched DDB we 
import, there should be no objection to H. R. 2198. Please let the 
record reflect our full support of H. R. 2198.
    These comments are provided in the required 6 copies and on a 3.5-
inch diskette as requested. There are no exhibits or other attachments 
to our statement.

            Sincerely,
                                         Vincent A. Calarco
                              President and Chief Executive Officer
      

                                


H.R. 2207

    To suspend temporarily the duty on a certain fluorinated 
compound.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2207, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on a certain fluorinated compound, 
classified under 2914.70.40 of the Harmonized Tariff Schedule 
of the United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2207, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

                Description of the Product and Its Uses 

    The compound addressed in this legislation is used in the 
preparation of a proprietary polymer.

  Suspending the Duty on the Subject Fluorinated Compound is Warranted

    There is no U.S. commercial production of the fluorinated 
compound on which suspension of duty is being sought. Further, 
based on import projections for this product for the period 
covered by H.R. 2207, this legislation also complies with the 
Committee's ``no-cost'' requirement.

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact product in question. This legislation 
also meets the Committee's ``no cost'' criterion. For these 
reasons passage of H.R. 2207, while having a positive impact on 
the competitiveness of AlliedSignal and its U.S. customers, 
would not have a detrimental effect on a U.S. industry. 
Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate.
      

                                


H.R. 2208

    To suspend temporarily the duty on a certain light 
absorbing photo dye.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R 2208, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on a certain light absorbing photo dye, 
classified under 2934.90.90 of the Harmonized Tariff Schedule 
of the United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2208, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

                Description of the Product and Its Uses 

    The particular photo dye addressed in this legislation is 
used in small quantities as a light absorbing dye in certain 
silver halide film emulsions. It is a red dye, used generally 
to absorb light in the green part of the color spectrum.
    Photographic dyes are specifically tailored to meet 
particular customer requirements. This particular dye is 
imported for use in specific proprietary film emulsions.

    Suspending the Duty on the Subject Light Absorbing Photo Dye is 
                               Warranted 

    There is no U.S. commercial production of the light 
absorbing photo dye on which suspension of duty is being 
sought.
    In 1997 the U.S. Government (Office of the U.S. Trade 
Representative and Department of Commerce) compiled a list (so-
called ``zero list'') of chemical products whose U.S. tariffs 
it tried unsuccessfully to use the November 1997 Asia-Pacific 
Economic Cooperation (APEC) Forum ministerial meeting to 
eliminate in exchange for concessions from trading partners. 
AlliedSignal submitted the product subject to H.R. 2208 for 
inclusion on that list. In a chemical industry-wide formal 
review of the proposed ``zero list,'' undertaken at the behest 
of the U.S. government and carried out under the auspices of 
the U.S. Industry Sector Advisory Committee on Chemicals and 
Allied Products for Trade Policy Matters (a.k.a. ISAC-3), no 
one objected to this product's presence on that list, i.e., had 
no objections to its duty being eliminated.
    Further, based on import projections for this product for 
the period covered by H.R. 2208, this legislation complies with 
the Committee's ``no cost'' requirement.

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact product in question. When scrutinized 
thoroughly for possible inclusion on the U.S. government's APEC 
``zero list,'' this product's inclusion on said list did not 
engender any opposition from or controversy among U.S. 
industry. Regrettably, notwithstanding the good intentions and 
tireless efforts of U.S. trade negotiators, it is uncertain if 
and when the APEC, or for that matter the WTO, process will 
yield the desired tariff cut provided for in H.R. 2208.
    This legislation also meets the Committee's ``no cost'' 
criterion.
    For these reasons passage of H.R. 2208, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry. Granting a suspension of the duty on the product 
subject to this legislation is justified and appropriate.
      

                                


H.R. 2209

    To suspend temporarily the duty on filter blue green photo 
dye.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2209, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on filter blue green photo dye, classified 
under 2942.00.10 of the Harmonized Tariff Schedule of the 
United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2209, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

                Description of the Product and Its Uses 

    The photo dye addressed in this legislation is added to 
silver halide photographic film emulsions for the purpose of 
absorbing particular wavelengths of light.
    Photographic dyes are specifically tailored to meet 
particular customer requirements. This photographic dye is 
imported for use in specific proprietary film emulsions.

    Suspending the Duty on Filter Blue Green Photo Dye is Warranted 

    There is no U.S. commercial production of the photo dye on 
which suspension of duty is being sought. Further, based on 
import projections for this product for the period covered by 
H.R. 2209, this legislation also complies with the Committee's 
``no cost'' requirement.

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact product in question. This legislation 
also meets the Committee's ``no cost'' criterion. For these 
reasons passage of H.R. 2209, while having a positive impact on 
the competitiveness of AlliedSignal and its U.S. customers, 
would not have a detrimental effect on a U.S. industry. 
Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate.
      

                                


H.R. 2210

    To suspend temporarily the duty on certain light absorbing 
photo dyes.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2210, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on certain light absorbing photo dyes, 
classified under 2933.19.90 of the Harmonized Tariff Schedule 
of the United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2210, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

              Description of the Products and Their Uses 

    The particular dyes addressed in this legislation are added 
to silver halide photographic film emulsions for the purpose of 
absorbing particular wavelengths of light.
    Photographic dyes are specifically tailored to meet 
particular customer requirements. The photographic dyes 
addressed in this legislation are imported for use in specific 
proprietary film emulsions.

   Suspending the Duty on the Subject Light Absorbing Photo Dyes is 
                               Warranted 

    There is no U.S. commercial production of the light 
absorbing photo dyes on which suspension of duty is being 
sought.
    In 1997 the U.S. Government (Office of the U.S. Trade 
Representative and Department of Commerce) compiled a list (so-
called ``zero list'') of chemical products whose U.S. tariffs 
it tried unsuccessfully to use the November 1997 Asia-Pacific 
Economic Cooperation (APEC) Forum ministerial meeting to 
eliminate in exchange for concessions from trading partners. 
AlliedSignal submitted five of the six products subject to H.R. 
2210 for inclusion on that list. In a chemical industry-wide 
formal review of the proposed ``zero list,'' undertaken at the 
behest of the U.S. government and carried out under the 
auspices of the U.S. Industry Sector Advisory Committee on 
Chemicals and Allied Products for Trade Policy Matters (a.k.a. 
ISAC-3), no one objected to these products' presence on that 
list, i.e., had no objections to their duties being eliminated.
    Further, based on import projections for these products for 
the period covered by H.R. 2210, this legislation complies with 
the Committee's ``no cost'' requirement. 

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact products in question. When five out of 
six of these products were scrutinized thoroughly for possible 
inclusion on the U.S. government's APEC ``zero list,'' their 
inclusion on said list did not engender any opposition from or 
controversy among U.S. industry. Regrettably, notwithstanding 
the good intentions and tireless efforts of U.S. trade 
negotiators, it is uncertain if and when the APEC, or for that 
matter the WTO, process will yield the desired tariff cuts 
provided for in H.R. 2210.
    This legislation also meets the Committee's ``no cost'' 
criterion.
    For these reasons passage of H.R. 2210, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry. Granting a suspension of the duty on the products 
subject to this legislation is justified and appropriate.
      

                                


H.R. 2211

    To suspend temporarily the duty on 4,4'-
Difluorobenzophenone.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2211, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on 4,4'-Difluorobenzophenone, classified 
under 2914.70.90 of the Harmonized Tariff Schedule of the 
United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2211, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

                Description of the Product and Its Uses 

    The compound addressed in this legislation is used as a 
monomer in the production of high performance polymers.

     Suspending the Duty on 4,4'-Difluorobenzophenone is Warranted 

    There is no U.S. commercial production of the 4,4'-
Difluorobenzophenone on which suspension of duty is being 
sought.
    In 1997 the U.S. Government (Office of the U.S. Trade 
Representative and Department of Commerce) compiled a list (so-
called ``zero list'') of chemical products whose U.S. tariffs 
it tried unsuccessfully to use the November 1997 Asia-Pacific 
Economic Cooperation (APEC) Forum ministerial meeting to 
eliminate in exchange for concessions from trading partners. 
AlliedSignal submitted the product subject to H.R. 2211 for 
inclusion on that list. In a chemical industry-wide formal 
review of the proposed ``zero list,'' undertaken at the behest 
of the U.S. government and carried out under the auspices of 
the U.S. Industry Sector Advisory Committee on Chemicals and 
Allied Products for Trade Policy Matters (a.k.a. ISAC-3), no 
one objected to this product's presence on that list, i.e., had 
no objections to its duty being eliminated.
    Further, based on import projections for this product for 
the period covered by H.R. 2211, this legislation complies with 
the Committee's ``no cost'' requirement. 

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact product in question. When scrutinized 
thoroughly for possible inclusion on the U.S. government's APEC 
``zero list,'' this product's inclusion on said list did not 
engender any opposition from or controversy among U.S. 
industry. Regrettably, notwithstanding the good intentions and 
tireless efforts of U.S. trade negotiators, it is uncertain if 
and when the APEC, or for that matter the WTO, process will 
yield the desired tariff cut provided for in H.R. 2211.
    This legislation also complies with the Committee's ``no 
cost'' criterion.
    For these reasons passage of H.R. 2211, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry. Granting a suspension of the duty on the product 
subject to this legislation is justified and appropriate.
      

                                


H.R. 2212

    To suspend temporarily the duty on a certain fluorinated 
compound.
      

                                


Statement of AlliedSignal Inc.

    AlliedSignal Inc. appreciates the opportunity to comment on 
H.R. 2212, introduced by Representative J.D. Hayworth of 
Arizona. This measure provides for the temporary suspension of 
the U.S. import duty on a certain fluorinated compound, 
classified under 2914.70.90 of the Harmonized Tariff Schedule 
of the United States (HTSUS).
    Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate. To our knowledge 
there is no U.S. commercial production of the exact product in 
question. For this reason passage of H.R. 2212, while having a 
positive impact on the competitiveness of AlliedSignal and its 
U.S. customers, would not have a detrimental effect on a U.S. 
industry.

                   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 aircraft landing and lighting 
systems. Our automotive product names include Fram 
filters, Autolite sparkplugs, Prestone car 
care products, and Garrett turbochargers for 
passenger cars, light trucks and heavy industrial equipment. We 
also are a leading producer of power generation and management 
systems, nylon and industrial fibers, specialty chemicals, and 
advanced materials for the electronics and electric power 
distribution sectors.
    AlliedSignal employs some 70,400 people worldwide, 
approximately 50,000 of whom are in the United States. The 
company's principal U.S. manufacturing operations are located 
in Arizona, California, Missouri, Maryland, Ohio, Virginia, New 
Jersey, Kansas and South Carolina. It is one of the 30 stocks 
that make up the Dow Jones Industrial Average and is also a 
component of the Standard & Poor's 500 Index. AlliedSignal was 
named the ``best diversified company'' by Forbes Global 
magazine; the ``most admired'' aerospace company by Fortune 
magazine, both globally and in the United States; and one of 
the ``100 best companies to work for'' by Fortune.

                Description of the Product and Its Uses 

    The compound addressed in this legislation is used in the 
preparation of a proprietary polymer.

  Suspending the Duty on the Subject Fluorinated Compound is Warranted

    There is no U.S. commercial production of the fluorinated 
compound on which suspension of duty is being sought. Further, 
based on import projections for this product for the period 
covered by H.R. 2212, this legislation also complies with the 
Committee's ``no cost'' requirement.

                                Summary 

    To AlliedSignal's knowledge there is no U.S. commercial 
production of the exact product in question. This legislation 
also meets the Committee's ``no cost'' criterion. For these 
reasons passage of H.R. 2212, while having a positive impact on 
the competitiveness of AlliedSignal and its U.S. customers, 
would not have a detrimental effect on a U.S. industry. 
Granting a suspension of the duty on the product subject to 
this legislation is justified and appropriate.
      

                                


H.R. 2213

    To allow an exception from making formal entry for a vessel 
required to anchor at Belle Isle Anchorage, Port of Detroit, 
Michigan, while awaiting the availability of cargo or for the 
purpose of taking on a pilot or awaiting pilot services, prior 
to proceeding to the Port of Toledo, Ohio.

                         No comments submitted.

      

                                


H.R. 2214

    To suspend temporarily the duty on the chemical DiTMP.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2214-DiTrimethylolpropane 
        Made Pursuant to Ways & Means Committee Advisory No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2214 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for di-
trimethylolpropane (``DiTMP'') provided for in subheading 2905.49.10, 
HTSUS.
    The duty suspension for DiTMP will result in a de minimis reduction 
of revenue of less than $60,000, as estimated for 1999. DiTMP is 
imported from Sweden by Perstorp, Toledo, Ohio, which has approximately 
90 employees. The product is not sold by Perstorp for export. DiTMP is 
sold to customers in the United States to be used primarily to make 
acrylate monomers, which are used in turn to make ultraviolet-light-
cured inks and coatings. DiTMP is an important product to the 
manufacturing operations of these customers in the United States. There 
are no known domestic manufacturers of DiTMP which would provide a 
product that could be directly or readily substituted for DiTMP. Thus, 
these customers in the United States rely upon a consistent supply of 
DiTMP from Perstorp to furnish the necessary raw materials for their 
manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2215

    To suspend temporarily the duty on the chemical EBP.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2215-2-Ethyl-2-Butyl-1,3-
        Propanediol Made Pursuant to Ways & Means Committee Advisory 
        No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2215 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for 2-ethyl-2-butyl-1,3-
propanediol (``EBP'') provided for in subheading 2905.39.90, HTSUS.
    The duty suspension for EBP will result in a de minimis reduction 
of revenue of less than $8,000, as estimated for 1999. EBP is imported 
from Sweden by Perstorp, Toledo, Ohio, which has approximately 90 
employees. The product is not sold by Perstorp for export. EBP is sold 
to customers in the United States to be used primarily as a component 
of architectural and industrial coatings (paints). EBP is an important 
product to the manufacturing operations of these customers in the 
United States. There are no known domestic manufacturers of EBP which 
would provide a product that could be directly or readily substituted 
for EBP. Thus, these customers in the United States rely upon a 
consistent supply of EBP from Perstorp to furnish the necessary raw 
materials for their manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2216

    To suspend temporarily the duty on the chemical HPA.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2216--Hydroxypivalic Acid 
        Made Pursuant to Ways & Means Committee Advisory No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2216 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for hydroxypivalic acid 
(``HPA'') provided for in subheading 2918.19.90, HTSUS.
    The duty suspension for HPA will result in a de minimis reduction 
of revenue of less than $5,000, as estimated for 1999. HPA is imported 
from Sweden by Perstorp, Toledo, Ohio, which has approximately 90 
employees. The product is not sold by Perstorp for export. HPA is sold 
to customers in the United States to be used primarily in high-
performance automotive coatings. HPA is an important product to the 
manufacturing operations of these customers in the United States. There 
are no known domestic manufacturers of HPA which would provide a 
product that could be directly or readily substituted for HPA. Thus, 
these customers in the United States rely upon a consistent supply of 
HPA from Perstorp to furnish the necessary raw materials for their 
manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2217

    To suspend temporarily the duty on the chemical APE.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2217--Allyl Pentaerythritol 
        Made Pursuant to Ways & Means Committee Advisory No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2217 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for allyl 
pentaerythritol (``APE'') provided for in subheading 2909.49.60, HTSUS.
    The duty suspension for APE will result in a de minimis reduction 
of revenue of less than $60,000, as estimated for 1999. APE is imported 
from Sweden by Perstorp, Toledo, Ohio, which has approximately 90 
employees. The product is not sold by Perstorp for export. APE is sold 
to customers in the United States to be used primarily as a component 
in adhesives, sealants, toothpastes and pharmaceuticals. APE is an 
important product to the manufacturing operations of these customers in 
the United States. There are no known domestic manufacturers of APE 
which would provide a product that could be directly or readily 
substituted for APE. Thus, these customers in the United States rely 
upon a consistent supply of APE from Perstorp to furnish the necessary 
raw materials for their manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2218

    To suspend temporarily the duty on the chemical TMPDE.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2218--Trimethylolpropane 
        Diallyl Ether Made Pursuant to Ways & Means Committee Advisory 
        No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2218 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for trimethylolpropane 
diallyl ether (``TMPDE'') provided for in subheading 2909.49.60, HTSUS.
    The duty suspension for TMPDE will result in a de minimis reduction 
of revenue of less than $60,000, as estimated for 1999. TMPDE is 
imported from Sweden by Perstorp, Toledo, Ohio, which has approximately 
90 employees. The product is not sold by Perstorp for export. TMPDE is 
sold to customers in the United States to be used primarily in molded 
polyesters and polyester coatings. TMPDE is an important product to the 
manufacturing operations of these customers in the United States. There 
are no known domestic manufacturers of TMPDE which would provide a 
product that could be directly or readily substituted for TMPDE. Thus, 
these customers in the United States rely upon a consistent supply of 
TMPDE from Perstorp to furnish the necessary raw materials for their 
manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2219

    To suspend temporarily the duty on the chemical TMPME.
      

                                


                                     Perstorp Polyols, Inc.
                                               Toledo, Ohio
                                                 September 22, 1999

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: Comments on Duty Suspension Bill H.R. 2219--Trimethylolpropane 
        Monoallyl Ether Made Pursuant to Ways & Means Committee 
        Advisory No. TR-15

    Dear Mr. Singleton:

    This statement is made on behalf of Perstorp Polyols, Inc. 
(``Perstorp'') in support of H.R. 2219 which would amend subchapter II 
of chapter 99 of the Harmonized Tariff Schedule of the United States 
(``HTSUS'') to provide for the duty suspension for trimethylolpropane 
monoallyl ether (``TMPME'') provided for in subheading 2909.49.60, 
HTSUS.
    The duty suspension for TMPME will result in a de minimis reduction 
of revenue of less than $5,000, as estimated for 1999. TMPME is 
imported from Sweden by Perstorp, Toledo, Ohio, which has approximately 
90 employees. The product is not sold by Perstorp for export. TMPME is 
sold to customers in the United States to be used primarily in molded 
polyesters and polyester coatings. TMPME is an important product to the 
manufacturing operations of these customers in the United States. There 
are no known domestic manufacturers of TMPME which would provide a 
product that could be directly or readily substituted for TMPME. Thus, 
these customers in the United States rely upon a consistent supply of 
TMPME from Perstorp to furnish the necessary raw materials for their 
manufacturing operations.
    We would be glad to provide any further information that the 
Subcommittee would require for its analysis. Thank you.

            Sincerely,
                                           Evelyn M. Suarez

EMS/llp
CC: Aim Jonnard, USITC
Robert Randall, USITC
Michael Kelly, Department of Commerce
      

                                


H.R. 2220

    To suspend temporarily the duty on tungsten concentrates.
      

                                


                              U.S. House of Representatives
                                                 September 14, 1999

Chairman Philip Crane
Subcommittee on Trade
Committee on Ways and Means
1104 Longworth HOB
Washington, D.C. 20515

Re: H.R. 2220

    Dear Chairman Crane:

    I write today to request that you consider legislation known as 
H.R. 2220 that I introduced on June 15, 1999, to temporarily suspend 
the duty on tungsten concentrates, for the second round of 
Miscellaneous Trade and Tariff Measures in the 106th Congress.
    As you know, Mr. Chairman, I represent California's 40th 
Congressional District. In my District, in a town called Pine Creek, 
near Bishop, there is a tungsten milling operation owned by Avocet. The 
mill was built in conjunction with a mine in the 1930's and commenced 
tungsten production during the First World War. Since 1990, however, 
the mine has been limited to ``care and maintenance'' and has not 
actually produced tungsten. In 1995, Avocet purchased the mill and a 
50% interest in the mine from Strategic Minerals Corporation. With 
tungsten ore and concentrate disposals from the Defense National 
Stockpile limiting any price increase, tungsten mining in California is 
unlikely to start up again in the foreseeable future
    In addition to its California mill and mine, Avocet operates a 
tungsten mine in Portugal and owns interests in mines in Peru and 
Russia. Like the Pine Creek mine, the Peruvian mine is on care and 
maintenance and will not commercially operate until the market 
improves. Concentrates from Portugal that are processed in Bishop are 
subject to the current tungsten duty. If H.R. 2220 is enacted, Avocet 
could use additional Portuguese material, which it could blend with 
material purchased from other sources, such as the Defense National 
Stockpile, or with ores from the Pine Creek mine. Suspension of the 
current duty is critical to the continued operation of the Pine Creek 
mill.
    Mr. Chairman, it is my understanding that the duties received over 
the last five years under this tariff on tungsten did not in any single 
year exceed $500,000.00. The United States International Trade 
Commission reports total duties received in 1998, the last year with 
complete figures, totaled $17,337.40. As a result, this request should 
score as ``uncontroversial'' by the standards of the Ways and Means 
Subcommittee on Trade.
    Furthermore, concentrates imported by Avocet's U.S. competitors 
from the former Soviet Union and Bolivia are allowed into the United 
States with zero duty. Concentrates sold from the Defense National 
Stockpile are also not subject to an import duty. I believe that a duty 
suspension will improve the economies of the Pine Creek mill operation 
mostly from the increased utilization of high-grade concentrates from 
Avocet's Portuguese mine. Improved economies of tungsten processing 
will support the existing jobs at the Pine Creek mill and could lead to 
new hiring as market prices stabilize.
    Mr. Chairman, thank you both for considering H.R. 2220 and giving 
me the opportunity to submit my comments for the record. Please feel 
free to contact me with any questions.

            Sincerely,
                                                Jerry Lewis
                                                 Member of Congress

JL:ah
      

                                


                                    OSRAM SYLVANIA INC.    
                                          Towanda, PA 18848
                                                 September 23, 1999

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

    Dear Mr. Singleton:

    As the largest U.S. consumer of tungsten ore concentrates, OSRAM 
SYLVANIA INC. is in full support of H.R. 2220, the bill to temporarily 
suspend the import duty on tungsten ore concentrates (HTS code 
2611.00.60) and requests the bill's inclusion as part of any 
Miscellaneous Trade and Tariff Measures introduced to the 106th 
Congress. The current ad valorem import duty ($0.37 cents/kilogram) 
unfairly penalizes tungsten concentrates from non-GSP countries and 
makes it more costly for OSRAM SYLVANIA INC. to source critical 
tungsten raw materials. Given the limited active mining of tungsten 
outside of China, it is imperative that U.S. manufacturers have access 
to all tungsten ore concentrates on a duty free basis in order to 
compete with foreign manufacturers.
    OSRAM SYLVANIA INC. employs over 12,000 employees in 29 states. Our 
Chemical & Metallurgical Products facility at Towanda, Pennsylvania 
produces tungsten chemicals, powders, wire and fabricated parts 
primarily for the lighting, machine tool, automotive and mining 
industries.
    Again, OSRAM SYLVANIA INC. fully supports the legislative proposal 
H.R. 2220 for the suspension of tungsten ore concentrates duties. 
Please feel free to contact me with any questions regarding this 
matter.

            Sincerely,
                                          Robert J. Fillnow
                                 Vice President and General Manager
      

                                


H.R. 2234

    To provide for the reliquidation of certain entries of 
printing cartridges.

                         No comments submitted.

      

                                


H.R. 2256

    To designate the San Antonio International Airport in San 
Antonio, Texas, as an airport at which certain private aircraft 
arriving in the United States from a foreign area may land for 
processing by the Customs Service.

                         No comments submitted.

      

                                


H.R. 2276

    To provide for the liquidation or reliquidation of certain 
entries of antifriction bearings.

                         No comments submitted.

      

                                


H.R. 2290

    To suspend temporarily the duty on the chemical 2 Chloro 
Amino Toluene.

                         No comments submitted.

      

                                


H.R. 2297

    To suspend temporarily the duty on ferroniobium.
      

                                


                         Reference Metals Company, Inc.    
                                      Bridgeville, PA 15017
                                                 September 20, 1999

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

    Dear Mr. Singleton:

    In response to the House Subcommittee on Trade's request for 
written comments from interested parties with regard to H.R. 2297, this 
statement is filed by Dr. Harry Stuart on behalf of Reference Metals 
Company, Inc., 1000 Old Pond Road, Bridgeville, Pennsylvania, 15017-
0217 (hereinafter ``RMCI'').
    RMCI is and has been for years involved in the importation and sale 
of standard grade ferroniobium (ferrocolumbium) which is produced in 
Brazil. Standard grade ferrocolumbium is used by steel companies to add 
toughness and other special qualities to the steel they produce. RMCI 
sells this product to steel companies throughout the United States, 
including Bethlehem Steel and Allegheny Teledyne, both of which are 
headquartered in Pennsylvania.
    As an importer of ferrocolumbium, RMCI strongly endorses the 
passage of H.R. 2297, which would temporarily suspend the 5% tariff on 
ferrocolumbium. Passage of this bill will have a significant positive 
impact upon RMCI and United States domestic steel manufacturers who use 
ferrocolumbium.
    Unfortunately, during the 105th Congress, the International Trade 
Administration (``ITA'') opposed passage of identical legislation known 
as H.R. 3859 and S. 1958. Because we anticipate the ITA and other 
opponents of H.R. 2297 will make similar arguments this year, we would 
like to list the arguments previously posed by ITA and offer our 
response.
    Argument # 1: A duty suspension on ferrocolumbium would be 
controversial.
    The ITA asserts that the proposed duty suspension is controversial 
because two domestic ferrovanadium producers, and two domestic 
producers of vanadium pentoxide, a feed stock for ferrovanadium 
production, are opposed to the adoption of such legislation.
    First, it should be noted that no opposition appears to have been 
voiced by any producers, sellers or users of ferrocolumbium, which is 
the product in question. The opposition has instead been raised by 
companies who deal in ferrovanadium, which is an entirely separate and 
distinct product. And although the Memorandum indicates opposition by 
four entities, only two of them are ferrovanadium producers. The other 
two produce a feed stock for ferrovanadium. And of the four opposers, 
the number is only two in reality, since two of the entities are 
related as parent and subsidiary, and the other two have entered into a 
partnership, pursuant to which one manufactures and supplies all of its 
ferrovanadium to the other, which acts as a reseller.
    Looking at these entities with a critical eye, and considering 
their corporate affiliations and arrangements, the only opposition to 
this bill appears to be from two companies manufacturing a distinct and 
different product in an entirely separate industry. As more fully 
discussed below, their product is not ``directly competitive'' with 
ferrocolumbium.
    Any rational decision with respect to whether legislation is 
``controversial'' must involve a balancing test. Thus, the mere fact 
that someone complains does not make the matter ``controversial.''
    To RMCI's knowledge there has been no opposition filed to this 
trade bill by any ferrocolumbium producer, seller or user. The 
legislation has been enthusiastically supported by the United States 
steel industry, which would be its primary beneficiary. As the American 
Iron and Steel Institute noted in its letter of April 3, 1998 addressed 
to Senator William V. Roth, ``On behalf of the 38 U.S. member companies 
of the American Iron and Steel Institute, who together account for 
roughly two-thirds of the raw steel produced annually in the United 
States, I write in support of ...the miscellaneous tariff bill 
sponsored by Senator Rick Santorum (R-PA), which would provide 
temporary suspension of U.S. duty on Ferroniobium (commonly referred to 
as Ferrocolumbium in North America).''...``Facing an increasingly 
competitive global steel market environment--especially in the wake of 
the Asian economic crisis--U.S. steel producers need a level playing 
field now more than ever. The removal of the current U.S. cost 
disadvantage that results from dutiable Ferroniobium should be entirely 
non-controversial. It will harm no one, while improving the 
competitiveness of U.S. steel companies and their workers.''
    This bill is not controversial.
    Argument # 2: A duty suspension would materially harm the U.S. 
vanadium industry, because ferrocolumbium is a ready substitute for 
ferrovanadium.
    It is true that ferrocolumbium can be substituted for ferrovanadium 
in some instances. Those instances are, however, limited. It is 
absolutely clear that ferrocolumbium is not an across the board 
substitute for ferrovanadium. It is not ``directly competitive.''
    This becomes apparent when the actual uses of ferrocolumbium are 
reviewed.
    Most ferrocolumbium is used for the production of high-strength, 
low-alloy (HSLA) steels. Approximately 72% of all ferrocolumbium goes 
into HSLA steels. The balance is used to make stainless steels, 13%, 
interstitial-free steels, 8%, and other steels, 7%.

                              HSLA Steels

    HSLA steels are further divided between line-pipe, 35%, 
structural applications, 33%, and automotive applications, 32%, 
notes Roskill, The Economics of Niobium, 1998 (8th Ed.). In the 
case of HSLA steels, competition between ferrocolumbium and 
ferrovanadium is very limited because in most cases both 
products are used together. ``HSLA steels usually contain 
manganese, vanadium and niobium, with additions of copper, 
aluminum, chromium, molybdenum and nickel.'' Roskill at p. 118. 
(Emphasis added).

                               Line Pipe

    For example, in large diameter pipes, ferrocolumbium and 
ferrovanadium are used together in API X65 and API X70, and 
ferrovanadium may be added in some API X80, as well. In some 
line pipe, however, vanadium may not be used. But the reason is 
technical, not merely the substitution of columbium for 
vanadium. Low carbon steel is always sought for toughness and 
weldability purposes, and low carbon levels limit the 
usefulness of vanadium as an additive. Where the pipe is used 
in Arctic conditions, vanadium poses problems because 
``vanadium steels in particular are prone to brittle cracking 
at low temperatures.'' Roskill at p. 122.

                           Automotive Steels

    Another principal subset of HSLA steel is automotive 
steels, which account for approximately 30% of the columbium 
usage. In hot rolled sheets for automotive use, columbium is 
traditionally present. Vanadium, with columbium, is used when 
very high yield strength levels are required, and also in 
thicker gauge products. For example, in ASTM A 715-75 steels, 
vanadium is always used, sometimes in conjunction with 
columbium. On the other hand, vanadium predominates in the so 
called dual phase steels used for wheels.
    But again, the decision as to which element to use is 
technologically driven.

                        Structural Applications

    Structural applications include high strength steels used 
for general structures, such as bridges and highrise buildings. 
``Niobium (columbium) steels tend to be used for sections up to 
12.5 mm thick, while vanadium-nitrogen steels are employed for 
thicker sections.'' Roskill at p. 126. Technology controls 
which element is used.

                      High Strength Steel Castings

    HSLA steels are gaining importance as casting materials. 
But again, ferrocolumbium and ferrovanadium do not really 
compete. They co-exist. Such steels have ``typical compositions 
of 0.1% vanadium and niobium....'' Roskill at p. 127. (Emphasis 
added).

                            Reinforcing Bars

    There is competition, at least to some extent, between 
ferrocolumbium and ferrovanadium in the production of rebar. A 
recent trend toward stronger, larger diameter, ductile and 
weldable steel has led rebar producers to look more closely at 
HSLA steels. Either ferrocolumbium or ferrovanadium could be 
used, but practically speaking, twice as much vanadium must be 
used to achieve the same effect. Traditionally, vanadium has 
cost more than columbium. Thus, the use of ferrocolumbium 
generally will result in significant savings to the steel 
manufacturer, when compared to the vanadium alternative. Where 
such a price difference exists, the higher cost product is 
simply not a substitute for the lower.
    This market, however, continues to change, and accelerated 
cooling technology available at some mills has effectively 
eliminated the need for either vanadium or columbium.

                            Stainless Steels

    Stainless steels are those containing more than approximately 12% 
of chromium, which provides resistance to corrosion. In oxidizing 
environments, chromium forms an impervious layer on the surface of the 
steel, which prevents further oxidation, or rusting.
    In stainless steels, ferrocolumbium and ferrovanadium do not really 
compete. Most standard ASTM grades using ferrocolumbium do not include 
ferrovanadium. In the few instances where ferrovanadium is used, it is 
used in conjunction with ferrocolumbium.

                        Interstitial-Free Steels

    Interstitial-free (IF) steels are cold rolled thin steel 
sheets with minimum carbon and nitrogen levels to improve 
processability. In these steels, columbium is used in 
conjunction with titanium to fix the residual carbon and 
nitrogen. Vanadium has never been and is not an important 
additive in these materials.

                           Other Alloy Steels

    Other alloy steels include full alloy steels, rail steels 
and tool steels. ``Niobium additions are uncommon in full alloy 
steels.... ``Niobium is used in only a few...rail steels.'' 
Roskill at p. 159.
    Similarly, ``Niobium is not widely used in tool steels.'' 
And while there may be the possibility for some substitution of 
columbium for vanadium in tool steels, essentially these are 
proprietary formulations and change is slow to come, if ever.
    As Michael Korchnsky, a former employee of and consultant 
to U.S. Vanadium Corporation, sums it up in his paper, ``Raw 
Materials Choices,'' columbium and vanadium ``are very 
different and not interchangeable.''
    As he states: ``It may sound surprising that although Cb 
(columbium) and V (vanadium) are the two key elements in micro-
alloyed steels, their mutual substitution is not practical. As 
a result of extensive research, each of these two...elements 
has its own sphere of applicability. There are products where 
Cb is the best addition, and there are other products which 
benefit most from micro-alloying by vanadium. Between these two 
extremes, there is some overlap, where simultaneous addition of 
both elements (Cb and V) fulfill a useful role....
    ``The chemistry and processing history of all steel 
products is a combined result of intensive R&D efforts, 
verified in steel plants by millions of tons of production. 
Fitness of these products to meet the demanding service 
conditions has been tested by the steel users in endless 
applications. Any substitution of one element by another will 
most likely lead to deterioration of some properties. This may 
lead to customers' dissatisfaction and possible claims. 
Furthermore, a substitution may require changes in processing 
practices, which may be time consuming and costly. The cost 
reduction by substitution may be illusory. Because of the above 
considerations, any decision regarding substitution should be 
based both on commercial and technical analysis. To prevent 
risk, avoidance of substitution might be the right policy.''
    In addition to technical considerations which make it clear 
that the two products are not interchangeable, pricing must be 
considered in any analysis of whether products are effective 
substitutes.
    As noted by Mr. Korchnsky: ``The desire to substitute one 
element for another becomes particularly strong when there is a 
price spike. In the belief that these elements are 
interchangeable, it is only natural to replace the costly alloy 
with the cheaper one.'' But as Mr. Korchnsky cautions, ``Since 
the elements are not interchangeable, this substitution may 
prove to be costly.''
    The ferrovanadium market has been characterized by frequent 
and unpredictable price changes. For example, as noted by 
MetalPrices.com Ferroniobium Price Chart dated June 10, 1999, 
from September, 1997 to February, 1998 the price of 
ferrovanadium in the U.S. went from an average of $8.89 to 
$14.50 per pound of vanadium contained. These high prices 
continued through most of 1998. As of March 1999, they had 
fallen to $5.81.
    When the price begins to rise, ferrovanadium producers who 
utilize petroleum residues as feed stock begin production. This 
production significantly increases supply. The price then tends 
to fall.
    At the higher levels of ferrovanadium pricing, some steel 
producers may be willing to consider the possible switch to 
ferrocolumbium for certain limited applications. That switch, 
however, is based not only on the price differential, but, 
equally important, the unpredictability of ferrovanadium 
prices. . Purchasing agents buy other products not always 
because they want to, but because they can't depend on 
producers to supply at a predictable price. Their decisions are 
not based upon the products being freely interchangeable 
substitutes. There are always tradeoffs.
    As a general matter, ferrovanadium is often significantly 
more expensive than ferrocolumbium, which during the period 
from 1989 to 1999 sold in the range of $6.50 to $7.00 per pound 
of columbium contained. In fact, ferrovanadium was sometimes 
twice as costly.
    Pricing plays a significant role in how much domestic 
ferrovanadium is used. As appears from the January 1999 Mineral 
Commodity Summaries of the U.S. Geological Survey, significant 
quantities of ferrovanadium are imported into the United 
States. ``While domestic resources are adequate to supply 
current domestic needs, a substantial part of U.S. demand is 
currently being met by foreign material because of price 
advantages.'' Thus, the competition for ferrovanadium is not 
really ferrocolumbium, but imported ferrovanadium, the majority 
of which comes from Canada, duty free as a result of NAFTA. For 
example, 1998 U.S. consumption of ferrovanadium was estimated 
at 3,710,000 kg of contained vanadium. 1997 imports of the same 
product were 1,840,000 kg, or approximately one-half of total 
U.S. consumption.
    The U.S. ferrovanadium industry does not need protection 
from ferrocolumbium. Vanitech, a vanadium producer association, 
reported in August, 1998 that the average amount of vanadium 
per ton of steel had increased dramatically, from 0.35 kg in 
1993 to 0.5 kg now. Overall consumption of vanadium in the 
United States is not falling. It is increasing. It has risen 
from 4,280 metric tons of vanadium contained in 1994 to an 
estimated 4,700 tons in 1998. The April 1999 U.S. Geological 
Survey, in fact, noted that the total reported consumption of 
vanadium in January, 1999 increased more than 11% from the 
revised data for December, 1998.
    Ferrovanadium in March, 1998 was selling for $5.81 a pound. 
Recently it has fallen even lower. The vanadium industry should 
not now be heard to complain that at $5.81 or less a pound it 
needs to impose a 5% duty on $7.00 a pound ferrocolumbium to 
survive. This is especially true in light of the fact that the 
5% duty on ferrovanadium imported from South Africa has just 
recently been eliminated.
    In summary, the ferrovanadium industry in the United States 
is a growing industry, whose real competition is not 
ferrocolumbium, but imported ferrovanadium. Imports of 
ferrovanadium into the United States are substantial, ranging 
from 1,910 metric tons of vanadium contained in 1994 to 1,700 
tons estimated for 1998. If the domestic ferrovanadium industry 
is able to compete and increase its production even competing 
against imported and cheaper ferrovanadium, the majority of 
which comes into the United States from Canada (and now South 
Africa) duty free, how is it logical to assume that it will be 
significantly harmed by the importation of duty free 
ferrocolumbium, which is utilized as a substitute only in very 
specific and limited circumstances?
    Argument # 3: The granting of duty free status would 
circumvent the GSP.
    The opposition expressed by the ITA is also founded in part 
on the claim that the proposed duty suspension would undermine 
or circumvent the operation of the United States' GSP program. 
This claim fundamentally misconstrues that nature of the 
proposed duty suspension. Had RMCI desired to obtain GSP 
treatment for ferrocolumbium imported from Brazil, RMCI could 
have and would have sought inclusion of the product during one 
of the periodic GSP product reviews initiated by the Office of 
the United States Trade Representative (``USTR''). Certainly, 
in the context of such a review, questions relating to the 
operation of the United States' GSP program would be 
appropriate.
    The legislation at issue here, and the duty suspension it 
provides for, are completely independent of the United States 
GSP program. The duty suspension, if enacted, will apply to 
ferrocolumbium imported from any country, not just Brazil. 
Thus, unlike duty preferences granted under the GSP program, if 
the proposed duty suspension is enacted, there will be no 
derogation from Most Favored Nation principles.
    The ITA recognizes that ``the United States lacks economic 
ferrocolumbium resources.'' As explained above, ferrocolumbium 
is not a substitute for and is not directly competitive with 
ferrovanadium. Thus, the proposed duty suspension for 
ferrocolumbium is sensible trade policy for the United States 
because it will benefit the United States, specifically United 
States consumers of ferrocolumbium, without harming a United 
States industry. In contrast, the United States GSP program has 
as its goal the promotion of economic development of our less 
developed trading partners. This goal, to aid development 
abroad, is completely separate and distinct from the purposes 
that warrant adoption of the proposed duty suspension for 
ferrocolumbium, to assist U.S. consumers and the U.S. economy.
    Certainly, the Brazilian economy has suffered dramatically 
during the past two years, in part as a result of the fallout 
from the Asian financial and economic crisis. In this regard, 
it is doubtless in the United States' national interest to 
continue to support the development of a healthy and vibrant 
Brazilian economy. This is doubly true when that support can be 
offered in a way that also benefits the United States economy. 
RMCI submits that the proposed duty suspension provides 
precisely such a ``win-win'' opportunity.
    The ITA has noted that during the last five years, Brazil's 
share of imported ferrocolumbium has averaged 87% and claims 
that granting the proposed duty suspension would somehow enable 
Brazil to ``circumvent'' the GSP program's competitive need 
limit waiver process. There are several responses to this 
objection. First, as explained above, there is no domestic 
ferrocolumbium industry. Thus, even if the proposed duty 
suspension were being sought in the context of the United 
States' GSP program, a statutory and regulatory basis would 
exist for granting a waiver. 19 U.S.C. Sec. 2463(d). Second, 
and most fundamentally, the proposed duty suspension here is 
completely independent of the GSP program. Clearly, Brazilian 
producers of ferrocolumbium are competitive in the United 
States and world marketplace. However, the object here is less 
to assist the Brazilian producers (as would be the case in the 
context of GSP) than it is to assist United States consumers, 
and by extension, the United States economy.
    In short, RMCI respectfully submits that considerations 
that are built into the structure of the United States GSP 
program have little or no place in determining ITC support for 
the proposed duty suspension for ferrocolumbium. Solid reasons 
of trade policy warrant and justify the proposed duty 
suspension. We believe that the ITC should support the proposed 
duty suspension accordingly.
    Argument # 4: The ITA asserts that suspension of the tariff 
would undermine NAFTA.
    The ITA's final objection to the proposed duty suspension 
is premised upon the claim that, if enacted, the duty 
suspension would undermine the intent of NAFTA. Apparently, the 
thought is that the United States, Canada and Mexico negotiated 
NAFTA so as to create a three-country duty-free zone and that, 
by extension, any action by the United States to lower or 
eliminate duties on products will reduce the NAFTA benefits 
enjoyed by Canada and Mexico. Again, we submit that this 
analysis is flawed on several grounds.
    First, although the primary source of ferrocolumbium other 
than Canada is Brazil, the proposed duty suspension is not 
limited to Brazil. Thus, the proposed duty suspension is not a 
trade benefit extended to Brazil per se. Rather, if enacted, 
the proposed duty suspension will apply to ferrocolumbium 
originating in any ``Column 1'' country.
    The claim that such a duty suspension might disrupt the 
NAFTA really proves too much. The same argument could be made 
for any and every suspension of duty on products imported into 
the United States. Yet Congress recently passed, and the 
President recently signed, the Miscellaneous Trade and 
Technical Corrections Act of 1999, Pub. Law 106-36 (June 25, 
1999), which suspends duties on a variety of different 
products. Certainly, at least some of these products are 
manufactured in, and imported into the United States from, 
countries in Central and South America. Yet the possible impact 
upon our NAFTA partners did not create an insuperable barrier 
to passage of suspension of these duties.
    Carried to its logical extreme, the position expressed by 
the ITA would preclude any ITC support for legislation that 
would suspend United States duties. In addition to the United 
States GSP program and the NAFTA, the United States has 
created, or participates in, a variety of preferential trade 
and tariff regimes. These include the U.S. Israel Free Trade 
Agreement, the Caribbean Basin Initiative and the Andean 
Initiative, as well as duty preferences provided under the 
Compact of Free Association Act, General Note 3(a)(iv) (for 
Insular Possessions of the United States) and others. Clearly, 
any unilateral revision by the United States of its tariff 
schedules is going to impact one or another of the 
beneficiaries under these various preferential regimes. Yet the 
Administration has supported, and Congress has periodically 
enacted, duty suspensions for various products. Thus, rather 
than expecting that United States will ``freeze'' existing duty 
rates in deference to existing duty preference regimes, it is 
more likely that our trading partners understand that the 
United States will continue to make incremental changes to its 
duty rates as and when justified by sound reasons of public 
policy. It therefore seems a weak objection indeed to claim 
that Canada would object were the existing tariff to be 
suspended upon imports of ferrocolumbium.
    This is especially true insofar as the effects on trade 
that will result if the proposed duty suspension is enacted 
will likely be small. Duties are presently assessed at the rate 
of 5% ad valorem. Total revenue to the United States resulting 
from the imposition of this duty amounts to only approximately 
$4 million per year. Certainly, the United States steel 
industry (and, by extension, U.S. consumers of steel) will 
benefit from lower costs if the duty suspension is enacted. The 
likelihood that it would seriously impact existing trade flows 
seems small, however.
    Finally, the likelihood of Canadian objection seems 
especially remote insofar as Canada allows the importation of 
Brazilian ferrocolumbium on a duty free basis under its own GSP 
program, even though there are Canadian producers. Indeed, that 
importation is increasing. Roskill reports that Canadian 
imports of ferrocolumbium from Brazil rose from 1,264 tons in 
1996 to 1,660 in 1997, and to 903 for the first six months of 
1998. Roskill at p. A9. If Canadian ferrocolumbium producers 
can compete against duty free imports, why is it that U.S. 
ferrovanadium producers can not?
    Lack of duty on ferrocolumbium imported into Canada makes 
Canadian steel more competitive in the U.S. market. Similarly, 
there is no duty on Brazilian ferrocolumbium entering Europe or 
Japan (up to a limit), thus giving their steel an unfair 
advantage over U.S. steel producers. If this legislation is 
passed, RMCI will pass on a significant portion of this savings 
to the United States steel industry, which is the largest 
consumer of ferrocolumbium. Thus, it will help to level the 
playing field for U.S. steel producers.

                                Summary

    RMCI respectfully suggests that this legislation is not 
controversial. There are no U.S. domestic producers of 
ferrocolumbium. To RMCI's knowledge, no ferrocolumbium 
producers, sellers or users have objected to this legislation. 
To the contrary, it is broadly supported by the largest 
consumer, the United States domestic steel industry, as is 
evidenced by the letter to Senator Roth from the American Iron 
& Steel Institute.
    The only opposers are listed as four, but are in reality 
two. Only two of them are manufacturers of ferrovanadium, the 
product which they allege to be substitutable with 
ferrocolumbium for certain steel applications. But as appears 
from the writings of one of their own consultants, these 
products are not readily interchangeable. They are not really 
directly competitive. When substitution occurs, it is generally 
technologically driven and permanent. In some other cases, it 
is because of significant price spikes which occur in the 
ferrovanadium industry, which significantly increase the cost 
to United States domestic steel producers.
    To the extent such price substitution in the steel industry 
takes place, it can be largely attributed to the historical 
lack of a stable, low cost price for ferrovanadium.
    This legislation in no way offends the GSP or NAFTA. Brazil 
contributes a large percentage of ferrocolumbium exports to the 
United States because its holds an equally large percentage of 
the world's resources of columbium. Canada and the other 
producing countries do not have the capacity to fill the United 
States domestic need for ferrocolumbium. That need can only be 
filled by Brazil. Brazil has not abused its position in any 
way. Prices for ferrocolumbium have stayed extremely 
competitive over the years, averaging about $7.00 per pound of 
columbium contained. By contrast, prices for ferrovanadium have 
spiked and fallen. When prices spike, some steel producers will 
consider a switch to ferrocolumbium, but those switches are 
limited in number, and to the period of the price increases. 
This limited switching is thus clearly attributable to the 
price of ferrovanadium, and not to actions of the 
ferrocolumbium sellers.
    The proposed legislation in no way undermines NAFTA or any 
other United States policy. NAFTA was enacted to eliminate 
tariffs between borders to make transactions between the United 
States, Mexico and Canada easier and thereby promote trade 
among them. It was not passed for the purpose of providing an 
unwarranted advantage to Canadian producers who cannot even 
come close to filing the United States demand for 
ferrocolumbium. Those Canadian sellers do not pass on to the 
U.S. steel industry the savings which they incur due to their 
duty free status. They simply make a larger profit, shielded by 
the duty imposed on Brazilian producers. The Canadian steel 
industry, which can buy duty free Brazilian product, also 
profits.
    The present duty impacts adversely only on the United 
States steel industry and the other foreign producers of 
ferrocolumbium, notably Brazil.
    Passage of this legislation will provide a significant advantage to 
the United States domestic steel industry, which is struggling in a 
desperate effort to maintain its viability in a increasingly 
competitive worldwide market. For the above reasons, RMCI respectfully 
requests that H.R. 2297 be promptly passed into law.

            Sincerely,
                                           Dr. Harry Stuart
                                           Executive Vice President
      

                                


                                                 September 22, 1999

The Honorable Philip M. Crane, Chairman
House Subcommittee on Trade
1104 Longworth House Office Building
Washington, D.C. 20515-1308

    Dear Chairman Crane:

    We are writing to offer our strong support for H.R. 2297 and to ask 
for its inclusion in the forthcoming miscellaneous tariff bill. The 
bill, introduced by Rep. Phil English, would provide temporary 
suspension of U.S. duty on, ferroniobium (commonly referred to as 
ferrocolumbium in North America).
    Standard grade ferroniobium. is an alloy of iron and columbium used 
primarily by the basic steel industry. The alloy is added to steel in 
very small quantities during the smelting process and makes the steel 
stronger and tougher. Products that benefit from the strengthening 
effect of ferroniobium include automobiles, oil and gas pipelines, 
bridges, ships, etc. Stainless steel automobile exhaust systems also 
contain ferroniobium.
    There are currently no domestic producers of standard grade 
ferroniobium. There is, therefore. no valid reason to continue the 
tariff. Because the alloy is not produced in the United States, U.S. 
steel producers are totally dependent on imported ferroniobium, either 
duty-free from Canada or at a 5 percent duty from Brazil. The cost of 
this duty, estimated at $4 million per year, is then passed on to the 
U.S. steel industry. This places U.S. steel producers at a competitive 
disadvantage since most major steel-producing countries already allow 
duty-free imports of Brazilian ferroniobium.
    The American Iron and Steel Institute has endorsed suspending the 
tariff on ferroniobium, which should be non-controversial. The bill 
will harm no one, while improving the competitiveness of the U.S. 
manufacturing base. We thank you for your consideration of this 
important matter.

            Sincerely,
                                   Ralph Regula,
                                           M.C., Ohio
                                   John P. Murtha,
                                           M.C., Pennsylvania
                                   Peter J. Visclosky,
                                           M.C., Indiana
                                   Robert W. Ney,
                                           M.C., Ohio
                                   John E. Peterson,
                                           M.C., Pennsylvania
                                   Jack Quinn,
                                           M.C., New York
      

                                


H.R. 2310

    To suspend temporarily the duty on certain ion-exchange 
resin.

                         No comments submitted.

      

                                


H.R. 2311

    To suspend temporarily the duty on certain ion-exchange 
resin.

                         No comments submitted.

      

                                


H.R. 2312

    To suspend temporarily the duty on certain ion-exchange 
resin.

                         No comments submitted.

      

                                


R. 2428

    To suspend temporarily the duty on 11-Aminoundecanoic acid.
      

                                


                        Elf Atochem North America, Inc.    
                                  Arlington, Virginia 22209
                                                 September 15, 1999

Honorable Philip M. Crane
Chairman
Subcommittee on Trade
Committee on Ways and Means
1104 Longworth HOB
Washington, DC 20515

    Dear Mr. Chairman:

    In response to the Subcommittee's Trade Advisory No. TR-15, I am 
submitting comments in support of H.R. 2428, which would amend chapter 
99, subchapter II of the HTSUS by inserting a new heading, 9902.32.49 
for chemical 11-Aminoundecanoic acid (provided for in subheading 
2922.49.40), as temporarily duty free.
    Monomer 11 (11-Aminoundecanoic Acid) and Monomer 12 (12-
Aminododecanoic Acid lactam) are used as precursors in the production 
of polymers Nylon 11 and Nylon 12 respectively. Nylon 11 and Nylon 12 
are sold to fabricators of molded and extruded parts. Nylon 11 and 
Nylon 12 compete against one another on price as a raw material for 
certain products such as air brakes, fuel lines, roto molding, offshore 
oil and gas pipes, auto parts, injection molding, hoses and tubing.
    Both Monomer 11 and Monomer 12 are imported into the U.S. Monomer 
12 is a duty free import under HTS 2933.79.40. However Monomer 11 is 
subject to a 4.2% duty under HTS 2922.49.50. Moreover, given the fact 
that Monomer 12 enjoys permanent duty free status, fairness would 
dictate that permanent duty free status likewise be granted to Monomer 
11.
    It is unfair to discriminate against Monomer 11. Monomer 11 and 
Monomer 12 are used in the same way to produce Nylon 11 and Nylon 12. 
Both monomers are heated in a pressurized vessel and agitated to 
produce their respective polymers. However, Monomer 11 and Monomer 12 
are treated differently under the Harmonized Tariff Schedule. Monomer 
12 is a duty free import, but Monomer 11 is subject to a 4.2% import 
duty. This results in an unfair competitive disadvantage for Nylon 11 
vis-a-vis importers of both Monomer 12 and Nylon 12.
    Importantly there is no domestic production of Monomer 11 or 
Monomer 12. Also, there would be minimal revenue loss under H.R. 2428. 
For example, in 1998, the total duty paid on Monomer 11 was $1,181,174.
    Finally, it is environmentally advantageous to use Monomer 11. 
Monomer 11 is based on an amino acid that contains 11 carbon atoms in 
each monomer molecule. It is derived from Castor oil. Monomer 12 is 
based on a lactam that contains 12 carbon atoms in each monomer 
molecule. It is derived from petroleum. The environmental advantage of 
using Monomer 11 over Monomer 12 is that Monomer 11 is based on a 
renewable resource, Castor oil, which is a vegetable oil.
    Thank you for this opportunity to offer our comments to the 
Committee.

            Regards,
                                         Charles A. Kitchen
                                      Director Government Relations
      

                                


H.R. 2472

    To suspend temporarily the duty on dimethoxy butanone 
(DMB).

                         No comments submitted.

      

                                


H.R. 2473

    To suspend temporarily the duty on dichloro aniline (DCA).

                         No comments submitted.

      

                                


H.R. 2474

    To suspend temporarily the duty on diphenyl sulfide.

                         No comments submitted.

      

                                


H.R. 2475

    To suspend temporarily the duty on trifluralin.
      

                                


Statement of Albaugh, Inc.

                            I. INTRODUCTION

    This statement is submitted in response to the ``Advisory 
from the Committee on Ways and Means'' dated August 12, l999 
(TR-5) entitled ``Crane Announces Request for Written Comments 
on Miscellaneous Corrections to Trade Legislation and 
Miscellaneous Duty Suspension Bills.''
    This statement is submitted by Leslie Alan Glick, Esq. and 
E. Jay Finkel, Esq. at Porter, Wright, Morris & Arthur, as 
counsel on behalf of Albaugh, Inc. (``Albaugh'') which is the 
importer of the subject product covered under H.R. 2475. 
Albaugh has its headquarters at 121 N.E. 18th Street in Ankeny, 
Iowa and has production facilities at 4900 Packers Avenue, St. 
Joseph, Missouri. Albaugh, Inc. is a small business with 36 
employees.

       II. BACKGROUND AND NEED FOR PROPOSED DUTY SUSPENSION BILL

    H.R. 2475 would suspend the duty on the chemical 
Trifluralin, 2, 6-dinitro-N, N-dipropyl-4(triflormethyl) 
benzenamine; alpha, alpha, alpha-trifluoro-2-6-dinitro-p-
toluidine (CAS No 1582-09-08) commonly known as technical grade 
Trifluralin. This product is imported under HTS 2921.43.15 by 
Albaugh in solid unformulated form. Albaugh then adds solvents 
and emulsifiers and sometimes stabilizers, when the final 
product is sold in colder climates, and then packages the 
product in liquid form in the United States and markets the 
product in the United States as commercial grade Trifluralin 
that is sold to farmers. The imported product, which is the 
subject of the duty suspension bill, is not produced in the 
United States. Therefore, no United States company would be 
harmed by this bill, and as explained herein, several would 
benefit.
    Trifluralin is a very important agricultural chemical. It 
is a selective, pre-emergence herbicide for use on soybeans, 
cotton and other crops such as alfalfa. United States farmers 
need Trifluralin to protect their crops. Without the imported 
technical Trifluralin, Albaugh and other U.S. producers of the 
commercial grade Trifluralin would simply have no supply and 
could not meet the demands of the United States agricultural 
industry. Soybeans and to a lesser extent cotton are major 
export crops of the United States and important to the economy 
of many states as well as the country as a whole. Keeping the 
United States soybean and cotton crops healthy and free from 
disease are an important function accomplished by Trifluralin, 
a function that would be furthered by passage of H.R. 2475.
    There are other more indirect benefits from this 
legislation facilitating greater and cheaper U.S. imports of 
technical grade Trifluralin that would be accomplished by H.R. 
2475. For example, Albaugh's principal foreign supplier of 
technical grade Trifluralin actually purchases a substantial 
amount of chemicals from the U.S. that are used to manufacture 
this exported product. Occidental Chemical Company 
(``OxyChem'') in Texas exports P-chlor-benzo-trifluoride 
(``PCBTF'') in significant quantities to Albaugh's foreign 
supplier, that comprises an important component of the 
technical Trifluralin that is imported back to the United 
States. Removal of the duty should increase the supply and 
lower the cost of the technical Trifluralin needed by Albaugh, 
and at the same time increase U.S. exports of PCBTF that will 
benefit OxyChem and other U.S. companies.
    In addition to Albaugh, Dow Agro Sciences--``one of the 
largest research-based agricultural companies in North 
America'' (Dow Agro Sciences website, January 29, l998)--also 
imports technical grade Trifluralin to make the final 
commercial grade product here in the U.S. Dow Agro which we 
believe is the proponent of this bill will undoubtedly submit 
its own written statement. Dow Agro is the largest producer of 
commercial grade Trifluralin and has over 3,100 employees and 
will be a major beneficiary if H.R. 2475 is passed, along with 
Albaugh and the American farmers who will be assured a steady 
supply of Trifluralin without the added cost represented by the 
existing 10% duty, that protects no one, since there are no 
U.S. producers of the imported technical grade product. Griffin 
LLC in Valdosta, Georgia, and American Cyanamid in Wayne, New 
Jersey, and Hannibal, Missouri also import this technical grade 
Trifluralin to produce commercial grade Trifluralin in the 
United States and would also benefit from this legislation.

                            III. CONCLUSION

    H.R. 2475 eliminates a needless duty that limits access and 
raises costs to U.S. soybean and cotton farmers of an important 
agricultural herbicide. The duty is needless since technical 
Trifluralin is not produced in the U.S. This legislation is 
clearly beneficial and has no adverse effect on any U.S. 
companies, but would, however, help small businesses like 
Albaugh be more efficient and have a steady source of supply.
      

                                


H.R. 2476

    To suspend temporarily the duty on diethyl imidazolidinnone 
(DMI).

                         No comments submitted.

      

                                


H.R. 2477

    To suspend temporarily the duty on ethalfluralin.

                         No comments submitted.

      

                                


H.R. 2478

    To suspend temporarily the duty on benefluralin.

                         No comments submitted.

      

                                


H.R. 2479

    To suspend temporarily the duty on 3-amino-5-mercapto-
1,2,4-triazole (AMT).

                         No comments submitted.

      

                                


H.R. 2480

    To suspend temporarily the duty on diethyl 
phosphorochoridothiate (DEPCT).

                         No comments submitted.

      

                                


H.R. 2481

    To suspend temporarily the duty on refined quinoline.

                         No comments submitted.

      

                                


H.R. 2482

    To suspend temporarily the duty on 2,2'-dithiobis(8-fluoro-
5-methoxy)[1,2,4] triazolo[1,5-c] pyrimidine (DMDS).

                         No comments submitted.

      

                                


H.R. 2516

    To suspend temporarily the duty on atmosphere firing.
      

                                


Statement of Leslie Alan Glick, Esq., Partner, Porter, Wright, Morris & 
Arthur, as counsel on behalf of Kemet Electronics Corporation, 
Greenville, South Carolina, and Vishay Intertechnology, Inc., Malvern, 
Pennsylvania

                            I. INTRODUCTION

    This statement is submitted in response to the ``Advisory 
from the Committee on Ways and Means'' dated August 12, 1999 
(TR-5) entitled ``Crane Announces Request for Written Comments 
on Miscellaneous Corrections to Trade Legislation and 
Miscellaneous Duty Suspension Bills.''
    This statement is submitted by Leslie Alan Glick, Esq., 
partner, Porter, Wright, Morris & Arthur as counsel on behalf 
of Kemet Electronics Corporation (``Kemet'') and Vishay 
Intertechnology, Inc. (``Vishay'') which are importers of the 
products covered under H.R. 2516, H.R. 2517, H.R. 2518, H.R. 
2519, H.R. 2521, H.R. 2522, H.R. 2523, H.R. 2524 and H.R. 2526. 
Together Kemet and Vishay are the largest producers of 
capacitors for use in electronic devices such as computers. 
Vishay also produces resistors that are used in electronic 
devices. Kemet is headquartered in Greenville, South Carolina 
and has principal facilities in the U.S. at Simpsonville, 
Mauldin, Fountain Inn and Greenwood, South Carolina as well as 
in Shelby, North Carolina and Brownsville, Texas as well as 
offices in Florida, Pennsylvania, Massachusetts, California, 
Michigan, New York, Illinois, Indiana, Washington, Arizona, 
Colorado, Minnesota, Oklahoma and Alabama. Over 3,300 people 
are employed in these various facilities.
    Vishay is headquartered in Malvern, Pennsylvania, with 
facilities in the U.S. producing capacitors or resistors in 
Bridgeport, Connecticut (Vishay Vitramon); Roanoke, Virginia 
(Vishay Vitramon); Columbus and Norfolk, Nebraska (Vishay 
Dale); Sanford, Maine (Vishay Sprague); West Palm Beach, 
Florida (Vishay Sprague); Concord, New Hampshire (Vishay 
Sprague); Statesville, North Carolina (Vishay Ruederstein) 
Yankton, South Dakota (Vishay Dale); Tempe, Arizona (Vishay 
Dale); El Paso, Texas (Vishay Dale); Bradford Pennsylvania 
(Vishay Dale); Niagara Falls, New York (Vishay Ohmteck); and 
Hagerstown, Maryland (Vishay Angstrom). Over 5,300 people are 
employed at these locations.

       II. BACKGROUND AND NEED FOR PROPOSED DUTY SUSPENSION BILLS

A. History of Past Tariff Actions that Adversely Affected Kemet and 
Vishay and Other U.S. Producers of Capacitors and Resistors

    Kemet and Vishay are virtually the last surviving producers in the 
U.S. of tantalum and ceramic capacitors and certain types of resistors 
used in the electronics industry. Competition from imports has been 
rigorous and aggressive. This competitive situation was made much worse 
when the U.S. agreed, as part of the Information Technology Agreement 
(``ITA'') to phase out the duties on imported capacitors and resistors 
in four stages. These duties are now zero. Imports from Japan have been 
particularly harmful to Kemet and Vishay. As noted by the U.S. 
International Trade Commission (``ITC'') ``Japan is the world's 
dominant producer of capacitors and resistors.'' U.S. International 
Trade Commission ``Advice Concerning the Proposed Modification of 
Duties on Certain Information Technology Products and Distilled 
Spirits,'' Report to the President on Investigation No. 332-380, Pub. 
No. 3031 (Final), April 1997, at 5-38. Much of the Japanese capacitor 
and resistor production is exported. Id. Japanese producers are often 
much larger than their U.S. competitors. Id. These companies through 
their close relationship with Japanese manufacturers of consumer 
electronics goods gain certain advantages to the Japanese industry that 
the U.S. producers do not have. These included a guaranteed demand for 
their products and financial resources to sustain market downturns. Id.
    Japanese exports of these products have been growing rapidly and 
the growth of exports, during the five year period studied by the ITC 
was 65% while production grew only 24%. Id. Thus, it is clear that the 
Japanese capacitor industry is bigger and has greater economic 
resources than its U.S. counterpart and that a large percentage of the 
industry is producing for export. Prior to the ITA, capacitors and 
resistors faced relatively high duties in the U.S. ranging from 6-9 
percent ad valorem. Even with these high duties the Japanese kept 
increasing exports to the United States. The Japanese had no trouble 
competing even with these high duties because of some of their 
competitive advantages discussed above. The ITC report noted that ``ITA 
duty elimination is likely to result in increased market access 
opportunities.'' Id., at 5-40. In regard to overall competition the 
report noted that ``the U.S. capacitor and resistor industries face 
strong international competition,'' that these products are ``extremely 
price sensitive'' and that ``in regard to price competition, the United 
States has relatively high labor rates and is therefore at a relative 
disadvantage in terms of producing costs.'' Id., at 5-36, 5-37. Despite 
these indications from the ITC, and the strong opposition of the U.S. 
capacitor and resistor industry (See Exhibit A), the U.S. government 
proceeded to negotiate, sign and implement the ITA and remove the 
duties on capacitors and resistors. This has resulted in imported 
capacitors, particularly from Japan, being imported in great quantities 
causing Vishay and Kemet to lose sales, profits and ultimately to have 
to lay off employees. This is illustrated by the table below which 
demonstrates the increase in Japanese and worldwide exports to the U.S. 
of tantalum and ceramic multilayered capacitors immediately after the 
implementation of ITA-I in July 1997. A comparison of imports in the 
first half of 1997 before ITA-I and the second half after ITA-I 
indicated a very sharp increase in Japanese exports. This increase 
continues through today. Although complete 1999 data are not yet 
available if the data for the first half of 1999 are annualized they 
indicate a total for 1999 of 17.12 billion capacitors compared to 13.02 
billion in 1997, an increase of about one third just in this two year 
period.

                                      Tantalum and Ceramic Fixed Capacitors
----------------------------------------------------------------------------------------------------------------
                                      Total U.S. Import     Imports from        Total U.S.        Imports from
                                           (value)         Japan (value)     Imports (units)     Japan (units)
----------------------------------------------------------------------------------------------------------------
% Increase 1997 to 1999.............             22.13%             51.54%             27.32%             31.43%
1999*...............................        873,001,766        282,113,650     41,474,436,060     17,121,858,806
Jan-June 1999.......................        436,500,883        141,056,825     20,737,218,030      8,560,929,403
1998................................        775,808,511        233,879,388     37,829,965,174     15,496,906,815
1997................................        714,826,123        186,163,286     32,575,987,218     13,027,280,473
July-Dec 1997.......................        387,556,700        106,629,140     18,344,668,081      7,332,645,626
Jan-June 1997.......................        327,269,423         79,534,146     14,231,319,137      5,694,634,847
----------------------------------------------------------------------------------------------------------------
Source U.S. Department of Commerce, Bureau of Census
*1999 Data Annualized


    While one might think that Kemet and Vishay might have benefited 
from lower duties in other countries to increase exports--the 
``benefits'' were illusory. This is because Europe already had low 
tariffs on these products and the U.S. had already penetrated this 
market as far as possible and Japan had no duties on these products, 
but instead Japan had many non-tariff barriers that have made it 
virtually impossible for Kemet and Vishay to sell capacitors and 
resistors in Japan. Part of this was described in the ITC report 
concerning the close relationships and sometimes intertwining ownership 
between the Japanese electronics producers and capacitor and resistors 
producers. The Japanese electronics companies have preferred to buy 
from their own related capacitor and resistor producers in Japan. This 
is reflected in the fact that 1999 Japanese imports of all types of 
capacitors from all of North America are estimated at only $500,000. 
Source, Electronic Industry Association World Capacitor Trade 
Statistics. Thus, Kemet and Vishay really obtained no benefits from the 
ITA and experienced rather pronounced disadvantages as a result of the 
agreement.

B. Need for Proposed Duty Suspension Bills to Remedy Competitive 
Disadvantages to the U.S. Capacitor and Resistor Producers

    After the completion of ITA-I, Kemet and Vishay had a number of 
meetings with the Office of the U.S. Trade Representative (``USTR'') to 
discuss their competitive problems caused by ITA-I. Kemet and Vishay 
pointed out the inequity that existed in allowing Japanese finished 
capacitors and resistors to enter the U.S. duty free to compete with 
Kemet and Vishay, but at the same time requiring Kemet and Vishay and 
other U.S. producers to pay duties on parts and machinery they needed 
to import from Japan and other countries to produce the capacitors and 
resistors in the U.S., that made them less competitive with the 
Japanese prices on the finished products. This was in effect a double 
disadvantage the U.S. industry faced. There are no duties on the 
finished products exported by its competitors but there are duties on 
machinery and components that the U.S. industry needs to produce the 
finished products.
    Because of the Japanese dominance in this industry, many of the 
machines needed to produce capacitors and resistors are made in Japan. 
Kemet and Vishay requested that the U.S. Trade Representative attempt 
to obtain lower duties on these machines and components as part of ITA-
II which was the second round of tariff negotiations in this area. 
Vishay and Kemet made formal requests to the USTR to include these 
products in ITA-II and had numerous meetings with USTR personnel but 
were told that although the U.S. had included the products requested by 
Kemet and Vishay on their list, that the other countries were not 
interested in discussing tariff cuts on these products. The USTR 
recommended to Kemet and Vishay at a meeting that they pursue a duty 
suspension bill as a method of achieving the goal of reducing their 
costs for imported machinery and components. This is the reason that 
Kemet and Vishay are seeking passage of the above referenced bills.

                            III. CONCLUSION

    Passage of the above referenced duty suspension bills are 
vital to the competitiveness of the few remaining U.S. 
producers of tantalum and ceramic capacitors and resistors for 
the electronics industry. The dominance of Japan is 
considerable. The removal of the duty on the finished products 
under ITA-I placed extreme competitive pressures on the U.S. 
producers since the Japanese were already effectively competing 
successfully in the U.S. market prior to the duty removal. The 
ITC has recognized that this is a ``price sensitive product.'' 
The removal of the duty for Japanese products gave the Japanese 
a tremendous competitive edge in a market they were already 
penetrating with a high degree of success. The only remedy now 
for the U.S. producers is to lower their costs. This can be 
done in several ways. One is eliminating workers and jobs. This 
of course is undesirable but both Kemet and Vishay have had to 
eliminate jobs during the last year. A preferable approach is 
to lower costs on components and machinery. Duties on these 
products are an important element of the cost. Suspension of 
these duties under the above referenced bills would help to 
lower these costs and help at least in part, to even out some 
of the advantages the Japanese are now experiencing in the U.S. 
market.
      

                                


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H.R. 2517

    To suspend temporarily the duty on ceramic coater.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2518

    To suspend temporarily the duty on capacitance tester and 
reeler.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2519

    To suspend temporarily the duty on vision inspection 
systems.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2521

    To suspend temporarily the duty on anode presses.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2522

    To suspend temporarily the duty on rackers.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2523

    To suspend temporarily the duty on epoxide resins.

        see also Kemet Electronics Corporation under H.R. 2516.

      

                                


                        Elf Atochem North America, Inc.    
                                      Bloomington, MN 55425
                                                 September 16, 1999

The Honorable Philip M. Crane
Chariman, Subcommittee on Trade
House Ways & Means Committee
1104 Longworth HOB
Washington, D.C. 20515

Re: Trade Advisory No. TR-15 concerning H.R. 2523--Epoxide Resins Duty 
        Suspension

    Dear Mr. Chairman:

    In response to the subcommittee's Trade Advisory No. TR-15, I am 
submitting comments in opposition to the passage of H.R. 2523--a bill 
that would suspend the current import duty on epoxide resins by 
amending HTSUS 3907.30.00 and inserting a new heading -9902.39.00.
    Elf Atochem North America, Inc. is a major domestic producer of a 
broad line of epoxide resins that includes: Alpha Olefin epoxides; 
vegetable oil epoxides & esters, as well as a complete line of 
Specialty epoxides. These products are produced at our Blooming 
Prairie, Minnesota facility and all raw material used in the production 
of our epoxide resins is sourced domestically. As a domestic producer 
employing U.S. workers, we believe that this imported material likely 
will compete unfairly with us in the U.S. market.
    Importantly, we would need to learn the name of the entity seeking 
tariff suspension and, a profile of the epoxide resin materials to be 
covered in the newly proposed HTSUS category. If possible, could you 
advise if such information is currently available in the public record.
    Should you require additional information on our product line, 
please contact me. Thank you for this opportunity to offer our comments 
to the Committee and for your response to this submission.

            Sincerely,
                                                R. M. Loula
                         Business Manager, Epoxidized Oils Division

cc: C. Kitchen (Wash DC Office)
W. Schumacher, (Corp HQs)
      

                                


H.R. 2524

    To suspend temporarily the duty on trim and form.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2526

    To suspend temporarily the duty on certain assembly 
machines.

           see Kemet Electronics Corporation under H.R. 2516.

      

                                


H.R. 2609

    To promote product development and testing in the United 
States, and for other purposes.
      

                                


Association of International Automobile Manufacturers, Inc.  
                                                           
                                        Arlington, VA 22209
                                                 September 22, 1999

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: H.R. 2609--``Product Testing and Development Act of 1999''

    Dear Mr. Singleton:

    The Association of International Automobile Manufacturers, Inc. 
(AIAM), hereby expresses its support of H.R. 2609, subject to technical 
corrections. This bill would promote the development and testing of 
products in the United States by eliminating the duties on imported 
prototypes.
    AIAM is the trade association representing U.S. subsidiaries of 
international automobile companies doing business in the United States. 
Member companies distribute passenger cars, light trucks, and 
multipurpose passenger vehicles in this country and export them outside 
the United States. Nearly two-thirds of the vehicles they distribute 
here are manufactured in the new American plants established by AIAM 
companies in the past decade. AIAM also represents manufacturers of 
tires and other original equipment with production facilities in the 
United States and abroad.
    AIAM supports H.R. 2609 principally for the following four reasons 
as they relate to the manufacture of motor vehicles in this country.
    First, the use of temporary importations under bond and duty 
drawback to avoid the duties on prototypes is often impractical and 
ineffective. This is due to the fact that both require that the 
prototype be exported and require that this happen within a stipulated 
timetable. It is often the case that the prototypes are to be used 
solely in the United States or are to be used for more than the time 
allowed before exportation is required. The elimination of duties on 
prototypes will avoid the need to resort to cumbersome and 
unsatisfactory ways of avoiding duties.
    Second, H.R. 2609 will be of substantial value to motor vehicle 
manufacturers in this country. They rely significantly upon prototypes 
imported from abroad, as well as those made here. Their reliance on 
imported prototypes is likely to increase as U.S. manufacturers expand 
their ties with foreign manufacturers and turn to them for more 
prototypes.
    Third, in the motor vehicle industry, H.R. 2609 should not have any 
injurious economic consequences. Virtually all of the production of 
U.S. prototypes normally takes place within the facilities of the motor 
vehicle manufacturers. There is no separate industry in this country 
that manufactures prototypes of motor vehicles and that might be 
affected by the elimination of duties.
    Fourth, H.R. 2609 is thoroughly consistent with the growing and 
salutary trend towards the elimination of duties--both U.S. and 
foreign--in the motor vehicle sector. That trend promotes the 
globalization of the motor vehicle industry. In turn, such 
globalization yields the manufacture of motor vehicles of lower cost 
and higher quality.
    Our technical corrections relate to the manner in which H.R. 2609 
would amend the Harmonized Tariff Schedule of the United States. We 
have two problems with the amendment. First, the language of the 
proposed new heading 9817.85.01 and U.S. Note 6 suggests that there are 
prototypes other than those to be used for the four stated purposes. In 
fact, however, the prototypes in question are the very articles that 
are to be used exclusively for those purposes. Second, in the language 
of the proposed new U.S. Note 6(a), it is not clear why clause (ii) is 
needed or what it adds. It therefore obfuscates the definition of 
``prototypes'' in clause (I).
    We therefore suggest the following two corrections. First, revise 
the text in the second column of the new heading 9817.85.01 to read 
``Prototype, as defined in U.S. Note 6.'' Second, revise the text of 
U.S. Note 6(a) to read:

        ``(a)(i) The term `prototype' means the original or model of an 
        article that is either in the pre-production, production, or 
        post-production stage and that is to be used exclusively for 
        the development, testing, evaluation, or quality control of a 
        product.''

and designate the provision concerning automobile racing as clause 
(ii).

            Sincerely yours,
                                  Philip A. Hutchinson, Jr.
                                                  President and CEO
      

                                

[GRAPHIC] [TIFF OMITTED] T0253.010

      

                                


                                   BMW of North America    
                                            Greer, SC 29651
                                                 September 20, 1999

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

Re: Technical Corrections to Trade Legislation and Miscellaneous Duty 
        Suspension Proposals, Specifically H.R. 2609

    Dear Mr. Singleton:

    BMW Manufacturing Corp and BMW of North America support the passage 
of H.R. 2609 that would amend Chapter 98, Subchapter XVII. The proposed 
new heading, 9817.85.01, to allow duty-free treatment of prototype 
vehicles imported exclusively for development, testing, product 
evaluation or quality control purposes would serve as an incentive for 
research and development for automobiles to occur in the United States 
rather than abroad. It would foster the creation of industrial activity 
that would require highly skilled U.S. workers.
    Although BMW Manufacturing Corp is an U.S. company and manufactures 
vehicles in the United States, it also imports finished vehicles, as 
does BMW of North America. On numerous occasions these vehicles are 
brought into the United States for quality control, weather, and 
development testing as well as product evaluation. To have a tariff 
number that specifically addresses the testing of vehicles imported for 
these purposes encourages this type of activity to occur in the United 
States. The current practice requires that duty be paid twice--once on 
the prototype when it enters the U.S. for testing and a second time in 
value added to the price paid or payable on the imported vehicles.
    Again, BMW supports the passage of H.R. 2609.

            Sincerely,
                                  Donnie B. Turbeville, LCB
                 Assistant Secretary--Customs, BMW of North America
                        Customs Coordinator--BMW Manufacturing Corp

cc The Honorable Strom Thurmond
The Honorable Fritz Hollings
The Honorable Jim DeMint
The Honorable Arthur Ravenel
The Honorable Floyd Spence
      

                                


                                      G.D. Searle & Co.    
                                           Skokie, Illinois
                                                 September 21, 1999

VIA MESSENGER

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: Written Statement of G. D. Searle & Co. In Support of H.R. 2609; 
        Product Development and Testing Act of 1999

    Dear Mr. Singleton:

     On behalf of our client, G. D. Searle & Co. (``Searle''), we 
hereby respectfully submit the following written comments in support of 
H.R. 2609, the Product Development and Testing Act of 1999, introduced 
by Representatives Camp and Levin. Searle's written comments in support 
of H.R. 2609 are submitted pursuant to the August 12, 1999 announcement 
by Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade 
of the Committee on Ways and Means, inviting the submission of comments 
to proposed trade legislation, including, inter alia, H.R. 2609.
     Proposed H.R. 2609 is legislation stated to promote product 
development and testing in the United States, and would amend Chapter 
98 of the Harmonized Tariff Schedule of the United States (``HTSUS'') 
by inserting a new HTSUS subheading 9817.85.01, providing for the duty-
free treatment of prototypes imported exclusively for development, 
testing, product evaluation or quality control purposes. Through the 
submission of these written comments, Searle respectfully sets forth 
its strong support for H.R. 2609, and its recommendation for amendment 
thereto in order to insure that H.R. 2609 fairly and universally 
applies to all U.S. industries, including the pharmaceutical industry.

           I. INTRODUCTION: DESCRIPTION OF G. D. SEARLE & CO.

     Searle, a wholly-owned subsidiary of Monsanto Co., whose 
world headquarters are located in Skokie, Illinois, is a 
research-based pharmaceutical company that develops, 
manufactures, and markets prescription pharmaceuticals and 
other healthcare products worldwide. Its mission is to bring to 
the consumer market innovative, value-added healthcare products 
that satisfy unmet medical needs. In its pursuit, Searle has 
traditionally focused its development of revolutionary 
pharmaceutical products in the areas of immunoinflammatory 
conditions (e.g., arthritis), cardiovascular diseases, cancer, 
insomnia, and women's reproductive health, and is widely 
recognized for its pioneering developments and success.
     Searle's roots trace back to 1888, when Gideon Daniel 
Searle started the company in Omaha, Nebraska, and 
subsequently, in 1908, formally incorporated the company in 
Illinois as G. D. Searle & Co. Currently, Searle operates 
administrative offices in 36 countries and employs 
approximately 9,400 individuals. Last year, Searle generated 
approximately $2.9 billion in total revenue. Examples of 
Searle's successes include the origination and 
commercialization of the first modern bulk laxative, the first 
motion-sickness drug, the first oral contraceptive, the first 
modern antiarrhythmic, the first specific oral anti-diarrheal, 
and several other innovative products such as the discovery and 
commercial production of aspartame (NutraSweet). Most 
recently, with the development and production of 
CelebrexTM, an analgesic/anti-inflammatory drug, 
Searle was the first pharmaceutical company to produce a drug 
proven to prevent gastric ulcers typically associated with 
other nonsteroidal anti-inflammatory drugs taken daily by 
millions of people worldwide suffering from arthritis and 
similar debilitating diseases. From its roots in the Midwest 
over a century ago, to its global presence today, Searle is a 
pioneer and leader in the pharmaceutical industry.

                    II. BRIEF STATEMENT OF POSITION

     In order to further promote product development and 
testing in the United States, to remove impediments to domestic 
research and development of new products, and to remedy an 
apparent inequity in the Customs valuation laws, Searle 
supports the Product Development and Testing Act of 1999 (H.R. 
2609), and the inclusion of a new HTSUS subheading 9817.85.01 
providing for the duty-free treatment of prototypes imported 
exclusively for research, development, testing, product 
evaluation, or quality control purposes. Through the submission 
of these written comments, Searle wishes to ensure that such a 
new prototype breakout within the tariff which is designed and 
intended to encourage the domestic research, development, 
evaluation, and testing of new products will apply equally for 
all U.S. industries, including the pharmaceutical industry. In 
order to achieve this goal, Searle respectfully recommends 
certain limited changes to the language of the proposed tariff 
amendment. These recommended changes to H.R. 2609 are set forth 
in Section V below.

  III. CURRENT STATUTORY SCHEME INEQUITABLY ASSESSES A DOUBLE DUTY ON 
                          IMPORTED PROTOTYPES

     As discussed below, and recognized by the proposed 
legislation, under the applicable Customs laws, merchandise 
imported as ``prototypes'' which are used for product research, 
development, testing, or product evaluation purposes are 
subject to duty upon importation into the United States at the 
rate applicable for such products, unless they otherwise 
qualify for duty-free treatment under a special trade program 
or are entered under a temporary importation bond. Furthermore, 
pursuant to Customs valuation statute, the appraised value 
(i.e., typically the price actually paid or payable) of 
imported merchandise must include, among other things, all 
payments made by the buyer to the seller for tooling, research 
and development, testing, samples, and prototypes. As a result, 
U.S. importers are required to pay duties for prototypes twice: 
once upon the physical importation of the prototypes, and again 
upon importation of the subsequently imported merchandise 
(assuming the merchandise is the result of the same development 
efforts of the previously imported prototypes).

  A. Prototypes Are Subject to Duty Upon Entry into the United States.

    Pursuant to the relevant Customs laws, all merchandise 
imported into the customs territory of the United States which 
is provided for within the HTSUS is subject to duty unless 
otherwise specifically exempted therefrom. 19 U.S.C. Sec. 1202, 
HTSUS General Note 1 (1999). Accordingly, unless imported 
prototypes otherwise qualify for duty-free treatment under a 
special preferential duty or trade program, or are entered 
under a temporary importation bond, they are subject to duty 
upon importation into the United States at the duty rate 
applicable for such products.

 B. The Declared Value of Imported Merchandise Includes Payments Made 
                        Relating to Prototypes.

     In addition to the assessment of duty upon the importation 
of prototypes, the value and development costs associated with 
such prototypes must often be included in the appraised value 
of subsequently imported merchandise developed therefrom. 
Pursuant to the applicable Customs valuation statute, the 
preferred method of appraising merchandise imported into the 
United States is transaction value. 19 U.S.C. Sec.  1401a 
(1999). Transaction value of imported merchandise has been 
defined as the ``price actually paid or payable for the 
merchandise when sold for exportation to the United States,'' 
plus certain enumerated statutory additions. 19 U.S.C. Sec.  
1401a(b)(1). The ``price actually paid or payable'' is further 
defined within the statute as the ``total payment (whether 
direct or indirect, and exclusive of any costs, charges, or 
expenses incurred for transportation, insurance, and related 
services incident to the international shipment of the 
merchandise . . .) made, or to be made, for the imported 
merchandise by the buyer to, or for the benefit of, the 
seller.'' 19 U.S.C. Sec.  1401a(b)((4)(A).
     It has been the United States Customs Service's position 
that ``all amounts paid to the seller by the importer are 
included in the price actually paid or payable for the imported 
merchandise.'' Customs Headquarters Ruling Letter (``HRL'') 
545907, dated October 11, 1996, citing, Generra Sportswear Co. 
v. United States, 905 F.2d 377 (Fed. Cir. 1990); HRL 544640, 
dated April 26, 1991. Pursuant, therefore, to Customs' broad 
interpretation, the agency has consistently ruled that ``the 
price actually paid or payable for the imported merchandise 
includes payments by the buyer to the seller for tooling, 
research and development, testing, as well as payments for 
samples and prototypes,'' including payments relating to the 
development and production of such samples or prototypes. HRL 
545907; HRL 545320; dated February 28, 1995; HRL 544381, dated 
November 25, 1991; HRL 544516, dated January 9, 1991.

 IV. PROPOSED H.R. 2609 WOULD REMEDY THE INEQUITABLE DOUBLE ASSESSMENT 
 OF DUTIES ON PROTOTYPES AND SUPPORT U.S. BUSINESSES AND AMERICAN JOBS

     In light of the above, under the current statutory scheme 
for assessing customs duties, all imported prototypes are most 
likely to be subject to duty twice: once upon importation of 
the prototypes, and again upon importation of the subsequently 
imported merchandise (assuming the merchandise is the result of 
the same design and development efforts of the previously 
imported prototypes). H.R. 2609 is expressly intended to remedy 
this unfair application of the Customs laws. As the proposed 
legislation recognizes, by assessing duty on prototypes twice, 
Customs is effectively penalizing and discouraging the 
development and testing of new products in the United States, 
while simultaneously encouraging the development and testing of 
prototypes to occur overseas. Moreover, such application of a 
double duty on prototypes unnecessarily inflates the cost to 
U.S. businesses, reduces their competitiveness, and ultimately 
sends valuable, high-technology research, development, and 
engineering jobs overseas. As provided for in the preamble to 
H.R. 2609:

          (2) The development and testing that occurs in the United 
        States incident to the introduction and manufacture of new 
        products, and with respect to products which have already been 
        introduced to commerce, represents a significant industrial 
        activity employing highly-skilled workers in the United States.

    H.R. 2609 is a direct attempt to remedy this apparent 
inequity in the Customs laws by proposing a new HTSUS Chapter 
98 provision which would allow the duty-free entry of 
``prototypes to be used exclusively for development, testing, 
product evaluation or quality control purposes,'' and, with 
certain recommended amendments, Searle supports such a new 
provision.

     V. H.R. 2609 MUST BE EQUITABLY APPLIED TO ALL U.S. INDUSTRIES.

     While H.R. 2609 would undoubtedly benefit U.S. importers 
of prototypes, and support U.S. industry and American jobs, 
Searle believes that the currently drafted provision is 
ambiguous as to its intended application. The benefits and 
advantages for U.S. businesses inherent in H.R. 2609 must be 
equally applied to all U.S. industries. The policy reasons for 
implementing such legislation are universally applied to all 
U.S. industries, and all U.S. companies should be able to 
benefit and avoid the inequitable assessment of a double-duty 
on imported prototypes, and the negative effects such a double-
duty has on U.S. production costs and American jobs.

               A. Current Proposed Language of H.R. 2609

     Currently, proposed H.R. 2609 recommends the following 
amendment to the legal notes to HTSUS Chapter 98 in further 
explanation of proposed HTSUS subheading 9817.85.01:

        (6) The following provisions apply to heading 9817.85.01:
         (a) The term ``prototype'' means originals or models of 
        articles that--
             (i) are either in the preproduction, production, or 
            postproduction stage and are to be used exclusively for 
            development, testing, evaluation, or quality control 
            purposes; and
            (ii) in the case of originals or models of articles that 
            are either in the production or postproduction stage, are 
            associated with a design change from current productions 
            (including a refinement, advancement, improvement, 
            development, or quality control in either the product 
            itself or the means for producing the product).
        For purposes of clause (i), automobile racing shall not be 
        considered to be ``development, testing, product evaluation, or 
        quality control,
         (b) (i) Prototypes (as defined in paragraph (a)) may only be 
        imported in limited noncommercial quantities in accordance with 
        industry practice.
             (ii) Prototypes (as defined in paragraph(a)), or parts of 
            prototypes, may not be sold (including sale for scrap 
            purposes) after importation into the United States.
         (c) Articles subject to quantitative restrictions, antidumping 
        orders, or countervailing duty orders, may not be classified as 
        prototypes under this note. Articles subject to licensing 
        requirements, or which must comply with the laws, rules, or 
        regulations administered by agencies other than the United 
        States Customs Service before being imported, may be classified 
        as prototypes, provided that they comply with all applicable 
        provisions of law and otherwise meet the definition of 
        ``prototypes'' under paragraph (a).

     B. Recommended Amendments to the Proposed Language of H.R. 2609

     In order to insure that the benefits and advantages for 
U.S. businesses inherent in H.R. 2609 are equally applied to 
all U.S. industries, Searle respectfully recommends that 
following amendments (included in bold typeface and underlined 
below) to proposed Note 6, to HTSUS Chapter 98:

         (a) The term ``prototype'' means originals, models, or trials 
        of articles that--
             (i) are either in the preproduction, production, or 
            postproduction stage and are to be used exclusively for 
            research, development, testing, evaluation, preclinical and 
            clinical trials, or quality control purposes; and
             (ii) in the case of originals, models, or trials of 
            articles that are either in the production or 
            postproduction stage, are associated with a design change 
            from current productions (including a refinement, 
            advancement, improvement, development, or quality control 
            in either the product itself or the means for producing the 
            product).

    Further, Searle would also recommend the following 
amendment to proposed HTSUS subheading 9817.85.01 (included in 
bold typeface and underlined below):

        9817.85.01: Prototypes to be used exclusively for research, 
        development, testing, product evaluation or quality control 
        purposes.

     Searle believes that the above proposed amendments to the 
tariff language and HTSUS Chapter Note currently drafted within 
H.R. 2609 would unambiguously establish that the proposed 
prototype duty-relief legislation is intended to be applied to 
all U.S. industries, including the pharmaceutical industry, 
without prejudice or distinction. Searle believes that the 
above proposed amended language would ensure that the goals of 
the Product Development and Testing Act of 1999 in protecting 
U.S. industries, leveling the playing field with foreign 
competitors, reducing the cost of product development of U.S. 
businesses which are inevitably passed on to the American 
consumer, and protecting valuable highly-skilled employees in 
the United States are universally applied to all U.S. 
industries, and do not inequitably benefit a protected segment 
of U.S. importers.

                             VI. CONCLUSION

     Searle reiterates its support for the Product Development and 
Testing Act of 1999 (H.R. 2609), and respectfully submits the above 
recommended amendments thereto. Searle welcomes any further 
participation in the development of H.R. 2609 should the Committee so 
request.

            Respectfully submitted,
                                            James L. Sawyer

Of Counsel: Kathleen M. Murphy

    bcc: Kathryn T. Harmening
      

                                


Statement of Nissan North America, Inc.

    Nissan North America, Inc. is one of the top ten U.S. 
importers by value. Through our research, design and 
manufacturing subsidiaries in Michigan, California and 
Tennessee, Nissan conducts development, evaluation and testing 
of prototype products, and directly employs 12,000 U.S. 
workers. Nissan strongly supports H.R. 2609 and urges that the 
committee adopt this measure for the following reasons.
    HR 2609 should become law because:
    Use of temporary importations under bond (TIB's) and duty 
drawback to reduce duties on prototypes is often impractical or 
inapplicable. The elimination of duties on prototypes will 
avoid the need to resort to cumbersome and unsatisfactory ways 
of reducing duties, which often places as much burden on the 
resources of Customs as it does the importer. It will also 
reduce the costs of developing and bringing to the U.S. 
consumer improved technology.
    H.R. 2609 will be of substantial value to companies 
producing motor vehicles and other products in the United 
States. U.S. producers--both domestic and internationally-
owned--rely significantly upon prototypes imported from abroad, 
as well as those made in the United States. Reliance on 
imported prototypes has helped create a common industry 
interest in eliminating the duties on these products. 
Facilitation of imported prototypes could also help strengthen 
the design and development activities of international 
automakers in the U.S. At present, Nissan employs approximately 
500 Americans at its U.S. design and research facilities, who 
regularly rely upon the import of prototype vehicles to conduct 
their business in the United States.
    H.R. 2609 should not have any injurious economic 
consequences in the U.S. motor vehicle or related industries. 
Virtually all of the production of prototypes for the U.S. 
market is conducted within the facilities of domestic and 
international motor vehicle manufacturers. There is no separate 
industry that manufactures prototypes of motor vehicles and 
that might be adversely affected by the elimination of duties 
on these products.
    H.R. 2609 is consistent with the growing trend towards the 
elimination of both U.S. and foreign duties. This is especially 
true in, but not restricted to, the automotive sector. This 
trend promotes the globalization of production, creates jobs 
and balances trade. In turn, such globalization generates 
competition by making production more efficient and encouraging 
investment in advanced technology and higher quality products.
    Duty on the value of prototypes which result in production 
vehicles imported into the U.S. is already collected through 
assessment of duty on those products at time of entry. This is 
due to the fact that the WTO Customs Valuation Code adopted by 
the U.S. and its trading partners requires that the cost of R&D 
be included in (i.e., allocated over) the price for export to 
the United States, or otherwise be added to that price, for 
duty assessment purposes. Under HR 2609, the full value of 
prototype entered duty free must still be declared at the time 
of entry. As a result, trade statistics would not be distorted, 
and indeed be improved by separating imports which generate 
U.S. jobs, promote global development and improved production 
process from imports of goods which are consumed in the U.S. 
market.
      

                                


H.R. 2648

    To amend the Tariff Act of 1930 to clarify the rules for 
treatment of international travel merchandise and bonded 
warehouses and staging areas.
      

                                


                         World Duty Free Americas, Inc.    
                                         Bayville, NY 11709
                                                    August 19, 1999

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

    Dear Sir:

    Please include the following comments in your consideration of H.R. 
2648. We submit these pursuant to your request for comments, dated 
August 12.
    Our operating unit, located near JFK International Airport, will 
realize great value from the passage of this legislation. It will 
recognize in statue what the industry has found to be most efficient.
    When carts leave an aircraft, bearing some quantity of 
international travel merchandise but needing replenishment for use on a 
subsequent flight, they are brought to a bonded warehouse for loading 
and/or unloading operations. This function is conducted in an adjacent 
area--outside the bonded warehouse; otherwise, were it to be conducted 
inside, ITM would be required to be ``entered'' and then 
``withdrawn''--a time--consuming and unnecessary step. The government 
simply wants to ensure its revenue is protected and this bill 
accomplishes that.
    The bill fixes liability and clarifies the responsibilities of the 
warehouse proprietor. At the same time, it permits us to run our 
business more efficiently.
    Please give H.R. 2648 favorable consideration. We would greatly 
appreciate its inclusion in the next miscellaneous trade package.

            Sincerely,
                                            Lawrence Caputo
                                                 VP General Counsel

cc: Rep. Amo Houghton
Rep. Mike McNulty
Rep. Charles Rangel
      

                                

                         World Duty Free Americas, Inc.    
                                    North Potomac, MD 20878
                                                    August 19, 1999

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

    Dear Sir:

    Pursuant to your Advisory No. TR-15 requesting Written Comments on 
Miscellaneous Corrections to Trade Legislation and Miscellaneous Duty 
Suspension Bills, please consider the following to be our formal 
comment.
    World Duty Free Americas, Inc., strongly supports H.R. 2648 
relating to bonded warehouse storage of international travel 
merchandise (ITM). The provision accomplishes the intent of an earlier 
such bill, H.R. 435, recently enacted by the Congress. That bill 
provided for the storage of international travel merchandise in a new 
class of bonded warehouse. This legislation specifies in more detail 
the loading and unloading of carts at the warehouse location and 
provides for greater protection to the government of its revenues. The 
bill simply codifies cart procedures that have been established for 
several years through mutual agreement between U.S. Customs and the 
trade. It establishes, with greater certainty, who has liability as the 
cart leaves the air carrier and is delivered to the bonded warehouse 
proprietor.
    The legislation, introduced by Rep. Clay Shaw, also represents the 
result of a ``good faith'' negotiation between the U.S. Customs Service 
and the private sector. Both sides fully support this legislation.
    We recommend the Committee report this provision favorably as part 
of its next miscellaneous trade provisions legislation.

            Sincerely,
                                             John P. Luksic
                                  Director of Regulatory Compliance
      

                                


                         World Duty Free Inflight, Inc.    
                             Hoffman Estates, IL 60194-1970
                                                    August 18, 1999

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

    Dear Sir:

    Please consider the following as our submission to your request for 
comments on H.R. 2648, introduced by Rep. Clay Shaw (R-FL).
    Our operating unit at Chicago O'Hare supports passage of the 
legislation because it clarifies and codifies procedures that we have 
developed over several years with the U.S. Customs Service. It is 
necessary to amend the law to allow the unique circumstances of the in-
flight duty free business to be conducted within the context of bonded 
warehouse procedures. One practice in particular, in the area adjacent 
to the bonded warehouse, is the handling of the cart containing 
international travel merchandise (ITM). The bill clarifies who is 
liable and who must maintain the bond guaranteeing the government's 
revenues. At the same time, it permits the warehouse proprietor to 
conduct these operations without the time-consuming, costly and 
unnecessary step of ``entering'' all ITM to the warehouse only to 
immediately ``withdraw'' the same merchandise a short time later.
    This legislation allows us to continue to run our business 
efficiently while allowing the government to be confident that revenue 
is protected.
    We would greatly appreciate your support for this legislation.

            Sincerely,
                                              Celeste Moran
                                                    Station Manager

cc: Rep. Phillip Crane
      

                                


                         World Duty Free Inflight, Inc.    
                                             Novi, MI 48375
                                                    August 18, 1999

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

    Dear Sir:

    The following represents our views on H.R. 2648 in response to your 
request for comments in Committee Advisory No. 15, dated August 12.
    This legislation is critical to the well-being of the in-flight 
duty free business. To operate efficiently, we cannot afford the burden 
of unnecessary regulations. H.R. 2648 permits us to load and unload 
carts destined for international flights, without having to undergo the 
wasteful and time-consuming process of ``entry'' and ``withdrawal.'' 
Nonetheless, it fixes liability and responsibility so that the bottom 
line--protection of the government's revenue--is fully met. It 
clarifies who must maintain the bond and provides for Customs to 
establish such recordkeeping requirements as are necessary for Customs' 
auditors to verify the security of our procedures. This represents a 
carefully crafted compromise between Customs and the private sector.
    Our company will greatly benefit from this legislation and we 
encourage the Committee to report the bill favorably.

            Sincerely,
                                            Robert Papelian
                                  Director of Regulatory Compliance

cc: Rep. Dave Camp
Rep. Sander Levin
      

                                


H.R. 2653

    To exempt certain entries of titanium disks from anti-
dumping duties retroactively applied by the United States 
Customs Service.

                         No comments submitted.

      

                                

H.R. 2714

    To amend the Harmonized Tariff Schedule of the United 
States to change the rate of duty for United States travelers 
bringing back to the United States goods purchased abroad.
      

                                


  International Association of Airport Duty Free Stores    
                                       Washington, DC 20036
                                                    August 23, 1999

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: H.R. 2714

    Dear Sir:

    The International Association of Airport Duty Free Stores (IAADFS) 
is pleased to respond to your request for comments on H.R. 2714, 
introduced by Reps. Crane and Dunn.
    H. R. 2714 makes a small, but important change in the duty rates 
for personal use items accompanying travelers entering the U.S.
    Currently, when U.S. residents travel outside the country, they are 
entitled upon their return to a $400 duty-free allowance for personal 
use merchandise purchased on their trip. Often however, in today's 
world, a U.S. traveler's purchases exceed the $400 limit. When this 
happens, Customs applies a flat 10% duty on the value of up to $1000 
worth of additional merchandise. This is viewed as a simple formula to 
expedite the processing of travelers and establish an approximation of 
the duties if they had been calculated on an item-by-item basis. Now, 
however, as duties in the U.S. and throughout the world tumble, the 
current rate of 10% is excessive, amounting to more than three times 
the average duty rate for commercial products.
    H.R. 2714 would, on a staged basis, reduce the duty on these 
personal items to 3% by January 1, 2002. It also proceeds to adjust the 
amount for persons arriving from American Samoa, Guam, or the Virgin 
Islands from the current 5% to a rate of 1.5% by that same date.
    The International Association of Airport Duty Free Stores (IAADFS) 
endorses H.R. 2714 and recommends that it be reported favorably by the 
Committee.
    In fact, we encourage the Committee to go one step further and take 
this opportunity to increase the $400 duty free allowance outright. 
After all, the practical result of H.R. 2714 is to expand the value of 
the allowance--that is, a returning U.S. resident can bring back $400 
worth of merchandise free of duty and an additional $1000 worth of 
purchases for a negligible duty rate of 3%. The allowance creates a 
positive environment for tourism; at the same time, it also facilitates 
the processing of passengers, eliminating the delays that returning 
Americans would encounter in reporting small amounts of duty owed, 
filling out the requisite paperwork and paying sums that do not justify 
the administrative costs of collection.
    This rationale needs to be extended to H.R. 2714. As collections 
are reduced, the cost effectiveness of collection disappears. It makes 
sense then to simply expand the duty free allowance by an appropriate 
amount, rather than to take the time and sustain the costs of 
collecting 3% of a small amount. Further, by increasing the allowance, 
you will have the corresponding effect of improving the environment for 
duty free around the world to the benefit of US businesses.
    To elaborate, the value of the increased duty free sales prompted 
by H.R. 2714, or by an increase in the overall allowance, is most 
immediately enjoyed by foreign retail entities where American tourists 
shop. Less immediate, but of great importance to US companies, is the 
promotion of duty free goals whereby governments recognize the value of 
tourism and engage in an international comity with respect to duty free 
allowances and passenger processing. Just last month, Canada increased 
its duty free allowance for its residents who have been absent from 
Canada for over 48 hours. The allowance moved to $750 from $500, an 
increase of 50%. They know that not only will their traveling citizens 
benefit, but also that it will promote the sense of reciprocity that 
accompanies such a gesture. [They also increased their allowance for 
wine, which will have significant value to US producers.]
    The US allowance has not been increased since 1983 [Public Law 97-
446]. Inflation has significantly eroded the value of the present 
limit, requiring the US to establish a more realistic level in today's 
economy. H.R. 2714 produces results that are an important step in the 
right direction. IAADFS supports this legislation. We ask also that the 
subcommittee consider also increasing the duty free allowance, now or 
at the next available opportunity.

            Sincerely,
                                         David H. Bernstein
      

                                


H.R. 2715

    To amend the Harmonized Tariff Schedule of the United 
States to provide for duty-free treatment of personal effects 
of participants entering the United States to participate in 
international athletic events, and items used in connection 
with such events.

                         No comments submitted.

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