[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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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.
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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.
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\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\
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\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.
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\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.
[GRAPHIC] [TIFF OMITTED] T0253.004
[GRAPHIC] [TIFF OMITTED] T0253.005
[GRAPHIC] [TIFF OMITTED] T0253.006
[GRAPHIC] [TIFF OMITTED] T0253.007
[GRAPHIC] [TIFF OMITTED] T0253.008
[GRAPHIC] [TIFF OMITTED] T0253.009
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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