[Congressional Record Volume 145, Number 153 (Wednesday, November 3, 1999)]
[Senate]
[Page S13791]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              WOOL TARIFFS

  Mr. MOYNIHAN. Mr. President, a moment on a matter that is not 
included in the trade legislation that has just been approved by the 
Senate--the near-exorbitant tariff on fine wool fabrics. This modest 
proposal appears to have generated an inordinate amount of controversy, 
all the more baffling because the facts are so persuasive.
  We have just a few suit manufacturers left in the United States, 
including Hickey-Freeman, which has produced fine tailored suits in 
Rochester, New York since 1899. Our tariffs are stacked against them.
  There is only a limited supply in the United States of fine wool 
fabric. The suit makers must import significant quantities of this 
fabric, at a current tariff rate of 30.6%. But importers can bring in 
completely finished wool suits duty free from Canada and Mexico, and 
subject to a 19.8% duty when imported from other sources. This anomaly 
in our tariff schedule--this tariff ``inversion''--puts domestic 
manufacturers of wool suits at a significant disadvantage.
  Senators Schumer, Durbin, Hagel, Mikulski, Specter, Nickles, 
Fitzgerald, Santorum, Gramm, and Thompson have joined me in sponsoring 
a very modest measure that would provide temporary relief to the suit-
makers. We have proposed that the tariff on the very finest wool 
fabric--produced in only limited quantities in the United States--be 
suspended for a short period, and that the tariff on other classes of 
fine wool fabric be reduced to 19.8%--hardly a negligible tariff. This 
was an effort to provide some relief to our suit makers.
  Through the good offices of the Chairman of the Finance Committee, we 
undertook to address the concerns that has been raised when our bill 
was first introduced. After a series of meetings with all of the 
interested parties--and there are many--we modified our proposal to 
address, in a constructive way, the concerns that were raised.
  Our first compromise proposal was rejected out of hand. No 
counterproposal was forthcoming. The objection stems chiefly from two 
sources: a fabric manufacturer that is not currently producing the fine 
wool fabric at issue--but promises to do so in the future, principally 
from a plant it is building in Mexico; and from the American Sheep 
Industry Association--this despite the fact that wool of the quality 
required for suit fabric is sourced overwhelmingly from Australia.
  I am at a loss to explain the vehemence of the opposition. The fabric 
producer that so strongly opposes this legislation--Burlington 
Industries--is positioning itself to compete in the global market. As 
it ought to do.
  On January 26, 1999, the company announced a major reorganization. To 
quote, ``operations will be streamlined and U.S. capacity will be 
reduced by 25%.'' Let me repeat: ``U.S. capacity will be reduced by 
25%.'' The company announced that 2900 jobs would be eliminated, an 
announcement made just one month after the company reported to its 
shareholders--on December 2, 1998, that ``we have launched a major 
growth initiative in Mexico.''
  There followed an announcement to its customers that the fine wool 
fabric used to manufacture men's suits--so called ``fancies''--would 
not be available for a time.
  Even so, we cannot get agreement on tariff relief for our suit 
makers, who have greater need than ever for imported fabric. They must 
still pay a 31% tariff on imported fine wool fabric. We ought to enable 
them to remain competitive, just as Burlington has taken steps to 
remain competitive.
  We have kept at it. In recent days, our efforts have intensified. 
With a great deal of good will on the part of all interested parties, 
it appears that we may be inching toward an agreement that would, in 
fact, benefit all parties in some measure.
  We have included a place-holder in the trade legislation--not a 
solution to the wool tariffs problem, but a provision that will allow 
our discussions to continue over the next several days.
  I do thank the chairman and his staff--particularly Grant Aldonas--
for their efforts, as well as the considerable interest and attention 
of Senators Durbin, Schumer, and Baucus, all of whom are eager, as am 
I, to work this out. I intend to continue to work with our chairman and 
with others to resolve this matter.

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