[Congressional Record (Bound Edition), Volume 145 (1999), Part 20]
[Senate]
[Pages 29141-29142]
[From the U.S. Government Publishing Office, www.gpo.gov]



                   TRADE AND DEVELOPMENT ACT OF 1999

  Mr. LIEBERMAN. Mr. President, I rise today to make additional remarks 
on a provision contained in the Manager's Amendment to the Trade and 
Development Act of 1999 adopted last week by voice vote. The manager's 
included a Sense of the Senate on Tariff Inversions that has raised 
some concerns with several of my colleagues. I would like to engage 
them in a discussion of the issue on the floor of the United States 
Senate.
  There is a company in my state, The Warren Corporation, that 
specializes in the manufacture of high quality woolen and worsted 
apparel fabric. This company has been producing luxurious fabrics for 
decades and recently invested heavily in the U.S. to become a fully 
integrated textile mill with a diverse set of manufacturing operations. 
I mention Warren today because this proud contributor to the New 
England textile heritage could be adversely affected by a tariff 
provision recently adopted by voice vote in the Manager's Amendment to 
the Trade and Development Act of 1999. I would like to call on some of 
my esteemed colleagues who I am sure have similar concerns in their 
states. Senator Helms, is it not true that you have thousands of 
workers in the textile industry that could be adversely affected by 
this legislation.
  Mr. HELMS. Mr. President in responding to the distinguished Senator 
from Connecticut, it is certainly true that North Carolina is the 
largest of the nation's textile and apparel states in terms of 
employment. In fact, North Carolina employs over 200,000 workers in 
this industry, many of which are directly involved in wool fabric 
production. For that reason, I share his deep interest in this wool 
fabric issue. I want to make it clear that any such legislation would 
institute a unilateral tariff reduction on the part of the U.S. I do 
not believe that it is wise policy for the U.S. to simply reduce 
important tariffs and gain nothing in return. These same fabric makers 
are essentially precluded from shipping their products to many key 
markets overseas. My point is simply, if we want to consider reducing 
these duties, it would be better done as part of the upcoming World 
Trade Organization talks later this month in Seattle. At the very 
least, in that forum we would have the ability to gain some reciprocal 
market access to our manufacturers.
  Mr. DODD. Mr. President, I rise to also express my concern in regard 
to this wool fabric issue. Like my colleague from Connecticut, I have 
great respect for the workers and employers in the textile sector in my 
state. In particular the Warren corporation was mentioned. Eleven years 
ago, this company invested over $40 million in an abandoned textile 
factory in Stafford Springs, Connecticut. For several years they 
operated at a loss as they fought for market share here in the U.S. 
However, they understood that if they produced a quality product at 
reasonable price, they would succeed. Today they are one of the most 
respected suppliers of fine grade wool fabrics in the world, and they 
are providing nearly 300 jobs in a depressed area of my state. This is 
the type of investment and the type of jobs that we want to attract to 
our region. As a result, we in Congress need to be very careful about 
proposals that would cut the legs out from under a company such as 
Warren. Instead of unilaterally cutting their tariffs, we should be 
searching for ways to further encourage such investment.
  Mr. CAMPBELL. Mr. President, I too have an interest in this matter, 
but from a different angle. The U.S. fabric industry consumes virtually 
all the wool fiber produced in the United States. My home state is a 
significant producer of wool. If we approve legislation that damages 
fabric makers, it will have a direct and adverse impact on wool 
growers. The growers in my state are already suffering from surging 
imports of lamb meat. In addition, the price of their wool has been 
severely depressed due to the fact that wool from Australia and New 
Zealand is routinely dumped on the world market. As a result, I am on 
the record as strongly opposing any legislation that cuts U.S. wool 
fabric duties. It is critical that in the discussions of this issue 
members from the wool producing regions are fully informed and 
involved. We simply cannot accept a move that would take steps to 
appease suit makers without fully understanding and considering the 
impact of such legislation all the way down the chain--from fabric 
makers to wool growers.

[[Page 29142]]


  Mr. THOMAS. Mr. President, I rise to fully support the remarks of my 
colleague from Colorado. The wool fiber industry in my state is 
critical to our overall state economy,
  Mr. LIEBERMAN. And Senator Thomas, am I correct in noting that 23 
distinguished members of this body submitted a letter to the Chairman 
of the Finance Committee earlier this year expressing concern over 
legislation that would threaten domestic textile producers?
  Mr. THOMAS. That is correct. I was one of 23 signatories of a letter 
dated April 16, 1999, that provides several reasons why unilateral 
tariff reductions should be avoided. First, wool fabric similar to the 
foreign imported product, subject to tariffs, is already available from 
domestic producers. Second, this is not the appropriate time to address 
accelerated tariff reductions as wool fabric tariffs are currently 
being reduced at the multilateral level. U.S. producers and textile 
companies have made investments and based business decisions on trade 
negotiations that were reached under the North American Free Trade 
Agreement (NAFTA) and the World Trade Organization (WTO). If we are to 
consider additional tariff reductions, those discussions should occur 
during trade negotiations, instead of being legislated on the floor of 
the U.S. Senate. U.S. manufacturers are the only customers domestic 
wool growers have; virtually no wool is exported. Wyoming is the second 
largest wool producing state and because of already depressed wool 
prices, our growers can not break even, let alone turn a profit. 
Accelerating wool fabric tariff cuts, at this time, will only further 
decrease fiber prices and sales, consequently putting U.S. wool growers 
and textile workers at risk. I thank my colleague, Senator Lieberman, 
for his work on this crucial issue.
  Mr. LIEBERMAN. I thank my colleague from Wyoming for his kind words. 
On November 3, I presented legislative background on the wool tariff 
provision to reflect the concerns of my constituents about any revision 
to tariff reduction and phase-out schedules that would unfairly alter 
their competitive posture and force layoffs. Specifically, I noted that 
the language in the provision as originally proposed dinting the 
inclusion of the wool fabric industry was purposely deleted in the 
version that passed in the Manager's Amendment, underscoring the 
Senate's clear intent that this provision is not directed at this 
sector.
  Second, the provision specifically requires that full account be 
taken of ``conditions'' in the various ``producing industry in the 
United States,'' indicating that whatever further action Congress may 
want to consider in the future on this issue, or that the U.S. Trade 
Representative may raise in future negotiations, must assure fairness 
and equitable treatment to those currently producing in the United 
States. Furthermore, the language specifically states that special 
attention and equity is to be provided to ``those currently facing 
tariff phase-outs negotaited under prior trade agreements.'' Since my 
constituents in the wool fabrication sector specifically fall into 
exactly that posture, property relying on phase-out schedules 
negotiated in prior trade agreements, this protection and assurance is 
directed at their concerns, which, in turn, is why their industry 
sector was dropped from application of this provision.
  Senator Helms, is it not true that Senators Moynihan and Roth 
provided assurances that I would be given full notice of any 
consideration of this issue in conference and that it will be resolved 
in a manner satisfactory to me in representative of my constituents 
concerns?
  Mr. HELMS. That is my understanding of your verbal agreement with the 
managers of the bill.
  Mr. LIEBERMAN. Mr. President, we have reiterated our concerns 
concerning the wool tariff provision with the hope that the leadership 
will find a way to support the views of nearly one quarter of the 
Senate. I ask unanimous consent to print in the Record a letter from 
April 16, 1999, from 23 Senators opposed by any changes in wood tariffs 
addressed to Senator Roth.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                  U.S. Senate,

                                   Washington, DC, April 16, 1999.
     Hon. William Roth
     Chairman, Finance Committee, U.S. Senate, Washington, DC.
       Dear Mr. Chairman: We write to express strong opposition to 
     S. 218, which is designed to reduce some and eliminate other 
     existing U.S. tariffs on certain types of wool fabric. This 
     bill is virtually identical to legislation introduced last 
     Congress, which drew widespread, adverse reaction from U.S. 
     producers of wool fiber, top, yarns, and fabrics, as well as 
     many in Congress.
       Our continued opposition to this legislation is based on a 
     number of factors:
       The fabric types covered by S. 218 are readily available 
     from U.S. producers.
       Wool fabric tariffs are already in the process of being 
     reduced, and as such there is no need for these additional, 
     unilateral cuts. In 1995 the WTO/Uruguay Round instituted a 
     phased 30% tariff reduction and import quota elimination for 
     the same products covered by S. 218.
       Based on the trade laws and tariffs in place as a result of 
     the Uruguay Round/WTO and the NAFTA, hundreds of millions of 
     dollars in investments were made by the domestic wool fabric 
     industry to try to help ensure their survival. Changing the 
     rules of the game now by making additional, unforeseen tariff 
     cuts will undermine the integrity of these trade rules/
     agreements and destroy these investments.
       In preparation for the new WTO Round, the U.S. is 
     participating in multilateral trade talks this year. Rather 
     than sanctioning additional, unilateral U.S. tariff cuts, 
     Congress should instead instruct the Administration to focus 
     on improving foreign market access for U.S. produced wool 
     fabric and other textile products during these talks. We 
     believe that even those in Congress who may favor tariff 
     cuts, would understand that doing so outside the WTO 
     negotiating context is not in the best interests of the 
     United States, since there would be no possibility of using 
     these or any other cuts as a bargaining tool to get trade 
     concession in return.
       These proposed cuts would have an extremely severe impact 
     on the approximately 90,000 U.S. workers whose livelihoods 
     are directly tied to the production of wool textiles.
       The unilateral giveaway of U.S. wool fabric tariffs 
     mandated under S. 218 comes at a time when imports are 
     already at record levels. Adding to the current import crisis 
     in this sector is the fact that many Asian suppliers are 
     exporting these fabrics well below 1997 prices as a result of 
     the economic crisis in that region.
       The flood of low cost imports has forced U.S. companies to 
     lay-off over 1,600 wool yarn and fabric workers in January 
     1999, alone. This is the continuation of a devastating trend 
     whereby nearly one-third of all U.S. wool yarn and fabric 
     jobs have been lost in recent years. Certainly, passage of S. 
     218 will result in the loss of thousands of additional jobs.
       U.S. woolgrowers produce fine wools that go into the 
     fabrics covered by S. 218. U.S. wool, top, yarn, & fabric 
     manufacturers are the only customers U.S. woolgrowers have; 
     virtually no wool is exported. Due to surging wool textile 
     and apparel imports, U.S. wool fiber sales and prices have 
     been extremely depressed. Wool fabric tariff cuts will leave 
     woolgrowers with an even more diminished customer base for 
     their wool fiber, at a time when the lamb meat portion of 
     their business is also being severely harmed by increased 
     lamb meat imports.
       For these reasons, we believe that you should oppose S. 
     218. Specifically, we encourage you to block the inclusion of 
     this legislation as part of any trade bill or other 
     legislation that your committee may approve in the 106th 
     Congress. Thank you for your consideration of our views on 
     this important matter.
           Sincerely,
         Larry E. Craig; Mike Enzi; Olympia Snowe; Mike Crapo; Ben 
           Nighthorse Campbell; John Warner; Chuck Robb; Fritz 
           Hollings; Susan Collins; Conrad Burns; Max Baucus; 
           Craig Thomas; Pete V. Domenici; Joe Lieberman; Richard 
           Shelby; Robert F. Bennett; Strom Thurmond; Jesse Helms; 
           John Edwards; Tim Johnson; Jeff Bingaman; John H. 
           Chafee; Jeff Sessions.

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