[Federal Register Volume 68, Number 248 (Monday, December 29, 2003)]
[Notices]
[Pages 74944-74945]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-32031]


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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS


Announcement of Request for Bilateral Textile Consultations with 
the Government of the People's Republic of China and the Establishment 
of an Import Limit for Knit Fabric, Category 222, Produced or 
Manufactured in the People's Republic of China

December 23, 2003.
AGENCY: Committee for the Implementation of Textile Agreements 
(Committee).

ACTION: Notice

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EFFECTIVE DATE: December 24, 2003.

FOR FURTHER INFORMATION CONTACT: Roy Unger, International Trade 
Specialist, Office of Textiles and Apparel, U.S. Department of 
Commerce, (202) 482-4212. For information on the quota status of these 
limits, refer to the Quota Status Reports posted on the bulletin boards 
of each Customs port, call (202) 927-5850, or refer to the Bureau of 
Customs and Border Protection website at http://www.customs.gov. For 
information on embargoes and quota re-openings, refer to the Office of 
Textiles and Apparel website at http://otexa.ita.doc.gov.

SUPPLEMENTARY INFORMATION:

    Authority: Section 204 of the Agricultural Act of 1956, as 
amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as 
amended.
    On December 24, 2003, as provided for under paragraph 242 of the 
Report of the Working Party on the Accession of China to the World 
Trade Organization (Accession Agreement), the United States requested 
consultations with the Government of the People's Republic of China 
with respect to imports of Chinese origin knit fabric in Category 222. 
In accordance with paragraph 242 of the Accession Agreement and the 
procedures set forth by the Committee on May 21, 2003 (68 FR 27787), as 
clarified on August 18, 2003 (68 FR 49440), the United States is 
establishing a twelve-month limit on knit fabric in Category 222 from 
China, beginning on December 24, 2003, and extending through December 
23, 2004 at a level of 9,664,477 kilograms.
    Paragraph 2.B. of the U.S.-China Textile Visa Arrangement provides 
that if additional categories become subject to import quotas, those 
categories shall be automatically included in the coverage of the Visa 
Arrangement. This Visa Arrangement was notified to the World Trade 
Organization Textiles Monitoring Body as an agreed administrative 
arrangement on May 21, 2002. Consequently, the United States will 
require that shipments of Chinese origin knit fabric in Category 222 be 
accompanied by an export visa and Electronic Visa Information System 
(ELVIS) transmission issued by the Government of the People's Republic 
of China. In order to provide a period for adjustment, the United 
States will allow shipments of goods in this category that are not 
accompanied by an export visa and an ELVIS transmission to enter the 
United States if exported prior to January 23, 2004. However, shipments 
exported from China on or after January 23, 2004 must be accompanied by 
an export visa and ELVIS transmission issued by the Government of the 
People's Republic of China, and shipments without an export visa and 
ELVIS transmission will be denied entry.
    Paragraph 242 of the Accession Agreement allows World Trade 
Organization Members that believe imports of Chinese origin textile and 
apparel products are, due to market disruption, threatening to impede 
the orderly development of trade in these products to request 
consultations with the People's Republic of China with a view to easing 
or avoiding such market disruption. Upon receipt of the request, the 
People's Republic of China has agreed to hold its shipments to a level 
no greater than 7.5 percent (6 percent for wool product categories) 
above the amount entered during the first 12 months of the most recent 
14 months preceding the request for consultations. The Member 
requesting consultations may implement such a limit. Consistent with 
paragraph 242, consultations with the People's Republic of China will 
be held within 30 days of receipt of the request for consultations, and 
every effort will be made to reach agreement on a mutually satisfactory 
solution within 90 days of receipt of the request for consultations. If 
agreement on a different limit is reached, the Committee will issue a 
Federal Register Notice containing a directive to the Bureau of Customs 
and Border Protection to implement the negotiated limit.
    On July 24, 2003, the Committee received a request from the 
American

[[Page 74945]]

Yarn Spinners Association, American Manufacturing Trade Action 
Coalition, American Textile Manufacturers Institute and the National 
Textile Association alleging that imports from the People's Republic of 
China of knit fabric (Category 222) are, due to market disruption, 
threatening to impede the orderly development of trade in this product, 
and requesting that an Accession Agreement textile and apparel 
safeguard action be taken on imports of knit fabric. The Committee 
determined that this request provided the information necessary for the 
Committee to consider the request, and, on August 18, 2003, the 
Committee solicited public comments on the request (68 FR 49440). This 
public comment period ended on September 17, 2003. The Committee 
determined that imports of Chinese origin knit fabric are, due to 
market disruption and the threat of market disruption, threatening to 
impede the orderly development of trade in knit fabric, and that 
imports of knit fabric from China play a significant role in the 
existence and threat of market disruption. A summary statement of the 
reasons and justifications for the U.S. request for consultations 
concerning imports of Category 222 from the People's Republic of China 
follows this notice.
    A description of the textile and apparel categories in terms of 
Harmonized Tariff Schedule of the United States numbers is available in 
the CORRELATION: Textile and Apparel Categories with the Harmonized 
Tariff Schedule of the United States (see Federal Register notice 68 FR 
1599, published on January 13, 2003). Also see 67 FR 63891, published 
on October 16, 2002.

D. Michael Hutchinson,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.

Committee for the Implementation of Textile Agreements

December 23, 2003.

Commissioner,
Bureau of Customs and Border Protection, Washington, DC 20229.
    Dear Commissioner: Pursuant to Section 204 of the Agricultural 
Act of 1956, as amended (7 U.S.C. 1854); and Executive Order 11651 
of March 3, 1972, as amended, you are directed to prohibit, 
effective on December 24, 2003, entry into the United States for 
consumption and withdrawal from warehouse for consumption of knit 
fabric textile products in Category 222, produced or manufactured in 
the People's Republic of China and exported during the twelve-month 
period beginning on December 24, 2003, and extending through 
December 23, 2004, in excess of 9,664,477 kilograms.
    Paragraph 2.B. of the U.S.-China Textile Visa Arrangement 
provides that if additional categories become subject to import 
quotas, those categories shall be automatically included in the 
coverage of the Visa Arrangement. This Visa Arrangement was notified 
to the World Trade Organization Textiles Monitoring Body as an 
agreed administrative arrangement on May 21, 2002. Consequently, the 
United States will require that shipments of Chinese origin knit 
fabric in Category 222 be accompanied by an export visa and 
Electronic Visa Information System (ELVIS) transmission issued by 
the Government of the People's Republic of China. In order to 
provide a period for adjustment, the United States will allow 
shipments of goods in this category that are not accompanied by an 
export visa and an ELVIS transmission to enter the United States if 
exported prior to January 23, 2004. However, shipments exported from 
China on or after January 23, 2004 must be accompanied by an export 
visa and ELVIS transmission issued by the Government of the People's 
Republic of China, and shipments without an export visa and ELVIS 
transmission will be denied entry.
    Products which have been exported to the United States prior to 
December 24, 2003, shall not be subject to the limit established in 
this directive.
    In carrying out the above directions, the Commissioner should 
construe entry into the United States for consumption to include 
entry for consumption into the Commonwealth of Puerto Rico.
    The Committee for the Implementation of Textile Agreements has 
determined that this action falls within the foreign affairs 
exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
    Sincerely,
D. Michael Hutchinson,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.

SUMMARY OF THE REASONS AND JUSTIFICATIONS FOR U.S. REQUEST FOR 
CONSULTATIONS WITH CHINA PURSUANT TO PARAGRAPH 242 OF THE REPORT OF THE 
WORKING PARTY ON THE ACCESSION OF CHINA TO THE WORLD TRADE ORGANIZATION

Knit Fabric
Category 222
The United States believes that imports of Chinese origin knit 
fabric are, due to market disruption, threatening to impede the 
orderly development of trade in knit fabric, and that imports of 
knit fabric from China play a significant role in the existence of 
market disruption. Further, the United States believes that imports 
of Chinese origin knit fabric are, due to the threat of market 
disruption, threatening to impede the orderly development of trade 
in knit fabric, and that imports of knit fabric from China play a 
significant role in the threat of market disruption. Either finding 
supports a request for consultations with the Government of the 
People's Republic of China under Paragraph 242 of the Report of the 
Working Party on the Accession of China to the World Trade 
Organization (``Paragraph 242''). The following facts, and others 
contained in the full Statement, support these beliefs:
    U.S. Imports from China Are Increasing Rapidly in Absolute 
Terms. U.S. imports of knit fabric from China increased from 42,505 
kilograms in 2000 to over 7 million kilograms in 2002 (an increase 
of 16,396 percent) and to 9.1 million kilograms in the year ending 
in October 2003 (an increase of 21,307 percent from the 2000 level).
    U.S. Imports from China Are Increasing Rapidly Relative to Other 
Imports. In 2001, China was the 30th largest exporter of knit fabric 
to the United States. Just one year later, China was the 5th largest 
exporter. In the year ending October 2003, China surpassed Mexico, 
becoming the 4th largest exporter of knit fabric to the United 
States.
    Chinese Average Unit Values Are Well Below Values from Other 
Countries. In the year ending October 2003, the average unit value 
of knit fabric imports from China was US$5.26 per kilogram, compared 
to a ``rest of world'' average unit import value of US$6.46 per 
kilogram.
    U.S. Imports from China Are Likely to Increase Further in the 
Near Future. China is the world's largest textile machinery 
importing country. Between January and May 2003, China imported $1.8 
billion worth of textile machinery, an increase of 71 percent 
compared to the same period last year. According to Chinese Customs 
data, China imported over US$243 million of knitting machines in the 
first five months of 2003 - an increase of over 105.4 percent over 
the same period in 2002.
    The U.S. Knit Fabric Industry Is Vulnerable to Any Increase in 
Imports. U.S. production of knit fabric fell 27 percent from 2000 to 
2002 (from 657,040 kilograms to 479,960 kilograms), while the share 
of the market held by U.S. producers fell by 9.6 percentage points 
(from 86.9 percent to 77.3 percent) during this period.


[FR Doc. 03-32031 Filed 12-24-03; 8:45 am]
BILLING CODE 3510-DR-S