WASHINGTON — President Bush signed a comprehensive trade and tax bill Wednesday that gives permanent normal trade relations to Vietnam and extends duty free benefits to companies that produce apparel in sub-Saharan Africa, the Andean region and Haiti.
“The Tax Relief and Health Care Act of 2006 will maintain key tax reforms, expand our commitment to renewable energy resources, make it easier for Americans to afford health insurance and open markets overseas for our farmers and small business owners,” Bush said during the signing ceremony in the Dwight D. Eisenhower Executive Office Building.
In addition to helping Vietnam strengthen its economy, Bush said the bill would boost U.S. exports. “By encouraging exports, we’re going to help nations in sub-Saharan Africa, the Caribbean and Latin America develop their economies and ultimately create new markets for U.S. goods and services,” he said.
The sweeping legislation, which affects $6.4 billion in apparel and textile imports, was the last act of the Republican-controlled Congress before it adjourned for the year.
GOP leaders overcame opposition from a bloc of southern textile-state lawmakers in the House and a group of eight southern, textile-state senators who opposed expanded apparel trade benefits for Haiti, as well as some bipartisan opposition to granting Vietnam elevated trade status.
The House passed the bill 212-184, and the Senate approved it 79-9.
Importers and retailers producing apparel in Africa, Haiti and the four Andean nations of Peru, Colombia, Bolivia and Ecuador have said the legislation will provide certainty in sourcing, but last-minute assurances and commitments before the vote have clouded their sourcing picture.
Textile executives maintained the bill would displace millions of dollars of U.S. fabric and yarn exports in the Caribbean and lead to more job losses because it loosens rules governing which imported fabrics must be used in apparel production in Haiti and opens the door to Chinese fabrics.
Importers are still concerned about committing orders to Vietnam — even though quotas on apparel and textile imports will be eliminated on Jan. 11 when Vietnam joins the World Trade Organization — because of a commitment the Bush administration made to Sens. Lindsey Graham (R., S.C.) and Elizabeth Dole (R., N.C.) to monitor Vietnamese imports and possibly undertake antidumping cases.
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Importers are still seeking clarifications from the administration on what kind of Vietnamese apparel and textile imports will be monitored and assurances that the new program will not establish more burdens for apparel and textile importers and exporters. Companies are also asking the administration to ensure that any antidumping cases would fully comply with U.S. law, which makes it difficult for the domestic textile industry to bring cases seeking punitive tariffs on imports.
Companies and industry representatives must file public comments to the administration by Dec. 27.
Separately, a promise made by Sen. Max Baucus (D., Mont.), the new chairman of the Senate Finance Committee, could delay the expanded apparel trade benefits for Haiti as long as a year and force companies producing apparel there to wait longer for the benefits to kick in. However, the new pledge could help domestic textile firms and lawmakers work with Customs & Border Protection agents to improve the system for monitoring shipments that might contain transshipped apparel items from China.
Baucus said he would seek to amend the omnibus bill next year to give the President as much as one year to certify the benefits for Haiti. He has also pledged to hold a hearing on the benefits for Haiti and on the impact on the U.S. textile industry.