WASHINGTON — Congress gave retailers and importers producing apparel in several developing countries a little more certainty in sourcing as it passed an omnibus trade and tax measure on Saturday before it adjourned for the year.
Republican leaders, who will relinquish control to Democrats in both chambers next year, overcame opposition to some of the trade provisions in the bill in both the House and Senate. The House passed the bill by 212-184 Friday evening with the support of leaders in both the Democrat and Republican parties. In a lopsided vote, the Senate passed the comprehensive measure by 79-9 early Saturday morning.
GOP leaders were able to overcome opposition from a bloc of southern textile-state lawmakers in the House who opposed expanded apparel trade benefits for Haiti and bipartisan opposition over granting Vietnam elevated trade status. Ultimately, it was a compromise struck between House and Senate negotiators that included several tax breaks that pushed the final bill — which affects a total of $6.4 billion in apparel and textile imports — over the finish line.
The legislation, which now goes to the President’s desk for his signature, grants permanent normal trade relations to Vietnam, allowing U.S. exporters to gain full access to the benefits of the Southeast Asian country’s accession to the World Trade Organization. It also extends apparel benefits for expiring trade preference programs for the sub-Saharan African countries, the Andean countries of Peru, Colombia, Ecuador and Bolivia, and the generalized system of preferences program.
In addition, the legislation creates new and expanded benefits and rules of origin for apparel production in Haiti and suspends and reduces duties on hundreds of imported products that were covered in a miscellaneous tariff bill.
“Passage of this important piece of legislation enables the stable and beneficial linkages between U.S. apparel, footwear and textile companies and their partners in countries throughout the Western Hemisphere, Africa and Asia to not only continue, but to grow in the future,” said Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, in a statement. “I applaud the House and Senate leadership for crafting a bipartisan trade package and steering it successfully through Congress before it adjourned for the year.”
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The combined amount of apparel and textile import business from Africa, the four Andean countries, Haiti and Vietnam is $6.4 billion, according to the Commerce Department’s Office of Textiles & Apparel. Imports from Africa fell 16.9 percent for the year ended Sept. 30, while imports from the Andean region fell 7 percent, indicating that some U.S. companies were pulling apparel production out of those countries due to the uncertainty of whether Congress would preserve and expand the trade preference programs, industry experts said.
“It’s a positive story,” said Brenda Jacobs, counsel for the U.S. Association of Importers of Textiles & Apparel. “GSP will continue without a lapse, [African countries] can start picking up some business and the Andean region will have some continuity.
“Given all of the uncertainty in Asia, the more business people can put in just-in-time orders in the Western Hemisphere, which is a supplement,” the better, Jacobs added.
Critics said the legislation would displace millions of dollars in U.S. fabric and yarn exports, and lead to more job losses.
Rep. Robin Hayes (R., N.C.) who led the charge in the House against the overall package because it includes benefits for Haiti, called the legislation “ill conceived” and said it would open loopholes for China. “This harmful bill would allow Haiti to ship millions of dollars worth of textile and apparel products to the U.S. duty-free, products made with Chinese fabrics and yarns,” Hayes said in the floor debate Friday night. “There is no doubt in my mind that this places at risk many of the 700,000 textile and apparel jobs we have remaining our in our country.”
Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said, “There are folks who would say Haiti is so bad we will have to proactively engage Congress next year to come up with ways to mitigate the damage.”