WASHINGTON — House GOP leaders pulled the plug on a legislative trade package scheduled for a vote today after several textile-state representatives raised concerns about the bill’s potential impact on U.S. textile producers.
The bill, introduced by Ways and Means Chairman Bill Thomas, R-Calif., would have given extensive duty free benefits to several sub-Saharan African countries, as well as Haiti.
“It is not likely to be voted on the floor this week,” said a senior House Republican aide, who requested anonymity. “There were some concerns raised by members from states that have textile industries.”
The aide said “no decision” had been made on whether the bill would be brought up again this year. A group of House Textile Caucus members met with the leadership Friday to voice “serious concerns” about Thomas’ bill, according to Carolyn Hern, communications director for Rep. Robin Hayes (R-N.C). Hayes and other members received an assurance from House leaders that they would not bring the bill up for a vote this week, Hern said.
Congress adjourns at the end of the week for campaigning for the midterm elections, in which all of the House seats are at stake. Congress is expected to return Nov. 13. Thomas’ bill addressed several trade preference programs benefitting U.S. importers that are expiring at the end of the year, and the prospects for renewal are now uncertain. Rep. Charles Rangel, D- N.Y., the ranking Democrat on Ways and Means, urged House leaders to put the Thomas bill back on the calendar for a vote this week to prevent the trade preference programs from expiring.
“The industry did not have time to review the bill properly, to comment on it and to work with Ways and Means to make sure that this legislation was not a detriment to our domestic textile industry,” said Hern. “U.S. Customs has admitted that with [a value-added rule of origin] they will not be able to determine if yarn and fabric from any garment [imported] from Haiti was actually produced in Mexico, Peru or China. The bill [as it is written now] would open the doors to huge amounts of fraud at the expense of U.S. textile jobs.”
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Thomas’ bill would allow several sub-Saharan African countries to continue using fabric and yarns from anywhere in the world, known as “third-country fabric” benefits. The proposal also would allow Haiti the use of foreign-fabric allowances, which annoyed U.S. textile trade and lobbying associations.
The Thomas bill extends existing third-country fabric benefits to sub-Saharan African countries through September 2008. After that, the rule of origin would change and require that at least 50 percent of the value of materials and processing be in the region. These materials could be from eligible sub-Saharan African countries, the U.S. or countries where the U.S. has free trade agreements or trade preference programs. The bill would enhance duty free benefits for Haiti.
The National Council of Textile Organizations and American Manufacturing Trade Action Coalition came out in opposition to the trade package when it was introduced last week, arguing the foreign fabric allowances would open the back door to Chinese fabrics and yarns, displace U.S. export business and lead to more job losses. They also argued the bill would be unenforceable because U.S. Customs and Border Enforcement does not have the resources to monitor the processing in Africa or Haiti to determine whether 50 percent of the value of the goods is from the designated country.