Apparel Imports

APPAREL IMPORTS -- (Senate - December 08, 2006)

Mrs. FEINSTEIN. Mr. President, I rise today to discuss the assurances my friend and colleague from Oregon and I have received from U.S. Trade Representative, USTR, Susan Schwab and Assistant Secretary of Commerce David Spooner about the import monitoring program on Vietnamese textiles and apparel. In response to concerns raised by Senator Dole and Senator Graham about the impact of Permanent Normal Trade Relations, PNTR, for Vietnam, Ambassador Schwab and Secretary of Commerce Carlos Gutierrez wrote a letter stating their intention to monitor U.S. textile and apparel imports from Vietnam and self-initiate antidumping investigations if the normal elements of an antidumping case can be demonstrated. The Commerce Department will conduct a review every 6 months, and the program will last until the end of this administration. I ask the Senator from Oregon if he is aware of the concerns that have been raised about this program.

Mr. SMITH. I am aware of the concerns, and I want to thank the senior Senator from California for her leadership on this issue. The apparel industry is a very important segment of Oregon's economy, and my constituents back home are watching this issue very closely. There is a great deal at stake here for Oregon companies such as Nike, Inc., and Columbia Sportswear that source apparel from Vietnam. These companies provide thousands of well-paying jobs to workers in my State and infuse billions of dollars into Oregon's economy. I have heard from them and other U.S. retailers about the impact the proposed monitoring program will have on their businesses as unilateral actions such as this can have a significant chilling effect on companies' sourcing strategies.

Unfortunately, the administration did not give the apparel and retail industry due consideration in its decision to monitor textile and apparel products from Vietnam. I am disappointed that the administration chose to use our trade remedy laws as a tool in the legislative process and not consult with other Members of Congress or the retail industry before agreeing to create a new monitoring process. I share the concerns of my constituents that this program will burden and discriminate against trade in textiles and apparel from Vietnam.

I was pleased that the senior Senator from California agreed to send a letter with me to USTR and Commerce asking for assurances that the program would be implemented in a manner fully consistent with U.S. law and our obligations in the World Trade Organization, WTO, and that no new precedent would be set; the program would not establish any additional burdens for importers and exporters of Vietnamese textiles and apparel; and U.S. textile and apparel importers and retailers will have the opportunity to review and comment on how the program is developed.

Mrs. FEINSTEIN. I agree with the Senator from Oregon's description of our concerns and the assurances we are seeking from the administration. This matter was first brought to my attention by key retail constituents in my State including companies like Gap, Inc., Liz Claiborne, and Limited Brands. Retailers have expressed their concern that the import monitoring program would create too much unpredictability and force companies to modify their sourcing strategies and accept the risk of and potential additional cost of antidumping investigations and antidumping duties. They share the concern expressed by the Senator from Oregon that the retail industry was not consulted before the administration committed to setting up the program. I was happy to join the Senator from Oregon on the letter to USTR and Commerce, and I had hoped that we would receive a response before a vote on PNTR on the Senate floor. Is it the Senator's understanding that we will not receive a response to our concerns before the vote?

Mr. SMITH. It is my understanding that lawyers from USTR and Commerce have advised Ambassador Schwab and Secretary Gutierrez that because a notice has been placed in the Federal Register announcing the creation of the import monitoring program and soliciting public comment, they cannot provide a substantive written response to our letter. Nevertheless, Ambassador Schwab and Assistant Secretary of Commerce Spooner graciously agreed to meet with the Senator from California and me to provide us with more information about the import monitoring program and how it will be implemented.

Mrs. FEINSTEIN. The Senator from Oregon is correct. We had a robust and substantive discussion. Ambassador Schwab and Assistant Secretary Spooner assured us that the import monitoring process will be fully consistent with U.S. law and applicable WTO rules. No new precedent would be set. In addition, they also agreed that the import monitoring process should not harm U.S.-Vietnam textile and apparel trade, and they assured us that no additional reporting requirements or other burdens would be placed on importers of textiles and apparel from Vietnam. This means that it is their intention that monitoring will be based upon information already collected in the normal customs entry process or otherwise available to the Government. Finally, they assured us that the views of our constituents and all Members of Congress would be taken into account as the process is developed. Is that the Senator's understanding?

Mr. SMITH. Mr. President, the Senator from California is correct. Specifically, USTR and Commerce told us that it is their intention that any investigation would only cover those textile and apparel products imported from Vietnam which are like or identical to a product also produced in the United States. This also means that, consistent with U.S. law, the domestic producer will have to request monitoring and supply information about their employment levels and production. This makes sense to me because why would the U.S. Government monitor a product from Vietnam that is not produced in the United States or that the U.S. domestic industry is not interested in being monitored in the first place? It is also my understanding that according to U.S. law, any finding of critical circumstance, which would trigger preliminary antidumping duties, would only be made during the course of an investigation and not in advance of an investigation.

Mrs. FEINSTEIN. Mr. President, I appreciate the Senator's commitment and hard work on this issue. With the assurances from Ambassador Schwab and Assistant Secretary Spooner, I will support legislation granting permanent normal trade relations status to Vietnam. Would the Senator from Oregon agree that we will continue to follow this process closely to ensure that USTR and Commerce live up to their commitments and implement this program in a manner that is fully consistent with U.S. law and our WTO obligations?

Mr. SMITH. Mr. President, I agree with the senior Senator from California, and I would like to thank her for standing with me on this important matter. I too will support PNTR for Vietnam. Both of us are committed to a strong and mutually beneficial United States-Vietnam trade relationship. Both of us understand how important the vibrant and growing Vietnam market is to our constituents. I look forward to working with the senior Senator from California to provide effective oversight of the monitoring program and ensure that the voice of retailers across the country are heard in the discussion of U.S. trade policy. I trust Ambassador Schwab when she told us that she intends to have this monitoring process work in the way we discussed in our meeting. As the senior Senator from California knows, we have many difficult trade initiatives that we will consider next year. I, for one, will measure my willingness to work with the administration on these upcoming initiatives, in part, based on the good faith of the administration in implementing this monitoring process in a fair and normal way.

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