[Federal Register Volume 66, Number 206 (Wednesday, October 24, 2001)]
[Notices]
[Pages 53779-53781]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26780]
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DEPARTMENT OF COMMERCE
International Trade Administration
Notice of Solicitation of Comments on Modification of Worsted
Wool Fabric Tariff Rate Quotas
AGENCY: Department of Commerce, International Trade Administration.
ACTION: Notice of solicitation of comments on requests for modification
of tariff rate quota limitations on the import of certain worsted wool
fabrics.
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DATES: To be considered, comments must be received or postmarked by 5
p.m. November 13, 2001.
ADDRESSES: Comments must be submitted to: Deputy Assistant Secretary
for Textiles, Apparel and Consumer Goods Industries, Room 3001, United
States Department of Commerce. Washington, D.C. 20230. Six copies of
comments should be submitted.
FOR FURTHER INFORMATION CONTACT: Sergio Botero, Office of Textiles and
Apparel, U.S. Department of Commerce, (202) 482-4058.
SUPPLEMENTARY INFORMATION: The Department of Commerce (Department)
hereby solicits comments on requests for an increase in the limitations
on the quantity of imports of certain worsted wool fabric under the
2002 tariff rate quotas established by the Trade and Development Act of
2000. To be considered, comments must be received or postmarked by 5:00
p.m. November 13, 2001 and must comply with the requirements of 15 CFR
340 (66 FR 6459, published January 22, 2001). Thirty days after the end
of the comment period, the Department will determine whether the
limitations should be modified.
1. Background
Title V of the Trade and Development Act of 2000 (the Act) creates
two tariff rate quotas, providing for temporary reductions in the
import duties on two categories of worsted wool fabrics suitable for
use in making suits, suit-type jackets, or trousers. For worsted
[[Page 53780]]
wool fabric with average fiber diameters greater than 18.5 microns
(Harmonized Tariff Schedule of the United States (HTS) heading
9902.51.11), the reduction in duty is limited to 2,500,000 square
meters per year. For worsted wool fabric with average fiber diameters
of 18.5 microns or less (HTS heading 9902.51.12), the reduction is
limited to 1,500,000 square meters per year. Both these limitations may
be modified by the President, not to exceed 1,000,000 square meters per
year for each tariff rate quota.
The Act requires the annual consideration of requests by U.S.
manufacturers of men's or boys' worsted wool suits, suit-type jackets
and trousers for modification of the limitations on the quantity of
fabric that may be imported under the tariff rate quotas, and grants
the President the authority to proclaim modifications to the
limitations. In determining whether to modify the limitations,
specified U.S. market conditions with respect to worsted wool fabric
and worsted wool apparel must be considered. On January 22, 2001, the
Department published regulations establishing procedures for
considering requests for modification of the limitations. 66 FR 6459,
15 CFR 340.
On September 14, 2001, the Department published a notice in the
Federal Register soliciting requests for modification of the 2002
tariff rate quota limitations. The Department received four such
requests from the following: Hartmarx Corporation (on its own behalf,
on behalf of its wholly-owned subsidiaries including Hickey-Freeman,
and on behalf of the Tailored Clothing Association); Hartz & Company,
Inc.; Hugo Boss; and Tom James Company. These requests were for the
maximum increase (1,000,000 square meters) in each of the two tariff
rate quota limitations (HTS 9902.51.11 and HTS 9902.51.12). A summary
of these requests is provided below. The full text of the request and
exhibits, with the exception of business confidential information, is
available for inspection between 9:00 a.m. and 4:30 p.m. in Room 2233,
United States Department of Commerce, 1401 Constitution Avenue,
Washington D.C. 20230.
Comments may be submitted by any interested person, including U.S.
manufacturers of worsted wool fabric, wool yarn, wool top and wool
fiber. Comments must comply with the requirements of 15 CFR 340. If the
person submitting comments is a domestic producer of worsted wool
fabric, comments should include, to the extent available, the following
information for each limitation with respect to which comments are
being made: 1) A list of domestic manufacturers of worsted wool suits,
suit-type jackets, or trousers for whom orders were filled during the
period July 1, 2000 to June 30, 2001, the date of such orders, the
total quantity ordered and supplied in square meters of domestically
produced worsted wool fabric and of imported worsted wool fabric, and
the average price received per square meter of domestically produced
worsted wool fabric and of imported worsted wool fabric for such
orders; 2) A list of all requests to purchase worsted wool fabric
during the period July 1, 2000 to June 30, 2001 that were rejected by
the person submitting the comments, indicating the dates of the
requests, the quantity requested, the price quoted, and the reasons why
the request was rejected; 3) Data indicating the increase and/or
decrease in production and sales for the period January 1, 2001 to June
30, 2001 and the comparable six month period in the previous year of
domestically-produced worsted wool fabrics used in the production of
worsted wool suits, suit-type jackets and trousers; 4) Evidence of lost
sales due to the temporary duty reductions on certain worsted wool
fabric under the tariff rate quotas; and 5) Other evidence of the
ability of domestic producers of worsted wool fabric to meet the needs
of the manufacturers of worsted wool suits, suit-type jackets and
trousers in terms of quantity, variety, and other relevant factors.
Comments must be accompanied by a statement by the person
submitting the request (if a natural person), or an employee, officer
or agent of the legal entity submitting the request, with personal
knowledge of the matters set forth therein, certifying that the
information is complete and accurate, signed and sworn before a Notary
Public, and acknowledging that false representations to a federal
agency may result in criminal penalties under federal law. Any business
confidential information provided that is marked business confidential
will be kept confidential and protected from disclosure to the full
extent permitted by law. To the extent business confidential
information is provided, a non-confidential submission should also be
provided, in which business confidential information is summarized or,
if necessary, deleted.
II. Summary of Request
All four requests, from Hartmarx Corporation (on its own behalf, on
behalf of its wholly-owned subsidiaries including Hickey-Freeman, and
on behalf of the Tailored Clothing Association), Hartz & Company, Inc.,
Hugo Boss, and Tom James Company, request the maximum possible increase
(1 million square meters) in each of the two tariff rate quotas (HTS
9902.51.11 and HTS 9902.51.12).
The Hartmarx request claims that current government statistics
demonstrate only a small percentage of imported worsted wool fabrics is
being entered under the tariff rate quotas and that worsted wool fabric
import data for the first six months of 2001, when annualized,
demonstrate that in neither HTS category is there a large percentage of
worsted wool fabric imports subject to duties that are covered by the
tariff rate quota. Of the more than four million square meters of the
finer worsted wool fabric imports (annualized), only 37 percent is
subject to tariff rate quota duty-rates. Of the more than 10.5 million
square meters of coarser worsted wool fabric imports (annualized), only
24 percent is subject to tariff rate quota duty-rates.
The Hartmarx request also addresses the six market factors that the
Act requires be considered in determining whether to modify the tariff
rate quota limitations. The request cites certain findings of the U.S.
International Trade Commission in its report titled ``Certain Wool
Articles: First Annual Report on U.S. Market Conditions''
(Investigation No. 332-427, USITC Publication 3454, September 2001) to
support its claims that 1) there has been a decrease in the sale and
production of domestically-produced worsted wool fabrics during 2000,
with additional and significant production cutbacks during 2001; 2)
there has been no decrease in the consumption of overall tailored
worsted wool apparel on a square meter equivalent basis; 3) there is a
growing inability of domestic producers of worsted wool fabrics to meet
the needs of the domestic apparel manufacturers, and an increased need
to rely on imported fabrics; 4) there is no evidence of reduced sales
by domestic worsted wool fabric manufacturers because of any factor
other than their decisions to reduce production; 5) there is evidence
of lost sales by domestic apparel manufacturers because of an inability
to access fabrics on a price competitive basis; and 6) the domestic
textile industry is not losing sales because of imports of lower priced
fabrics.
The Hartmarx request claims the current market conditions for each
relevant factor favor granting the maximum increase permitted under the
Act and argues that such an increase would not harm the domestic
textile industry because it would not displace current domestic fabric
orders nor cover
[[Page 53781]]
a sizeable percentage of imports. The request claims that U.S. textile
mills are not producing sufficient fabrics to satisfy the needs of the
U.S. tailored clothing industry, arguing that the domestic textile
industry has made business decisions that have eroded its capacity to
supply tailored clothing companies. The request states that the
tailored clothing industry has experienced significant economic injury
as a result of tariff rate quota limitations that are too small, while
the textile industry has demonstrated no harm as a result of the tariff
rate quotas. The tailored clothing industry claims it has demonstrated
that, given current import levels, the increase being sought does not
cover a majority of the worsted wool fabrics that the industry has been
importing. Therefore, the request states that the U.S. textile industry
remains fully protected by existing duty rates on a majority of the
fabric that the tailored clothing industry will continue to import, and
by the significant duty rates charged on fabric even under the tariff
rate quota.
The Hartmarx request states that under the North American Free
Trade Agreement (NAFTA), Canada and Mexico can export to the United
States more than 6.5 million square meter equivalents of duty-free
tailored clothing manufactured with non-NAFTA fabrics. In addition,
these 6.5 million square meters of fabric imported into Canada and
Mexico are subject to effective duty rates far lower than the reduced
rates U.S. tailored clothing companies pay on the four million square
meters of tariff rate quota-subject fabric. The request claims that
most of these 6.5 million square meter equivalents of tailored clothing
represent lost sales for domestic apparel producers. The request claims
that the textile industry has experienced significant financial benefit
from the Act, specifically unlimited duty-free access to yarns, top,
and fiber. In addition, the sheep industry received significant funding
from the Act. The request claims that the tailored clothing industry
has received little benefit to date.
Hartz & Company, Inc., Hugo Boss, and Tom James Company associate
themselves with the reasons and supporting material included in the
petition submitted on behalf of the Tailored Clothing Association. In
addition, these requesters argue the following reasons why the tariff
rate quota limitations should be increased: 1) domestic fabric mills
have significantly reduced their commitment to act as suppliers to
domestic producers of men's and boys' worsted wool tailored clothing.
Domestic producers of worsted wool fabric do not produce the fabric
that the tailored clothing industry customers demand with respect to
styling, variety, types, quality, and prices; 2) Canadian and Mexican
manufacturers export duty-free to the United States more than 6.5
million square meter equivalents of worsted wool apparel items (suits,
suit-type jackets, and trousers) containing fabrics imported from
outside NAFTA countries. These fabric imports are subject to lower duty
rates than those paid by U.S. importers of worsted wool fabric for
apparel, even for imports under the tariff rate quotas and the United
States government should provide at least as much access to imported
fabric as it has allowed to Canadian and Mexican competitors. Even if
the full relief is granted, the domestic tailored clothing industry
will be able to import only 6 million square meters of such fabric
subject to comparable duty rates; and 3) the tariff rate quota
allocations for calendar year 2001 when described as a percentage of
fabric imports demonstrate the inadequacy of the tariff rate quota
limitations.
Dated: October 18, 2001.
Linda M. Conlin,
Assistant Secretary for Trade Development, Department of Commerce.
[FR Doc.01-26780 Filed 10-23-01; 8:45 am]
BILLING CODE 3510-DR-S