S. Association of Importers of Textiles and Apparel 28

Julia Hughes, president of the U.S. Association of Importers of Textiles and Apparel (USA-ITA), said in testimony before the Commission that USA-ITA represents more than 200 apparel manufacturers and brands, retailers, distributors, importers, and related service providers. In both her testimony and a post-hearing statement, Ms. Hughes stated that apparel retailers and importers have faced the United States’ most onerous restrictions on imports of manufactured goods for decades, especially from quotas that raised prices and limited consumer choices.²⁹ In its written statement, USA-ITA expressed the view that since the elimination of such quantitative restrictions, the most recent of which was the expiration of the U.S.-China apparel safeguard quotas agreement at the end of 2008, the U.S. textile industry has not lost competitiveness and China has not become the sole supplier of textiles and apparel to the U.S. consumers.³⁰

21 SUA, written submission to the USITC, November 29, 2010; SUA, written submission to the USITC, January 11, 2011.

22 SUA, written submission to the USITC, November 29, 2010, 2.

23 Ibid., 3.

24 Ibid., 4.

25 Ibid., 7.

26 Ibid., 8.

27 Ibid., 9.

28 USITC, hearing transcript, December 16, 2010; Hughes, written testimony submitted to the USITC, December 16, 2010; and USA-ITA, written submission to the USITC, January 6, 2011.

29 USITC, hearing transcript, December 16, 2010, 59.

30 USA-ITA, written submission to the USITC, January 6, 2011, 3.

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In her testimony, Ms. Hughes indicated that, despite the elimination of quotas, USA-ITA members continue to face some of the highest tariffs of any industry––with many tariffs in the double digits, and some exceeding 30 percent. She said that such tariffs are

“regressive” because higher tariffs are imposed on goods such as infant apparel that burden low-income consumers, whereas “the wealthy pay a 1.2 percent tariff for silk scarves.”³¹

Ms. Hughes asserted that high U.S. tariffs on U.S. textile and apparel goods also motivate foreign governments to impose their own high tariffs on U.S. goods, as well as nontariff barriers. As examples of nontariff barriers she listed standards, labeling, security measures, and untargeted customs enforcement measures that hinder access to export markets for U.S. companies such as Levi Strauss & Co. and Polo Ralph Lauren.

Removing barriers to trade to support the smooth and safe operation of global supply chains is vital for these companies, she said.³²

In her testimony, Ms. Hughes also addressed concerns about rules of origin and U.S.

customs enforcement provisions for apparel, as well as free trade areas and preference programs that she stated are “complicated and differ more amongst the agreements than the rules for any other product.”³³ She said that they disrupt the supply chain of apparel brands and retailers and serve as a barrier to expanded trade. Consequently, she said USA-ITA member countries strongly support efforts to harmonize rules of origin and customs regulations among trading partners in U.S. trade preference programs with Africa, the Caribbean, and Andean countries.³⁴ Ms. Hughes stated that the costs and complications associated with complying with existing rules of origin have limited participation in the free trade agreements and other trade preference programs.³⁵ In addition, Ms. Hughes stated that the agreements should be revised to reflect changes in commercial realities; in some cases, for example, the rules of origin were written to help certain companies that are no longer in business.³⁶

In its written submission, USA-ITA offered several reasons to explain why China has not become the sole dominant supplier of textiles and apparel since the expiration of quotas and why a diverse supply chain is important: (1) retailers and apparel brands are willing to reward reliable, high-quality factories regardless of location and are reluctant to end business with reliable manufacturing partners for small, short-term savings; (2) China is not the low-cost producer for textiles or apparel it once was because its labor costs have been rising; (3) speed to market is an important sourcing factor prompting retailers and brands to place orders in the Western Hemisphere, with several Western Hemisphere apparel producers benefiting from the rebound in U.S. consumer demand; (4) retailers and apparel brands receive financial incentives to source textiles and apparel from countries with which the United States has free trade agreement and preference programs;

(5) retailers and apparel brands recognize that they must mitigate risk by not placing all orders within one country, and that smart business planning requires more than one location for sourcing, as well as a flexible, global supply chain.³⁷

31 USITC, hearing transcript, December 16, 2010, 60–1.

32 Ibid., 61–2.

33 Ibid., 63.

34 Ibid., 63.

35 Ibid., 117–118; USA-ITA, written submission to the USITC, January 6, 2011, 5.

36 USITC, hearing transcript, December 16, 2010, 126–127.

37 USA-ITA, written submission to the USITC, January 6, 2011, 4–5.

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