[Federal Register Volume 69, Number 210 (Monday, November 1, 2004)]
[Notices]
[Pages 63371-63373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24432]


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COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS


Announcement of Request for Bilateral Textile Consultations with 
the Government of the People's Republic of China and the Establishment 
of an Import Limit for Cotton, Wool, and Man-Made Fiber Socks in 
Category 332/432 and 632 Part, Produced or Manufactured in the People's 
Republic of China

October 28, 2004.
AGENCY: Committee for the Implementation of Textile Agreements 
(Committee).

ACTION: Notice

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EFFECTIVE DATE: October 29, 2004.

FOR FURTHER INFORMATION CONTACT: Ross Arnold, International Trade 
Specialist, Office of Textiles and Apparel, U.S. Department of 
Commerce, (202) 482-4212. For information on the quota status of these 
limits, refer to the Bureau of Customs and Border Protection website 
(http://www.cbp.gov), or call (202) 344-2650. For information on 
embargoes and quota re-openings, refer to the Office of Textiles and 
Apparel website at http://otexa.ita.doc.gov.

SUPPLEMENTARY INFORMATION:

    Authority: Section 204 of the Agricultural Act of 1956, as 
amended (7 U.S.C. 1854); Executive Order 11651 of March 3, 1972, as 
amended.

[[Page 63372]]

    On October 29, 2004, as provided for under paragraph 242 of the 
Report of the Working Party on the Accession of China to the World 
Trade Organization (Accession Agreement), the United States requested 
consultations with the Government of the People's Republic of China 
with respect to imports of Chinese origin cotton, wool, and man-made 
fiber socks in Category 332/432 and 632 part (``socks''). In accordance 
with paragraph 242 of the Accession Agreement and the procedures set 
forth by the Committee on May 21, 2003 (68 FR 27787), as clarified on 
August 18, 2003 (68 FR 49440), the United States is establishing a 
twelve-month limit on socks from China, beginning on October 29, 2004, 
and extending through October 28, 2005 at a level of 42,433,990 dozen 
pairs.
    Paragraph 242 of the Accession Agreement allows World Trade 
Organization Members that believe imports of Chinese origin textile and 
apparel products are, due to market disruption, threatening to impede 
the orderly development of trade in these products to request 
consultations with the People's Republic of China with a view to easing 
or avoiding such market disruption. Upon receipt of the request, the 
People's Republic of China has agreed to hold its shipments to a level 
no greater than 7.5 percent (6 percent for wool product categories) 
above the amount entered during the first 12 months of the most recent 
14 months preceding the request for consultations. The Member 
requesting consultations may implement such a limit. Consistent with 
paragraph 242, consultations with the People's Republic of China will 
be held within 30 days of receipt of the request for consultations, and 
every effort will be made to reach agreement on a mutually satisfactory 
solution within 90 days of receipt of the request for consultations. If 
agreement on a different limit is reached, the Committee will issue a 
Federal Register Notice containing a directive to the Bureau of Customs 
and Border Protection to implement the negotiated limit.
    On June 28, 2004, the Committee received a request from the 
Domestic Manufacturers Committee of The Hosiery Association, the 
American Manufacturing Trade Action Coalition, the National Council of 
Textile Organizations, and the National Textile Association alleging 
that imports from the People's Republic of China of socks are, due to 
market disruption, threatening to impede the orderly development of 
trade in this product, and requesting that an Accession Agreement 
textile and apparel safeguard action be taken on imports of socks. The 
Committee determined that this request provided the information 
necessary for the Committee to consider the request, and, on July 22, 
2004, the Committee solicited public comments on the request (69 FR 
43807). This public comment period ended on August 23, 2004. The 
Committee determined that imports of Chinese origin socks are, due to 
market disruption and the threat of market disruption, threatening to 
impede the orderly development of trade in socks, and that imports of 
socks from China play a significant role in the existence of and threat 
of market disruption. A summary statement of the reasons and 
justifications for the U.S. request for consultations concerning 
imports of socks from the People's Republic of China follows this 
notice.
    Paragraph 2.B. of the U.S.-China Textile Visa Arrangement provides 
that if additional categories become subject to import quotas, those 
categories shall be automatically included in the coverage of the Visa 
Arrangement. This Visa Arrangement was notified to the World Trade 
Organization Textiles Monitoring Body as an agreed administrative 
arrangement on May 21, 2002. Consequently, the United States will 
require that shipments of Chinese socks be accompanied by an export 
visa and Electronic Visa Information System (ELVIS) transmission issued 
by the Government of the People's Republic of China. The United States 
considers that implementation of the visa/ELVIS requirement is in the 
mutual interest of both countries. Goods in Category 332 shall remain 
subject to the Group II limit, and will continue to be subject to 
export visa and ELVIS requirements. If exported on or after January 1, 
2005, goods in Category 332 shall be subject only to the limit 
established in the directive that accompanies this notice. In order to 
provide a period for adjustment, the United States will allow shipments 
of goods in Categories 432 and 632 part that are not accompanied by an 
export visa and an ELVIS transmission to enter the United States if 
exported prior to November 28, 2004. However, shipments exported from 
China on or after November 28, 2004 must be accompanied by an export 
visa and ELVIS transmission issued by the Government of the People's 
Republic of China, and shipments without an export visa and ELVIS 
transmission will be denied entry. Socks in Category 632 (632 part) are 
in HTS numbers 6115.93.6020, 6115.93.9020, 6115.99.1420 and 
6115.99.1820. They may be visaed as ``cat. 632'' or ``cat. 332/432/
632.``, but not at ``632pt.'' Similarly, socks in Category 332 may be 
visaed as ``cat. 332'' or ``cat. 332/432/632,'' and socks in Category 
432 may be visaed as ``cat. 432'' or ``cat. 332/432/632.''
    A description of the textile and apparel categories in terms of 
Harmonized Tariff Schedule of the United States numbers is available in 
the CORRELATION: Textile and Apparel Category with the Harmonized 
Tariff Schedule of the United States (see Federal Register notice 69 FR 
4926, published on February 2, 2004). Also see 68 FR 65445, published 
on November 20, 2003.

D. Michael Hutchinson,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.

Committee for the Implementation of Textile Agreements

October 28, 2004.

Commissioner,
Bureau of Customs and Border Protection, Washington, DC 20229.
    Dear Commissioner: Pursuant to Section 204 of the Agricultural 
Act of 1956, as amended (7 U.S.C. 1854); and Executive Order 11651 
of March 3, 1972, as amended, you are directed to prohibit, 
effective on October 29, 2004, entry into the United States for 
consumption and withdrawal from warehouse for consumption of cotton, 
wool, and man-made fiber socks in Category 332/432/632pt., produced 
or manufactured in the People's Republic of China and exported 
during the twelve-month period beginning on October 29, 2004, and 
extending through October 28, 2005, in excess of 42,433,990 dozen 
pairs.
    Paragraph 2.B. of the U.S.-China Textile Visa Arrangement 
provides that if additional categories become subject to import 
quotas, those categories shall be automatically included in the 
coverage of the Visa Arrangement. Shipments of Chinese origin 
cotton, wool, and man-made fiber socks in Category 332/432/632pt. 
\1\ must be accompanied by an export visa and Electronic Visa 
Information System (ELVIS) transmission issued by the Government of 
the People's Republic of China. Goods in Category 332 shall remain 
subject to the Group II limit, and will continue to be subject to 
export visa and ELVIS requirements. If exported on or after January 
1, 2005, goods in Category 332 shall be subject only to the limit 
established in this directive. In order to provide a period for 
adjustment, the United States will allow shipments of goods in 
Categories 432 and 632pt. that are not accompanied by an export visa 
and an ELVIS transmission to enter the United States if exported 
prior to November 28, 2004. However, shipments exported from China 
on and after November 28, 2004 must be accompanied by an export visa 
and ELVIS transmission issued by the Government of the People's 
Republic of China, and shipments without an export visa and ELVIS 
transmission will be denied entry. Socks in Category 632 (632pt.) 
are in HTS numbers 6115.93.6020, 6115.93.9020, 6115.99.1420 and 
6115.99.1820. They may be visaed as ``cat. 632'' or ``cat. 332/432/
632.``, but not at

[[Page 63373]]

``632pt.'' Similarly, socks in Category 332 may be visaed as ``cat. 
332'' or ``cat. 332/432/632,'' and socks in Category 432 may be 
visaed as ``cat. 432'' or ``cat. 332/432/632.''
    Products which have been exported to the United States prior to 
October 29, 2004, shall not be subject to the limit established in 
this directive.
    In carrying out the above directions, the Commissioner should 
construe entry into the United States for consumption to include 
entry for consumption into the Commonwealth of Puerto Rico. The 
Committee for the Implementation of Textile Agreements has 
determined that this action falls within the foreign affairs 
exception of the rulemaking provisions of 5 U.S.C. 553(a)(1).
    Sincerely,
D. Michael Hutchinson,
Acting Chairman, Committee for the Implementation of Textile 
Agreements.

    \1\ Category 632pt. only HTS numbers 6115.93.6020, 6115.93.9020, 
6115.99.1420 and 6115.99.1820.

SUMMARY OF THE REASONS AND JUSTIFICATIONS FOR U.S. REQUEST FOR 
CONSULTATIONS WITH CHINA PURSUANT TO PARAGRAPH 242 OF THE REPORT OF THE 
WORKING PARTY ON THE ACCESSION OF CHINA TO THE WORLD TRADE ORGANIZATION

Cotton, Man-made Fiber, and Wool Socks

Merged Category 332/432 and 632 Part

    The United States believes that imports of Chinese origin 
cotton, man-made fiber and wool socks (``socks'') are, due to market 
disruption, threatening to impede the orderly development of trade 
in socks, and that imports from China play a significant role in the 
existence of market disruption. Further, the United States believes 
that imports of Chinese origin socks are, due to the threat of 
market disruption, threatening to impede the orderly development of 
trade in socks, and that imports of socks from China play a 
significant role in the threat of market disruption. Either finding 
supports a request for consultations with the Government of the 
People's Republic of China under Paragraph 242 of the Report of the 
Working Party on the Accession of China to the World Trade 
Organization (``Paragraph 242''). The following facts, and others 
contained in this Statement, support these beliefs:
    U.S. Imports from China Are Increasing Rapidly in Absolute 
Terms. U.S. imports of socks from China increased from 985,619 dozen 
pairs in 2001 to 21,877,024 dozen pairs in 2003 (an increase of over 
2,100 percent), and to 42,491,164 dozen pairs in the twelve-month 
period ending August 2004 (an increase of over 4,200 percent from 
the 2001 level).
    U.S. Imports from China Are Increasing Rapidly Relative to Other 
Imports. In 2001, China was the 12th largest exporter of socks to 
the United States. By the year ending August 2004 China became the 
largest supplier to the U.S. of socks.
    Chinese Average Unit Values Are Well Below Values from Other 
Countries. In 2001, the average unit value of U.S. sock imports from 
China was US$11.54 per dozen pair, compared to a ``rest of world'' 
import average unit value of US$8.68 per dozen pair. By 2003, the 
average unit value of imports of socks from China fell to $5.11 per 
dozen pair, compared to $7.51 per dozen pair for the rest of the 
world. In the year ending August 2004, the average unit value of 
imports of socks from China fell further to US$4.92 per dozen pair, 
compared to US$7.71 per dozen pair for ``rest of world'' imports.
    U.S. Imports from the World Are Increasing Rapidly in Absolute 
Terms. U.S. imports of socks from all sources into the United 
States, excluding socks containing U.S. components that were 
imported under outward processing programs, increased from 
51,014,517 dozen pairs in 2001 to 98,976,106 dozen pairs in 2003, 
(an increase of 94 percent), and to 119,805,665 dozen pairs in the 
year ending August (an increase of 135 percent from the 2001 level.)
    The U.S. Socks Industry is Vulnerable to Increasing Imports. 
U.S. production plus outward processing of socks fell 13.2 percent 
from 2001 to 2003 (from 246,464,000 dozen pairs to 214,020,000 dozen 
pairs), while the share of the market held by U.S. producers fell by 
14.5 percentage points (from 82.9 percent to 68.4 percent) during 
this period. The number of employees and the number of 
establishments in the sock industry also fell significantly during 
this period.
    U.S. Imports from China Are Likely to Increase Further in the 
Near Future. China's capacity to produce apparel, including socks, 
and the low prices of imports of these products from China pose an 
imminent threat to disrupt the U.S. market for socks. Due to the 
vulnerability of the U.S. industry today, continued increases in 
low-priced sock imports from China could have a considerable impact 
on the market in the near future.
[FR Doc. 04-24432 Filed 10-29-04; 8:45 am]
BILLING CODE 3510-DR-S