II

104TH CONGRESS

2D SESSION S. 1982

To provide a remedy to damaging imports of men’s and boys’ tailored wool

apparel assembled in Canada from third country fabric and imported

at preferential tariff rates.

IN THE SENATE OF THE UNITED STATES

JULY 23, 1996

Mr. HOLLINGS (for himself, Mr. THURMOND, Mr. ROBB, Mr. WARNER, Mr.

ROCKEFELLER, Mr. D’AMATO, Mr. HELMS, Mr. FAIRCLOTH, Mr.

COHEN, Ms. SNOWE, Mr. CAMPBELL, and Mr. FORD) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To provide a remedy to damaging imports of men’s and

boys’ tailored wool apparel assembled in Canada from

third country fabric and imported at preferential tariff

rates.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Emergency Safeguard

5 Act of 1996’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) men’s and boys’ wool suits (of United

2 States category 443), sport coats (of United States

3 category 433) and slacks (of United States category

4 447) (collectively, ‘‘tailored wool apparel’’) from

5 Canada are being imported into the United States in

6 such increased quantities as to cause serious damage

7 to the domestic tailored wool apparel industry;

8 (2) the provision of safeguard procedures in

9 international trade agreements to deal with surges of

10 injurious imports has been a fundamental policy of

11 the United States Government for over sixty years;

12 (3) in a departure from this fundamental pol13 icy, the North American Free Trade Agreement

14 (‘‘NAFTA’’) deprives United States tailored wool

15 apparel manufacturers and their workers of any

16 remedy to address surges of injurious imports from

17 Canada, while all other United States, Canadian,

18 and Mexican industries and their workers can seek

19 some form of safeguard from injurious import

20 surges under NAFTA;

21 (4) United States tailored wool apparel manu22 facturers and their workers should be provided an

23 appropriate safeguard like all other United States

24 industries and their workers;
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1 (5) since 1988, United States production of

2 men’s and boys’ wool suits has declined by over 40

3 percent and employment in the industry declined by

4 nearly 50 percent;

5 (6) four major and numerous smaller United

6 States producers of tailored wool apparel recently

7 went out of business, announced their intention to

8 go out of business, or declared bankruptcy;

9 (7) plants in States such as Alabama, Dela10 ware, Florida, Georgia, Maryland, Massachusetts,

11 New York, Pennsylvania, Tennessee, West Virginia

12 and Virginia have either been closed or are laying

13 off workers;

14 (8) the surging tailored wool apparel imports

15 are assembled in Canada from fabric produced in

16 Italy, Korea, Turkey and other countries and ex17 ported at a preferential rate of duty under a pro18 gram known as a Tariff Preference Level (TPL) for

19 nonoriginating goods that was first established as a

20 tariff preference in the United States-Canada Free

21 Trade Agreement (‘‘CFTA’’) for Canadian exports

22 of wool apparel items;

23 (9) the tariff preference was designed for a lim24 ited purpose—to ensure that Canadian producers of

25 wool apparel traditionally exported to the United
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1 States (which included only a small amount of tai2 lored wool apparel) had access to an adequate supply

3 of wool fabric, not for the wholesale circumvention

4 of the rule of origin contained in the agreement;

5 (10) high-quality wool fabrics are readily avail6 able to apparel producers in Canada in sufficient

7 quantities from Canadian and United States produc8 ers;

9 (11) in recognition of the tariff preference’s

10 short supply purpose, the CFTA provided for mon11 itoring of wool apparel imports ‘‘with a view to ad12 justing the annual quality limitations at the request

13 of either Party based on the ability of apparel pro14 ducers to obtain supplies of particular fabrics origi15 nating within the territories of the Parties’’;

16 (12) the CFTA also required renegotiation of

17 the tariff preference before January 1, 1998, ‘‘to re18 flect current conditions in the textile and apparel in19 dustries located within the territories of the Parties,

20 including the ability of such apparel producers to ob21 tain supplies of particular fabrics originating within

22 the territories of the Parties’’;

23 (13) the NAFTA deleted the CFTA’s monitor24 ing and renegotiation provisions and excluded tai-
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1 lored wool apparel from the safeguard mechanisms

2 established to deal with surges of injurious imports;

3 (14) prior to implementation of the CFTA,

4 Canada accounted for no more than 5 percent of

5 United States imports of men’s and boys’ wool suits;

6 by 1995, as a result of the TPL, Canada had be7 come the largest exporter of men’s and boys’ wool

8 suits to the United States, accounting for 24 percent

9 of imports;

10 (15) since 1988, imports of men’s and boys’

11 wool suits from Canada have increased over 1,000

12 percent (i.e., from 100,000 units in 1988 to over 1.1

13 million units in 1995);

14 (16) the imports from Canada, made of fabric

15 that is not of North American origin, have also

16 harmed United States wool fabric, yarn, and fiber

17 producers and their workers in states such as Geor18 gia, Maine, Massachusetts, New Hampshire, North

19 Carolina, Oregon, Pennsylvania, Rhode Island, West

20 Virginia, South Carolina, and Virginia;

21 (17) the Congress never intended for the

22 NAFTA to result in such serious injury to United

23 States tailored wool apparel manufacturers and their

24 workers and for the NAFTA to single out that

25 United States industry and its workers by denying
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1 them access to an adequate and effective safeguard;

2 and

3 (18) the following safeguard proposals are in4 tended to rectify these oversights.

5 SEC. 3. PHASED SAFEGUARDS MEASURES.

6 (a) REVISION IN SUB-LIMITS.—Notwithstanding any

7 other provision of law, not more than 50 percent of the

8 total square meter equivalents of wool apparel assembled

9 in Canada and eligible for preferential duty treatment

10 under Appendix 6.B.1 to Annex 300–B of the North

11 American Free Trade Agreement (‘‘the Appendix’’) and

12 entered, or withdrawn from warehouse, for consumption

13 during any year shall be tailored wool apparel and not

14 more than 50 percent of such sublimit shall be men’s and

15 boys’ wool suits of United States category 443, or men’s

16 and boys’ wool sport coats of category 433, or men’s and

17 boys’ wool slacks of category 447, respectively.

18 (b) DUTY SNAP-BACK.—Notwithstanding any other

19 provision of law, tailored wool apparel assembled in Can20 ada and eligible for preferential duty treatment under the

21 Appendix shall be subject to duty at the nondiscriminatory

22 (most-favored-nation) rate in effect at the time of entry.

23 (c) EFFECTIVE DATES.—
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1 (1) NOVEMBER 1, 1996.—Subsection (a) shall

2 apply to merchandise entered, or withdrawn from

3 warehouse, for consumption after August 31, 1996.

4 (2) MARCH 1, 1997.—Subsection (c) shall apply

5 to merchandise entered, or withdrawn from ware6 house, for consumption after February 28, 1997.

7 (3) WAIVER.—The President may delay the ef8 fective date under this subsection for subsection (b),

9 and may suspend the application of such subsection

10 if it has taken effect, for such period as he considers

11 appropriate, if he determines that Canada has en12 tered into an agreement with the United States

13 which provides for sub-limits required under sub14 section (a).

Æ