[Federal Register Volume 66, Number 112 (Monday, June 11, 2001)]
[Notices]
[Pages 31212-31214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-14578]


-----------------------------------------------------------------------

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 a request for 
modification of tariff rate quota limitations on the import of certain 
worsted wool fabrics.

-----------------------------------------------------------------------

DATES:  To be considered, comments must be received or postmarked by 
5:00 p.m. on July 2, 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.
    The Department of Commerce (Department) hereby solicits comments on 
a request for an increase in the limitations on the quantity of imports 
of certain worsted wool fabric under the 2001 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. on July 2, 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.

SUPPLEMENTARY INFORMATION:

I. 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 wool 
fabric with average fiber diameters greater than 18.5 microns (new 
Harmonized Tariff Schedule of the United States (HTS) heading 
9902.51.11), the reduction in duty is limited to 2,500,000 square meter 
equivalents per year. For worsted wool fabric with average fiber 
diameters of 18.5 microns or less (new HTS heading 9902.51.12), the 
reduction is limited to 1,500,000 square meter equivalents per year. 
Both these limitations may be modified by the President, not to exceed 
1,000,000 square meter equivalents 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 March 29, 2001, the Department published a notice in the Federal 
Register soliciting requests for modification of the tariff rate quota 
limitations. The Department received one such request, from Hartmarx

[[Page 31213]]

Corporation, Hickey-Freeman and the Tailored Clothing Association. This 
request was 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 this request, based on the requesters' 
executive summary, 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 
twelve months prior to the submission of the comments, 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 twelve months prior to the submission of the comments 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 most recent 
six month period for which data is available 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, 
etc.
    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

    The following is based on the executive summary to the request 
submitted by Hartmarx Corporation and Hickey-Freeman, on behalf of 
themselves and the Tailored Clothing Association. The request is dated 
April 11, 2001 and requests the maximum possible increase (1,000,000 
square meters) in each of the two tariff rate quotas (HTS 9902.58.11 
and HTS 9902.58.12).
    The request states that the current tariff rate quota limitations 
are significantly less than the quantity required by the industry at 
the time the Trade and Development Act of 2000 was enacted. The request 
notes that at the time of enactment, there was a dispute between the 
domestic textile mills and apparel manufacturers as to the quantity of 
such fabric that was being imported and the request claims that the 
petition process was intended to provide an opportunity to determine 
appropriate limitations that offer sufficient protections to domestic 
textile producers while accommodating the import needs of domestic 
apparel manufacturers. The request states that the industrys' fabric 
import needs demonstrably exceed the current limitations, that the U.S. 
textile industry is unable or unwilling to produce adequate supplies of 
worsted wool fabric, and that the tariff rate is causing severe harm to 
domestic apparel manufacturers.
    The request claims that since enactment, the domestic textile 
industry has significantly reduced its commitment to be a supplier to 
the requesters' industry, stating that in the last 12 months there has 
been a significant reduction in the production of worsted wool fabric 
suitable for use in men's and boys' tailored clothing and that the two 
remaining U.S. mills have significantly reduced their supply of worsted 
wool fabric to the industry. The request states that despite claims by 
domestic mills that there has been insufficient time to determine the 
impact of the tariff rate quota limitations on the market, the industry 
has commenced and completed its fabric purchases for 12 months of 
production (two full seasonal purchases) since the enactment of the 
Act, fabric imports that will fully benefit from the tariff rate quotas 
because they will enter during the 2001 calendar year. It states that a 
third season of designing and purchasing fabric offerings will be 
complete by the time the petition process is concluded. It claims that 
one major domestic worsted wool fabric producer, for example, was aware 
of this timetable when it described its reduction of offerings for the 
spring of 2000, but now ignores the purchasing and production cycles 
that have existed at least as long as the requesters have been in 
business.
    The request states that in the month of January 2001, 729,031 
square meters of fabric described in HTS heading 9902.51.12 was 
imported, imports which are subject to a 1.5 million square meter 
limitation for the 12-month period beginning in January. It also claims 
that the textile industry has conceded that the majority of these 
fabrics (i.e., those of these finer yarn diameters) are used in the 
production of men's and boys' suits, suit-type jackets, and trousers. 
The request states that one month of imports is consuming nearly 50% of 
the current tariff rate quota limitation and that imports for the fall 
2002 season, already underway in January 2001, will likely consume more 
than this entire limitation even after adjusting for duty-free imports.
    The request claims that government statistics also demonstrate the 
inadequacy of the limitation on fabric described in HTS heading 
9902.51.11. In January 2001, 1,161,603 square meters of such fabric was 
imported. This is about 45% of the limitation for the 12-month period 
beginning in January. The request states that while not all of this 
fabric will be used in men's and boys' tailored clothing, a significant 
amount will be so used and that this one-month`s worth of import data 
demonstrates that domestic apparel manufacturers lack sufficient 
domestically made worsted wool fabrics. The request states that two 
remaining worsted wool mills in the U.S. are the only suppliers for 
both the women's and men's tailored clothing industries.

[[Page 31214]]

    The request states that the textile industry claims that there is a 
need for a full year's worth of statistics before considering requests 
for increases in the limitations. The request states that because of 
the lag time in the reporting of these statistics by the government, 
the textile industry's argument would require the industry to wait 
until March 2002 before starting the petition process--delaying the 
full impact (i.e., a full season's cycle of fabric purchase through 
delivery) of any relief until the 2003 fall line at the earliest. The 
request states that this argument is contrary to the statute and the 
facts at hand, including published government statistics, which 
demonstrate the need to modify the limitation.
    The request argues that the current tariff rate quota limitations 
placed on U.S. domestic apparel makers are significantly less than the 
limitations the U.S. government has granted competitors in Canada and 
Mexico and that, despite these larger tariff rate quotas, Canadian and 
Mexican apparel makers still export worsted wool apparel made of non-
NAFTA fabrics in excess of their limitations and pay MFN duty rates.
    The request states that the requesters' industry continues to 
suffer losses to foreign competitors who have access to the same 
fabrics at the same prices but at lower duty rates. It claims that 
since enactment of the Act, the industry has continued to lose major 
production facilities to foreign competition and Canada has responded 
to the Act by processing three different tariff reduction proposals and 
restructuring its tariff rate quota program under NAFTA, all aimed at 
bestowing tariff advantages over competing U.S. production.
    The request notes that an increase in the limitations by 2 million 
square meters for fabric under HTS headings 9902.51.11 and 9902.51.12 
will not be sufficient to supply the industry's needs in 2001. Because 
of the demand for significant quantities of imported fabrics, the 
request claims that proclaiming the maximum increase in the limitation 
does not pose a potential economic threat to the domestic textile 
mills. Under the modification requested, the request states that the 
domestic textile industry will remain fully protected with high tariff 
rates on significant imports on which the industry will continue to 
rely, and with still meaningful tariff rates on imports under the 
tariff rate quotas. Even if the domestic textile industry were to 
return its domestic production to levels that haven't existed for 
decades, the request avers that the limitations with the requested 
modification will still not fully satisfy the needs of domestic 
tailored clothing manufacturers.

    Index of Exhibits Presented With the Petition for Modification to
   Limitations on Tariff Rate quotas for Certain Worsted Wool Fabrics
 
 
 
Exhibit 1:                            Data on domestic production,
                                       imports, and import prices for
                                       worsted wool fabric
Exhibit 2:                            Data on domestic production,
                                       imports from Canada and Mexico,
                                       and imports from the world for
                                       selected wool apparel
Exhibit 3:                            Data on total U.S. consumption of
                                       selected wool apparel
Exhibit 4:                            Statement by the American Textile
                                       Manufacturers Institute on
                                       extending duty-free entry to
                                       apparel sewn in the CBI region
Exhibit 5:                            News release and article on
                                       reorganization of Burlington
                                       Industries' apparel fabrics
                                       business.
Exhibit 6:                            Letter and information on
                                       Burlington Industries' worsted
                                       wool fabric production
Exhibit 7:                            Article on Burlington Industries'
                                       credit ratings
Exhibit 8:                            News release on Burlington
                                       Industries' Five-Point
                                       Improvement Plan
Exhibit 9:                            Transcript of Burlington
                                       Industries' investor conference
                                       call regarding transfer of
                                       operations from U.S. facilities
                                       to Mexico
Exhibit 10:                           Information on Burlington
                                       Industries' reduction in U.S.
                                       synthetic fabric and worsted wool
                                       fabric capacity
Exhibit 11:                           Article on Burlington Industries'
                                       debt ratings
Exhibit 12:                           Letters from U.S. suit
                                       manufacturers regarding domestic
                                       sources of worsted wool fabric
Exhibit 13:                           Canadian Government report on
                                       requested tariff relief for woven
                                       fabrics of combed wool and of
                                       combed fine animal hair imported
                                       into Canada
Exhibit 14:                           Article on increased demand for
                                       superfine fabrics in men`'s
                                       tailored clothing
Exhibit 15:                           Letter and chart regarding grade
                                       of fabric imported by U.S.
                                       producers of suits and grade of
                                       fabric in suits available for
                                       sale in the U.S.
Exhibit 16:                           Articles on plant closures in the
                                       U.S. tailored clothing industry
                                       and increasing Canadian exports
                                       of menswear to the U.S. market
Exhibit 17:                           Data on utilization of NAFTA
                                       tariff preference levels for
                                       textiles and apparel
Exhibit 18:                           Notices regarding the Canadian
                                       Government's administration of
                                       NAFTA tariff preference levels
                                       for textiles and clothing
Exhibit 19:                           Article on Canada's allocation of
                                       tariff preference levels
Exhibit 20:                           Canadian Government report on
                                       request for tariff relief on
                                       woven fabrics of combed wool and
                                       of combed fine animal hair
                                       imported into Canada
Exhibit 21:                           Canadian Government report on
                                       request for tariff relief on dyed
                                       woven fabric of rayon imported
                                       into Canada
Exhibit 22:                           Information relating to request
                                       for tariff relief on certain wool
                                       fabrics imported into Canada
Exhibit 23:                           Fabric order and purchasing dates
Exhibit 24:                           Statement of the Wool Fiber, Yarn,
                                       Fabric Coalition opposing wool
                                       fabric tariff reductions
Exhibit 25:                           Articles on growing consumer
                                       interest in men's suits
 


    Dated: June 5, 2001.
Michelle O'Neill,
Acting Assistant Secretary for Trade Development, Department of 
Commerce.
[FR Doc. 01-14578 Filed 6-8-01; 8:45 am]
BILLING CODE 3510-DR-F