National Council of Textile Organizations
Washington, DC 20006
August 31, 2005

The Honorable Clay Shaw
Subommittee on Trade
House Committee on Ways and Means
1104 Longworth House Office Building
Washington, D.C.  20515

Dear Chairman Shaw:

I am writing to let you know of the National Council of Textile Organization’s (NCTO) strong opposition to duty suspension legislation for woven cotton shirting fabrics.  Legislation to suspend duties on woven cotton shirting fabrics was introduced by Congressman Rob Simmons (R-CT) on April 27, 2005, and the bill number is H.R. 1945.  Companion legislation was introduced in the Senate by Senator Arlen Specter (R-PA) on April 6, 2005, and this bill number is S. 738.

The NCTO is an association representing the entire spectrum of the textile industry, including fibers, yarns, fabrics and industry suppliers.  Many of our member companies manufacture woven cotton shirting fabrics that are used in men’s and boy’s shirts.  This category of imports is also very import sensitive and this is why NCTO and other trade associations applied earlier this year for a safeguard to be imposed against China in men’s and boys’ cotton woven shirts.  The Committee for the Implementation of Textile Agreements (CITA) agreed that the U.S. market in this product category was indeed being disrupted by imports from China and granted a safeguard on May 27, 2005.  A major consideration in CITA’s determination was the impact that China’s imports of woven cotton men’s and boys’ shirts was having on U.S. fabric manufacturers.

We understand that there is a difference of opinion between the International Trade Commission (ITC) and the U.S. Customs Service regarding the exact fabrics that would be covered under this duty suspension.  While the ITC maintains that only certain fabrics will be covered under this legislation, specifically those fabrics covered under Annex 401 of the NAFTA, the Customs Service interprets this legislation to open the floodgates to all imports of woven cotton fabrics used in the production of men’s and boys’ shirts.  If this happens, the U.S. textile industry would be devastated.  For your information, I am enclosing a copy of the comments we submitted on the China safeguard petition for men’s and boys’ cotton woven shirts which contains detailed information regarding U.S. production of these products (Attachment 1). 

Given that there is a difference of opinion regarding which categories of cotton woven fabrics would be covered by this legislation, NCTO must strongly oppose these bills.  The U.S. Customs Service will ultimately determine what imports will be covered should this legislation pass.  The Customs Service has communicated with us, and I understand with the ITC as well, that it is their belief that this legislation will allow all imports of men’s and boys’ cotton woven shirting fabrics to enter the U.S. duty-free. As a result of this interpretation and since the U.S. government has already imposed safeguards against China in said product categories earlier this year due to the impact that imports are having on the market, we strongly encourage an unfavorable recommendation by the ITC.       

 The U.S. textile industry is already facing tremendous market pressures due to the lifting of textile and apparel quotas on January 1, 2005, and increased competition from China.  If this industry is forced to absorb duty-free competition resulting from measures such as this, many companies will be unable to compete and will be forced to exit the market.

I understand that Congress has provided the duty suspension process to address situations where domestic capacity does not exist.  As evidenced by the attached information, U.S. manufacturers produce significant quantities of these products and are capable of meeting domestic demand.  As a result, we do not believe this duty suspension merits approval, and NCTO strongly encourages an unfavorable report by the Committee on these bills.

Thank you for your consideration of this request.

Sincerely,

Cass Johnson
President