05-17692. Announcement of Request for Bilateral Textile Consultations with the Government of the People's Republic of China and the Establishment of Import Limits for Certain Cotton and Man-made Fiber Brassieres and Other Body Supporting Garments (...

September 1, 2005.

AGENCY:

Committee for the Implementation of Textile Agreements (Committee).

ACTION:

Notice

EFFECTIVE DATE:

August 31, 2005.

FOR FURTHER INFORMATION CONTACT:

Ross Arnold, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, [phone]. 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 [phone]. 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.

On August 31, 2005, 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 and man-made fiber brassieres and other body supporting garments (Category 349/649) and other synthetic filament fabric (Category 620).

Paragraph 242 of the Accession Agreements provides that, upon receipt of the request, the People's Republic of China will hold its shipments to a level no greater than 7.5 percent above the amount entered during the first 12 months of the most recent 14 months preceding the month in which the request for consultations was made. Because this restraint period will be for less than 12 months, the quantitative limit will be prorated to conform to the number of days remaining in the year, beginning on August 31, 2005 (i.e., by a ratio of 123/365). 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 no mutually satisfactory solution were reached during this 90-day consultation period, the United States could continue these limits.

To ensure that the limitations provided for under Paragraph 242 are carried out, the Committee is establishing prorated limits on Chinese-origin textile and apparel products in Categories 349/649 and 620, beginning on August 31, 2005, and extending through December 31, 2005. If agreement on a different limit is reached as a result of the consultations with China, the Committee will issue a Federal Register Notice containing a directive to the Bureau of Customs and Border Protection to implement the negotiated limit.

The Committee solicited public comments with regard to whether imports of Chinese-origin textiles and textile products in Categories 349/649 and 620 were, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. Solicitation of Public Comments on Request for Textile and Apparel Safeguard Action on Imports from China, (69 FR 70661 (Dec. 7, 2004) (Category 620) & 69 FR 77998 (Dec. 29, 2004) (Category 349/649). The Committee solicited public comments with regard to whether imports of Chinese-origin textiles and textile products in Categories 349/649 and 620 were, due to actual market disruption, threatening to impede the orderly development of trade in these products. Solicitation of Public Comments on Request for Textile and Apparel Safeguard Action on Imports from China, 70 FR 23113 (May 4, 2005) (Category 349/649) & 70 FR 23124 (May 4, 2005) (Category 620).

On December 30, 2004, the United States Court of International Trade preliminarily enjoined the members of the Committee from considering or taking any further action on this request and any other requests that are based on the threat of market disruption. U.S. Association of Importers of Textiles and Apparel v. United States, 350 F. Supp. 2d 1342 (CIT 2004). On April 27, 2005, the United States Court of Appeals for the Federal Circuit granted the U.S. government's motion for a stay of that injunction and ultimately reversed the preliminary injunction. U.S. Association of Importers of Textiles and Apparel v. United States, Ct. No. 05-1209, 413 F.3d 1344 (Fed. Cir. June 28, 2005). Thus, the Committee resumed consideration of these cases. (See 70 FR 24397, published on May 9, 2005).

The Committee determined that imports of Chinese-origin textiles and textile products in Categories 349/649 and 620, are, due to the existence of market disruption and the threat of market disruption, threatening to impede the orderly development of trade in these textile products. A summary statement of the reasons and justifications for the U.S. request for consultations concerning imports of Chinese-origin textiles and textile products in Categories 349/649 and 620 from the People's Republic of China follows this notice.

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 Categories with the Harmonized Tariff Schedule of the United States (refer to the Office of Textiles and Apparel website at http://otexa.ita.doc.gov).

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile Agreements.

Committee for the Implementation of Textile Agreements

September 1, 2005.

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 August 31, 2005, entry into the United States for consumption and withdrawal from warehouse for consumption of Chinese-origin cotton and man-made fiber brassieres and other body supporting garments (Category 349/649) and other synthetic filament fabric (Category 620), produced or manufactured in the People's Republic of China and exported during the period beginning on August 31, 2005, and extending through December 31, 2005, in excess of the following limits.

Category	Quantity
349/649	7,275,216 dozen.
620	12,328,306 square meters.

Products which have been exported to the United States prior to August 31, 2005, 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 these actions fall 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.

 

SUMMARY OF 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 and Man-made Fiber Brassieres and Other Body Supporting Garments

Category 349/649

The United States believes that imports of Chinese-origin cotton and man-made fiber brassieres and other body supporting garments are, due to the existence of market disruption, threatening to impede the orderly development of trade in these products. Further, the United States believes that imports of Chinese-origin cotton and man-made fiber brassieres and other body supporting garments are, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. 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 cotton and man-made fiber brassieres and other body supporting garments from China were 17,734,954 dozens for the entire twelve months of 2004. In the first half of 2005, U.S. imports from China increased to 11,139,910, an increase of 35 percent from the first half of 2004.

 

U.S. Imports from the World Are Increasing Rapidly in Absolute Terms. U.S. imports of cotton and man-made fiber brassieres and other body supporting garments from all sources, excluding cotton and man-made fiber brassieres and other body supporting garments containing U.S. components that were imported under outward processing programs, increased from 19,381 thousand dozens in the first half of 2004 to 21,043 thousand dozens in the first half of 2005 - an increase of 9 percent. The absolute increase in imports from China in the first half of 2005 (2,908 thousand dozens) is greater than the absolute increase in U.S. imports of this category from the world as a whole (1,663 thousand dozens).

 

The Average Unit Value of Imports from China is Significantly Lower Than Rest of World in 2005. In the first half of 2005, the average unit value of U.S. cotton and man-made fiber brassieres and other body supporting garment imports from China was US$31.17 per dozen, compared to US$50.25 per dozen for “rest of world” imports.

 

The U.S. Brassieres and Other Body Supporting Garments Industry is Vulnerable to Increasing Imports. U.S. production fell by 2 percent between the first quarter of 2004 and the first quarter of 2005, while the share of the market held by U.S. producers fell by 3 percentage points during this period.

 

 

SUMMARY OF 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

Other Synthetic Filament Fabric

Category 620

The United States believes that imports of Chinese-origin other synthetic filament fabric are, due to the existence of market disruption, threatening to impede the orderly development of trade in these products. Further, the United States believes that imports of Chinese-origin other synthetic filament fabric are, due to the threat of market disruption, threatening to impede the orderly development of trade in these products. 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 other synthetic filament fabric from China were 5,895,247 square meters for the entire twelve months of 2004. In the period January-June 2005, U.S. imports from China increased to 39,973,330 square meters, an increase of 1,185 percent from the January-June 2004 level.

 

U.S. Imports from the World Are Increasing Rapidly in Absolute Terms. U.S. imports of other synthetic filament fabric from all sources increased from 135,921 thousand square meters in January-June 2004 to 256,020 thousand square meters in January-June 2005 - an increase of 88 percent. Over thirty percent of this increase was attributable to imports from China.

 

The Average Unit Value of Imports from China Is Falling in 2005. In 2004, the average unit value of U.S. other synthetic filament fabric imports from China was US$2.36 per square meter. In the period January-June 2005, the average unit value of those imports fell to US$0.70 per square meter compared to US$0.77 per square meter for “rest of world” imports.

 

The U.S. Other Synthetic Filament Fabric Industry is Vulnerable to Increasing Imports. U.S. production fell by 13 percent between the first quarter of 2004 and the first quarter of 2005, while the share of the market held by U.S. producers fell by 15 percentage points during this period.