Comment submitted by William H. Lakin, Director General, European Apparel and Textile Organisation (Euratex)

Brussels, Belgium ? December 2nd, 2005 Trade and Commercial Regulation Branch Office of Regulations and Rulings Bureau of Customs and Border Protection 1300 Pennsylvania Avenue NW (Mint Annex) Washington DG 20229 United States of America Dear Sir, Concerns: Country of Origin of Textile and Apparel Products (USCBP-2005-0009-0001 ? RIN 1505-AB60 - -Federal Register Number 05-19985) Euratex which represents the European textile and apparel industry wants to comment on the new legislation published on October 5, 2005 in the Federal Register (Vol. 70, No 192, page 58009 to 58016) and implemented as of November 18, 2005. Our industry is astonished by the lack of communication and consultation on the part of the US on the specific issue of the Textile and Apparel Manufacturer Identification issue (later identified as MID in the letter) which creates discrimination compared to other manufactured products exported to the US. It is not understandable why the criteria for the MID for textiles and apparel is far more stringent than for products which evidently pose a greater threat to the health and security of the US citizen such as food or spare parts for cars or aeroplanes. Moreover, the European industry has serious doubts on the need to issue such discriminatory legislation under the Homeland Security Act as if textile and apparel products could put at risk the integrity of the US territory. These measures are having a severe and unjustifiable impact upon the EU industry?s ability to sell its products into the US market which is its principal export outlet and represented Euro 4.8 Billions in 2004 and Euro 3.6 billions over the first three quarters of 2005. Since this legislation has come unexpectedly upon EU exporters, most of whom are small and medium size companies, it is creating huge problems and a growing number of companies are seeing their products blocked at Customs, thus imposing huge costs on them and placing several of them on the verge of bankruptcy through their inability to deliver products on time to their US customers. Contrary to common and accepted practice of identifying the vendor as the manufacturer since the 80?s through a codification system, the new MID for textile and apparel is to be viewed as a breech in commercial confidentiality rules. The MID structure allows any importer or buyer to access the exact address of the manufacturer of a product, through the obligation, for the first data entry of a new MID, to provide on the invoice the complete address of the manufacturer in order to check whether the syntax of the MID is correct, thus putting in danger the survival of thousands of EU textile and apparel companies trading with the USA. The MID will allow buyers in the US to by-pass European producers when they are obliged to find additional capacities in third countries to satisfy their customers needs. Moreover there is an apparent conflict in documentary needs between the US Treasury website, which limits the MID on the Form 7501 to the ?invoicing party? and the Federal Register which stipulates that the MID should relate to the ?manufacturer of the product?. Such discrepancy creates uncertainty and leads to mistakes and errors which are costing huge amounts of capital to companies obliged to completely modify their existing IT-systems (adding MID - fields in suppliers databases, changing export documentation, change of internal information flow) to ensure the correctness of the information delivered. Moreover the tracking of the goods shipped becomes a nightmare in itself. In addition, Euratex questions the conformity of the new regulation with WTO common practice because it appears that [a] the new legislation is much stricter and cumbersome than the previous one which regulated textile and apparel imports during the Multi Fibre Agreement (MFA) and the subsequent WTO Agreement on Textile and Clothing (ATC); [b] if our understanding of the legislation is correct a few country suppliers, who have privileged relations with the US, are exempt from such obligations. In conclusion, Euratex firmly opposes the new MID regulation and will request the EU Commission to forcefully request clarifications on this legislation which hampers the freedom to trade of EU companies. We need modifications of the MID implementation rules aligning textile and apparel products on the more general rule, thus allowing the vendor or invoicing company to put its MID on the invoice. Furthermore, Euratex would like to see a drastic simplification of the requirements in particular for European companies producing textiles and apparel in the USA but importing partially or totally raw or semi-finished products (fabrics, trimmings, etc) from the EU and abroad. In the light of the above, we believe that it is important that exporters to the US be given a period of times of several weeks in order to adapt to whatever may be the final form of the legislation. Yours faithfully (Original signed by) William H. Lakin Director General CC: DG Trade of the European Communities