New trading era begins as clothing quotas expire; U.S. hedges remain
The worldwide expiration of textile and apparel quotas at midnight on Dec. 31, as negotiated by the Uruguay Round, has opened a new era for members of the World Trade Organization (WTO).
The long-anticipated drop-away in quotas was made all the sweeter for importers by a ruling of the U.S. International Court of Trade on Dec. 30, which temporarily barred the Bush administration from imposing new safeguards on apparel products from China. The status of proposed U.S. safeguards remains unclear pending an anticipated appeal of the trade court's injunction.
Despite the general falling-away of quotas, certain imports of textiles and apparel will still be denied entry to the U.S., apart from safeguard considerations. Customs and Border Protection (CBP), acting on a request by the Committee for the Implementation of Textile Agreements (CITA), said it will deny entry to textiles exported to the United States in 2004 that exceed the allowed quantities for 2004.
Such goods denied entry will be subject to a staged admission process and will be delayed up to one month, until Feb. 1, at which time CBP will permit entry of quantities equal to 5 percent of the 2004 quota quantities.
Affected importers will have to decide whether to send away or warehouse such goods, perhaps for months, until entry is eventually allowed.
Meantime, CBP has cancelled visa, ELVIS, and guaranteed access level certifications, as well as exempt certifications in lieu of visas, for goods exported from WTO members on and after Jan. 1, with two principal exceptions.
Goods brought into the U.S. under duty preference programs, which remain in effect, still require visas. Also, all textile and apparel products manufactured and exported from Vietnam in 2005 will require visas and ELVIS transmissions. Vietnam is not a member of the WTO.
Entry to the United States after Feb. 1 will also be denied to excess 2004 shipments from other non-WTO countries, such as Laos, Russia, Ukraine.
A significant hindrance in the U.S. remains for goods shipped last year that did not exceed allowed quantities. All merchandise that was exported in 2004 from a country of origin in which quota and visa requirements were in place will require a 2004 visa, and be subject to the 2004 quota if entered into the commerce of the United States in 2005, regardless of where the merchandise was originally destined.