Late last week, OIA and SIA were both notified that the Committee for the Implementation of Textile Agreements (CITA) determined that certain imports of ski and snowboard pants from China do not contribute to the market disruption. The pants under embargo will be released on Nov. 1, 2005.
CITA based this determination on its belief that these ski and snowboard pant imports of Chinese origin were not threatening to impede the orderly development of trade and because of this, the organization decided ski and snowboard pants should not be covered by the 2005 safeguard quotas reported in BOSS over the last two months (See BOSS_0535 & 0542).
The industry has been arguing that certain safeguard quotas that were put into effect to protect American textile manufacturing jobs had no effect on U.S. production since there are no domestic facilities to produce some of these goods.
“China is not a threat to textile manufacturing other Asian countries will pick up the manufacturing,” said Lonnie Drosihin, senior product development manager at Sierra Designs. “Even finding the fabric in the U.S. to produce some of our products is difficult, and there isnt anyone who can produce the finished goods. Yes, the increases from China are huge, but the total imports from Asia are relatively stable.”
“Everyone knows this wont help jobs in the U.S.” said Demetri Coupounas, president of GoLite. “In fact it is actually inhibiting exports. A mid-sized companys production runs depend on the volume we sell in the U.S. If we cant import it, we cant sell it here, and then we cant export to other countries.”
The argument seemed to work. The official filing stated that there is minimal domestic production of the ski and snowboard pants. Therefore, the exclusion of these products from the quota does not undermine the market disruption finding or require the readjustment of the quota calculation.
SIA worked hand in hand with the Commerce Department to develop the physical and functional description of the product for the carve-out. CITA issued a directive to the Commissioner of Customs and Border Protection to “not subject ski and snowboard pants on limits within these categories” and to release them from the current embargo for goods manufactured in China.
SIA and OIA worked together to achieve this carve-out for ski and snowboard pants, however it is important to note that this CITA directive only applies to this year's embargo and does not necessarily mean that the same or a similar carve-out will be applicable if these quotas are reapplied on these products next year. Both OIA and SIA remain active on these issues and continue to pursue a favorable decision for the industry on 2006 quotas. OIA is also working to collect data on the impact the China safeguards have on the outdoor industry by developing a secure and confidential survey tool to quantify the effects of the embargo.
“While CITAs decision solves a big problem for the outdoor industry for 2005, there are more potential quotas on the horizon,” said Frank Hugelmeyer, president of OIA. “The possibilities of jacket quotas and the re-application of quotas on ski and snowpants for 2006 are currently being considered by CITA… Should these quotas be enforced, they could potentially be devastating to the outdoor industry.”
The domestic textile industry has already filed petitions asking CITA to reapply quotas on apparel products, such as ski and snowboard pants, and to apply new quotas on additional apparel categories that should ship in Spring 2006. These new proposed quotas include man-made fiber coats, which includes ski jackets and other outerwear, and polyester filament fabric, light weight. The biggest concern among the industry is the potential for a quota on man-made fiber coats this includes any Gore-Tex, fleece, nylon, or polyester jacket made in China. CITA has requested public comment on these petitions with a deadline of November 10, 2005.
