OIA Insider: You better watch out…trade embargos

Companies sourcing products in China face a potentially devastating 2006 from embargoes on the import of those products into the United States. Already this year, outdoor companies have been affected by embargoes on snow pants, as well as cotton and man-made fiber underwear.
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Companies sourcing products in China face a potentially devastating 2006 from embargoes on the import of those products into the United States. Already this year, outdoor companies have been affected by embargoes on snow pants, as well as cotton and man-made fiber underwear. Recent developments could lead to re-imposition of safeguards on these products for next year, along with the addition of similar limits on man-made fiber jackets -- a product central to the outdoor industry.

Representatives of the domestic textile industry have petitioned the Committee for the Implementation of Textile Agreements (CITA), a Department of Commerce-led working group, to enforce the "safeguard provision" in China's World Trade Organization agreement. The safeguard provision allows CITA to apply quotas on the volume of specific categories of textile and apparel imports from China, leading to eventual embargo of products in those categories.

Earlier this year, embargoes on man-made fiber pants (ski pants, waders, soft shell and waterproof pants and other active apparel), man-made fiber shirts, cotton and man-made fiber underwear, and other synthetic filament fabric stranded millions of dollars worth of outdoor apparel at U.S. ports. While these embargoes are set to expire on Dec. 31, 2005, moving them out of customs will be a difficult process. Many outdoor companies have been affected by these embargoes.

And there's potentially more on the horizon. In September, the domestic textile industry filed petitions asking CITA to reapply quotas on apparel products currently embargoed and to apply new quotas on additional apparel categories, including:

>> Category 634/635 -- men's and boy's and women's and girl's man-made fiber coats (includes ski jackets and other outerwear)
>> Category 619 -- polyester filament fabric, lightweight

Clearly, import limits on these categories could have a devastating impact on the outdoor industry.

CITA has requested public comment on these petitions with a deadline of Nov. 10, 2005. OIA has responded by creating a Trade Working Group to guide our work on this potential threat to our industry. We will invest OIA resources in seeding this work with trade expertise, and provide support to members wishing to comment. We are also considering a lobbying trip devoted to this issue early in November.

While OIA agrees the United States must enforce its international trade agreements, current embargoes are having a detrimental effect on the outdoor industry, particularly in apparel products that have little or no significant levels of domestic manufacturing.

If you are interested in receiving China trade updates, please contact Alex Boian -- aboian@outdoorindustry.org -- at OIA.

-- Written by Myrna Johnson, VP Government Affairs, OIA

SNEWS® and Outdoor Industry Association have teamed up to provide our readers with information updates from OIA. These updates will be published in SNEWS® every two weeks and will provide our readers with insights into OIA programs, benefits, initiatives and more that serve to provide a solid foundation for industry growth. If you are not already an OIA member, we encourage you to become one. For more information, go towww.outdoorindustry.org.

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