OIA-led trade group seeks to correct ski pant carve out and protect against further safeguards

Frank Hugelmeyer, president of the Outdoor Industry Association (OIA), members of his staff, and a contingent of OIA member company senior executives from W.L. Gore, Columbia Sportswear, VF Outdoor, Cabela's and Cloudveil Mountain Works descended on Washington, D.C., on Dec. 15 for a series of meetings focused on potential damage to the outdoor industry from safeguard quotas on outdoor apparel products sourced in China.
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Frank Hugelmeyer, president of the Outdoor Industry Association (OIA), members of his staff, and a contingent of OIA member company senior executives from W.L. Gore, Columbia Sportswear, VF Outdoor, Cabela's and Cloudveil Mountain Works descended on Washington, D.C., on Dec. 15 for a series of meetings focused on potential damage to the outdoor industry from safeguard quotas on outdoor apparel products sourced in China.

Through its Trade Working Group, OIA has developed a revised definition for "performance outerwear pants" and presented it to government and White House officials during its meetings.

OIA also raised the issue of potential safeguard quotas on man-made fiber jackets, a potentially devastating hit to the outdoor industry.

All-in-all, the meetings were very productive and very high-level, Hugelmeyer told SNEWS®.

The group met at the White House with the president's national security and economic advisors. They also met with U.S. Trade Ambassador Rob Portman (he is a secretary-level Cabinet member and reports directly to President Bush), U.S. Trade Representative Special Textile negotiator Scott Quesenberry, and CITA Chairman Jim Leonard.  

During an hour-long meeting on the House side of the U.S. Capitol, the group met with Congressman Mark Udall, D-Colo., who is co-chairman of the Congressional Fitness Caucus, chairman of the Congressional Ski Caucus and a supporter of OIA-member trade issues. The team also spent a few minutes making Sen. Michael Enzi, R-Wyo., who sits on the Small Business and Entrepreneurship Committee, and Congressman Mike Castle, R-Del., aware of the issues.  

At the National Security Council (NSC), Hugelmeyer and team had an audience with Nova Daly and John Hermann, both directors for International Economic Affairs. NSC is the president's policy arm for national security and foreign policy matters, including international trade.       

Then it was on to the Council of Economic Advisors (CEA) to meet with Gary Blank, chief of staff, and Christine McDaniel, a senior economist for trade. Hugelmeyer told SNEWS®, "CEA provides the administration with independent advice on economic issues and is helpful in providing the facts and data of our case to Department of Commerce officials and members of CITA."
 
The group also called on the U.S. State Department to meet with Kevin Honan, director of the Office of Agriculture, Biotechnology and Textile Trade Affairs, and Ed Heartney, economic/commercial officer and the CITA rep from the State Department.Â

"As a member of CITA, Heartney would need to vote in favor of a definition of performance outerwear pants for exclusion and any exemptions we would need to achieve on MMF (man-made fiber) jackets," Hugelmeyer told us.

Finally, the team dropped in on the U.S. Department of Commerce and spent time meeting with Jim Leonard, deputy assistant secretary for the Textiles and Apparel Division and chairman of CITA, and Phil Martello, director of the Trade and Data Division. In addition to being the chair of CITA, the Department of Commerce's role on CITA is to protect the domestic textile and apparel industry.Â

"Demonstrating to Leonard and Martello that the current ski and snowboard pants exemption definition is too narrow and causing undue import restrictions is critical. CITA also directs U.S. Customs how to interpret directives," Hugelmeyer told us. "We are preparing to show Leonard and CITA evidence that there is no domestic production of performance outerwear pants and therefore protectionist safeguards benefit no one and only damage American companies."

In each and every meeting, SNEWS® was told, the OIA team explained that the current definition used to exempt ski and snowboard pants from import quotas on Chinese-manufactured, man-made fiber pants was too narrow. With the strict interpretation of that definition by U.S. Customs, many companies will continue to see ski apparel unduly subject to import restriction. The current definition of ski and snowboard pants was included in a textile and apparel Memorandum of Understanding signed last month by the United States and China.

"We were able to show that because we are an innovative industry, and expected to be innovative by our customers, we are often first to market with ideas and inventions. And under the current specific language, and because of the way it is being interpreted, as much as 57 percent of our member company ski and snowboard pants already do not meet the current definition," Hugelmeyer said.

SNEWS® was told that several snowboard and ski pants brought along as a kind of show and tell, really opened administration officials' eyes when the group was able to clearly demonstrate that each of the garments were currently being restricted, even with the carve-out exemption.

"The way the exemption is currently worded, a substantial amount of outdoor apparel product will not qualify," said Peter Bragdon, vice president and general counsel for Columbia Sportswear. "This issue affects the entire industry. OIA has taken a great first step in solving this potential crisis for the long term, but there is much more work to be done." Â

In addition, OIA argued, the definition does not extend to similar-make pants that are used for the majority of other outdoor activities, like biking, hiking, fishing and hunting. Like skiwear, these types of performance outerwear pants are manufactured on specialized machinery using the same highly technical fabrics.

"Most importantly, there is absolutely no domestic production at the volume necessary for retail sale, so any reason for a safeguard simply does not exist, and is bad for American companies," Hugelmeyer emphasized.

"The current agreement with China doesn't put limits on jacket imports, but it doesn't prevent anyone from petitioning for new safeguard quotas either," added Hugelmeyer. "Since 50 percent of the industry's total fall sales are generated by apparel and 75 percent of those sales come from jackets and pants, embargoes could mean billions of dollars in lost revenue and the extinction of some of our smaller manufacturers and retailers."

SNEWS® View: This is an issue that everyone in the outdoor industry -- be it retailer, rep, distributor or manufacturer -- needs to pay attention to and thank OIA for (albeit a few months late) rolling up its industry association sleeves to find resolution and solution to a potentially very damaging scenario. Quota restrictions will raise prices on garments at best, and at worst, leave retailers waiting for orders that can't be filled, customers angry at retailers, and manufacturers struggling to stay afloat simply because they have no products to deliver. We have heard that SIA has now been invited to the table to join the talks and has accepted, which can only mean good things as OIA and SIA together will make a much more powerful team, harder than ever for the Bush administration to overlook.
 
 

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