US: Rival groups row over plans to tackle textile smuggling
The National Retail Federation (NRF) is urging Congress to resist political pressure from the textile industry, which yesterday (18 June) claimed illegal textile fraud levels have reached record highs.
The calls came after textile executives on Thursday told a House panel that importers have been using increasingly sophisticated methods to get around trade preference rules in the CAFTA (Central American Free Trade Agreement) and other trade preference areas.
The textile executives want to see an overhaul the textile enforcement effort in these trade deals.
However, NRF argues that tougher tariff enforcement for apparel imports could lead to "overzealous enforcement" that would penalise legitimate importers and have an adverse impact on small retailers in particular.
"Retailers take their customs compliance responsibilities very seriously," NRF vice president and international trade counsel Erik Autor said.
"However, we are concerned that pressure from the textile industry may lead to overzealous enforcement with little control or oversight that will have several adverse consequences."
Textile firms cited examples including Customs failing to act after Pakistani and Chinese yarn supplies surged into the CAFTA region falsely labelled as yarns made in the United States.
The said US job losses and factory closures were the direct result - with figures from the National Council of Textile Organizations said to show that seven US yarn plants have shut down over the last year because of the CAFTA/NAFTA yarn fraud.
A lack of staff and resources in the textile and apparel area were blamed by textile executives for the lack of Customs enforcement.
But the retailers said one-third of all import specialists and many line agents at CBP are already devoted exclusively to textile and apparel - and apparel retailers have the highest customs compliance rates of any importing industry.
In a written testimony Cass Johnson, president of NCTO, quoted figures that show importers filing trade preference claims only stand a one in one thousand chance of having their preference paperwork looked at.
He added that total revenue charges by Customs for illegal claims of preference were only $2.2m out of nearly $12bn in preference claims last year.
Autor's statement countered: "If CBP (US Customs and Border Protection) is constantly forced to leave no stone unturned, the result will be harassment and disruption of shipments that are compliant and low-risk that will become a barrier to legitimate trade."
He added: "At a time when many retailers are struggling to stay in business and are facing increasingly burdensome compliance requirements on labour, environment, supply chain security and product safety, an overly heavy hand by CBP that only disrupts legitimate textile and apparel trade while adding little to improve enforcement is unwise policy."
The executives were testifying during a hearing held by the House Small Business Committee's trade subcommittee on whether US Customs and Border Protection is adequately enforcing trade laws affecting textile and apparel imports.
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