<DOC>
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105th Congress WMCP:
2d Session COMMITTEE PRINT 105-8
_______________________________________________________________________
SUBCOMMITTEE ON TRADE
OF THE
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
__________
WRITTEN COMMENTS
ON
ADDITIONAL MISCELLANEOUS TRADE AND TARIFF LEGISLATION
[GRAPHIC] [TIFF OMITTED] NOT AVAILABLE IN THIS FORMAT
JULY 7, 1998
Printed for the use of the Committee on Ways and Means by its staff
-------------
U.S. GOVERNMENT PRINTING OFFICE
48-732 CC WASHINGTON : 1998
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Trade
PHILIP M. CRANE, Illinois, Chairman
BILL THOMAS, California ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida CHARLES B. RANGEL, New York
AMO HOUGHTON, New York RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa
Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
hearing records of the Committee on Ways and Means are also published
in electronic form. The printed record of written comments remains the
official version. Because electronic submissions are used to prepare
both printed and electronic versions of the hearing/written comments
record, the process of converting between various electronic formats
may introduce unintentional errors or omissions. Such occurrences are
inherent in the current publication process and should diminish as the
process is further refined.
C O N T E N T S
__________
Page
Advisory of Monday, December 22, 1997, announcing request for
written comments on additional miscellaneous trade and tariff
legislation.................................................... 1
______
H.R. 2148:
Hickory Throwing Company, Hickory, NC, Michael R. Cobb,
letter..................................................... 6
Highland Industries, Inc., Greensboro, NC, Randy Lippard,
letter..................................................... 7
Hoechst Corporation, H. Newton Williams, letter.............. 7
ICF Industries, Inc., New York, NY, statement and attachment. 8
Rayon Yarn Corporation, Spartanburg, SC, Steve Lathan, letter 16
H.R. 2151:
Disguise, Inc., San Diego, CA, statement and attachment...... 17
Mattel, Inc., El Segundo, CA, Kelly Bundy, letter and
attachments................................................ 22
H.R. 2236: No comments submitted.
H.R. 2237: No comments submitted.
H.R. 2238: No comments submitted.
H.R. 2239: No comments submitted.
H.R. 2240: No comments submitted.
H.R. 2241: No comments submitted.
H.R. 2242: No comments submitted.
H.R. 2243: No comments submitted.
H.R. 2244: No comments submitted.
H.R. 2245: No comments submitted.
H.R. 2246: No comments submitted.
H.R. 2268: No comments submitted.
H.R. 2269: No comments submitted.
H.R. 2270: No comments submitted.
H.R. 2271: No comments submitted.
H.R. 2287: No comments submitted.
H.R. 2322: No comments submitted.
H.R. 2324: No comments submitted.
H.R. 2325: No comments submitted.
H.R. 2326: No comments submitted.
H.R. 2334:
AlliedSignal Inc., statement................................. 28
H.R. 2336:
American Textile Manufacturers Institute, Carlos Moore,
statement.................................................. 31
H.R. 2339:
ABB CENO, Windsor, CT, and Hematite, MO, Robert S. Bell, Jr.,
and Bruce J. Kaiser, statement............................. 31
H.R. 2498: No comments submitted.
H.R. 2520: No comments submitted.
H.R. 2521: No comments submitted.
H.R. 2576: No comments submitted.
H.R. 2583: No comments submitted.
H.R. 2686: No comments submitted.
H.R. 2770: No comments submitted.
H.R. 2771:
Maloney Commodity Services, Inc., Stamford, CT, Robert F.
Maloney, letter............................................ 35
H.R. 2857: No comments submitted.
H.R. 2899:
Hed Cycling Products, White Bear Lake, MN, Anne Hed, letter.. 36
Innovations in Composites, Inc., Vista, CA, Kirk Jones,
letter..................................................... 37
H.R. 3083: No comments submitted.
ADVISORY
FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON TRADE
FOR IMMEDIATE RELEASE CONTACT: (202) 225-6649
December 22, 1997
No. TR-19
Crane Announces Request for Written Comments
on Additional Miscellaneous Trade
and Tariff Legislation
Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on
Trade of the Committee on Ways and Means, today announced that the
Subcommittee is requesting written public comments for the record from
all parties interested in additional technical corrections to recent
trade legislation and miscellaneous trade and tariff proposals.
BACKGROUND:
During the 105th Congress, a number of technical amendments have
been proposed to facilitate the implementation of major trade
legislation passed during the 103rd and 104th Congresses, including the
North American Free Trade Agreements Implementation Act (P.L. 103-182),
the Uruguay Round Agreements Act (P.L. 103-465), and the Miscellaneous
Trade and Technical Corrections Act of 1996 (P.L. 104-295).
On June 30, 1997, Chairman Crane requested written public comments
from parties interested in technical corrections to U.S. trade laws,
and legislation introduced by Members to provide temporary suspensions
of duty for specific products (TR-10). The request for comments
included all such bills introduced by Members to that date during the
105th Congress.
In response to Chairman Crane's request, the Subcommittee prepared
a draft bill, including those provisions which were non-controversial
and revenue neutral based on the public comments, Administration
review, and estimates by the Congressional Budget Office. The
provisions also reflected technical comments by the U.S. International
Trade Commission and revisions proposed by the Administration. On
October 7, 1997, Chairman Crane introduced H.R. 2622, the
``Miscellaneous Trade and Technical Corrections Act of 1997.'' The
Committee reported H.R. 2622 to the House on October 31, 1997 (H. Rept.
105-367).
Chairman Crane is requesting submission of written comments on
additional proposals to amend U.S. trade law and on legislation
introduced to provide temporary suspensions of duty or other duty
changes for specific products. This request for written comments
includes all such bills introduced by Members after June 30, 1997, and
before the end of the First Session of the 105th Congress.
PROPOSED MISCELLANEOUS TRADE PROVISIONS, DUTY-SUSPENSION, DUTY-REDUCTION, AND
DUTY-FREE ENTRY BILLS:
1. H.R. 2148 would amend subchapter II of chapter 99 of the
Harmonized Tariff Schedule (HTS) by inserting a new heading for viscose
rayon yarn, untwisted or with a twist not exceeding 120 turns/m
(provided for in subheading 5403.31.00), except for medium-tenacity
rayon filament yarn (2.8 to 4.1 grains per denier) manufactured solely
for the purpose of carbonizing, and to provide a reduced duty of 7.5
percent through December 31, 1998.
2. H.R. 2151 would amend the notes to chapters 61 and 62 of the HTS
by adding at the end of each a new note to cover costumes and pieces or
component thereof; and, amend note 1(e) of chapter 95 of the HTS by
inserting a provision for costumes, and pieces or components thereof.
3. H.R. 2236 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irganox 1520 (CAS No. 110553-27-0)
(provided for in subheading 2930.90.29) as duty free through December
31, 1999.
4. H.R. 2237 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irganox 1425 (CAS No. 65140-9-2) (provided
for in subheading 2931.00.30) as duty free through December 31, 1999.
5. H.R. 2238 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irganox 565 (CAS No. 991-84-4) (provided
for in subheading 2933.69.60) as duty free through December 31, 1999.
6. H.R. 2239 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irganox 1520LR (provided for in subheading
3812.30.60) as duty free through December 31, 1999.
7. H.R. 2240 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacure 184 (CAS No. 947-19-3) (provided
for in subheading 2914.40.40) as duty free through December 31, 1999.
8. H.R. 2241 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Darocure 1173 (CAS No. 7473-98-5) (provided
for in subheading 2914.40.40) as duty free through December 31, 1999.
9. H.R. 2242 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacure 819 (CAS No. 162881-26-7)
(provided for in subheading 2931.00.30) as duty free through December
31, 1999.
10. H.R. 2243 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacure 369 (CAS No. 119313-12-1)
(provided for in subheading 2934.90.39) as duty free through December
31, 1999.
11. H.R. 2244 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacure 1700 (provided for in subheading
3815.90.50) as duty free through December 31, 1999.
12. H.R. 2245 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacor 252LD (CAS No. 95154-01-1)
(provided for in subheading 2934.20.40) as duty free through December
31, 1999.
13. H.R. 2246 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Irgacor 1405 (CAS No. 171054-89-0)
(provided for in subheading 2934.90.39) as duty free through December
31, 1999.
14. H.R. 2268 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for 2-amino-4-(4-aminobenzoylamino)-
benzenesulfonic acid sodium salt (CAS No. 167614-37-1) (provided for in
subheading 2930.90.29) as duty free through December 31, 2000.
15. H.R. 2269 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for 2,3-xylenesulfonamide, 5-amino-N-(2-
hydroxyethyl) (CAS No. 25797-78-8) (provided for in subheading
2935.00.95) as duty free through December 31, 2000.
16. H.R. 2270 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for 3-amino-2'-(sulfato-ethylsulfonyl) ethyl
benzamide (CAS No. 121315-20-6) (provided for in subheading 2930.90.29)
as duty free through December 31, 2000.
17. H.R. 2271 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for 5-Nitro-2-thiazolamine (CAS No. 121-66-4)
(provided for in subheading 2934.10.10) as duty free through December
31, 2000.
18. H.R. 2287 would apply rates of duty effective after December
31, 1994, to certain water-resistant wool trousers (provided in
subheadings 6203.41.05 or 6204.61.10) that were entered, or withdrawn
from warehouse for consumption, after December 31, 1988, and before
January 1, 1995.
19. H.R. 2322 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for the organo-phosphorus compound ACM (CAS No.
167004-78-6) (provided for in subheading 2931.00.90.30) as duty free
through December 31, 1999.
20. H.R. 2324 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for the synthetic organic coloring matter C.I.
Pigment Yellow 109 (CAS No. 106276-79-3) (provided for in subheading
3204.17.04) as duty free through December 31, 1999.
21. H.R. 2325 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for the synthetic organic coloring matter C.I.
Pigment Yellow 110 (CAS No. 106276-80-6) (provided for in subheading
3204.17.04) as duty free through December 31, 1999.
22. H.R. 2326 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for the organic chemical para-
chlorobenzonitrile (CAS No. 623-03-0) (provided for in subheading
2926.90.14) as duty free through December 31, 1999.
23. H.R. 2334 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for ferroboron (provided for in subheading
7202.99.50) as duty free through December 31, 2000.
24. H.R. 2336 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for woven fabric, suitable for making
industrial and automotive power transmission and timing belts,
containing 75 percent or more, by weight, of filaments of polyamides or
aromatic polyamides, scoured and heat set and of any weight and having
warp or fill stretch properties greater than 75 percent at break
(provided for in subheading 5407.41.00) to provide most-favored-nation
(MFN) duty rate of 6.7 percent ad valorem through December 31, 2000.
25. H.R. 2339 would amend the tariff classification of nuclear fuel
assemblies by adding a new note to chapter 84 of the HTS to stipulate
that subheading 8401.30.00 applies only to fuel rods which are
collected into bundles to form fuel assemblies. In addition, the bill
would amend the classification of enriched uranium compound shipped
abroad and converted into sintered, enriched uranium dioxide pellets
and then inserted into zirconium alloy tubing sealed by the means of
plugs, which are welded into either end. The provision would be
retroactive to January 15, 1996, for eligible goods classified under
HTS subheadings 2844.20.00 and 8109.90.00, pursuant to Additional U.S.
Note 3 to chapter 84 as added by the bill.
26. H.R. 2498 would amend the HTS to extend to certain fine jewelry
certain trade benefits of insular possessions of the United States
under the Production Incentive Certificate program.
27. H.R. 2520 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for halofenozide (CAS. No. 112226-61-6)
(provided for in subheading 2928.00.25) as duty free through December
31, 2000.
28. H.R. 2521 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for anion exchange resins based on copolymers
of phenol/formaldehyde in primary form (provided for in subheading
3914.00.60) as duty free through December 31, 2000.
29. H.R. 2576 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for <greek-b>-Bromo-<greek-b>-nitrostyrene (CAS
No. 7166-19-0) (provided for in subheading 2904.90.47) as duty free
through December 31, 2000.
30. H.R. 2583 would amend section 304 of the Tariff Act of 1930 to
provide an exemption to the country-of-origin marking requirements for
golf club components that are imported for processing into finished
golf clubs in the United States; and golf clubs that are produced in
the United States.
31. H.R. 2686 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for beta hydroxyalkylamide (CAS No. 6334-25-4)
(provided for in subheading 3824.90.90) as duty free through December
31, 2000.
32. H.R. 2770 would amend the Tariff Act of 1930 by inserting a new
section 484b to provide that large yachts which would otherwise be
dutiable, may be imported without the payment of duty if imported with
the intention of offer for sale at a boat show in the United States.
Payment of duty would be deferred until such a large yacht is sold.
33. H.R. 2771 would amend Additional U.S. Note 5 to chapter 17 of
the HTS relating to the definition of raw value for purposes of the raw
sugar import tariff-rate quota.
34. H.R. 2857 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for 2,6-Dimethyl-m-Dioxan-4-ol Acetate (CAS No.
000828-00-2) (provided for in subheading 2932.99.90) as duty free
through December 31, 2000.
35. H.R. 2899 would amend chapter 87 of the HTS by inserting a new
subheading with the article description for subheading 8714.97.00 for
bicycle wheel assemblies consisting of rim, carbon-fiber spokes, and
hub flange assembled in one piece, or the above plus a rear freewheel/
free hub, to provide an MFN duty rate of 1.5 percent ad valorem.
36. H.R. 3083 would amend subchapter II of chapter 99 of the HTS by
inserting a new heading for Grilamid TR90 (CAS. No. 163800-66-6)
provided for in subheading 3908.90.70) as duty free through December
31, 1999.
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their name, address, and hearing date noted on a label, by the close of
business, Monday, January 26, 1998, to A.L. Singleton, Chief of Staff,
Committee on Ways and Means, U.S. House of Representatives, 1102
Longworth House Office Building, Washington, D.C. 20515.
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<F-dash>
H.R. 2148
To suspend temporarily the duty on certain other single
viscose rayon yarn.
<F-dash>
Hickory Throwing Company, Inc.
Hickory, NC 28602
January 20, 1998
Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
1102 Longworth house Office Building
Washington, DC 20515
Dear Mr. Singleton,
Currently H.R. 2148 is in the Ways & Means Committee process during
which you are receiving written public comment. The letter is written
to state our official opposition to the passage of this proposed
legislation. Specifically, we are opposed to those sections, or any
future proposals which would reduce or eliminate the import duties or
tariffs that pertain to the importation of continuous filament rayon
yarn from any country except those supported by the North American Free
Trade Agreement (NAFTA). In addition to the proposed H. R. 2148, we
have been informed that similar legislation (H.R. 2622) has been passed
from Committee and will be coming to the House of Representatives for a
vote. We wish to also go on record as being opposed to this proposed
legislation as it pertains to those aspects of rayon yarn duty
reductions or elimination. In particular included in H.R. 2148 and
buried within the text of H.R. 2622 (Sec.221, Sec.241) is legislation
which would undermine the preferences given to our Mexican (NAFTA)
partners/ producers in three categories of viscose rayon yarn. If
passed, these bills would eliminate the 10% U.S. import duty now
charged on ``non-NAFTA'' produced rayon yarn. We ask that you record
our official opposition to those rayon yarn import duty reductions
being proposed in H.R. 2148 (and H.R. 2622). Instead we ask that our
Representatives support the significant business development which
NAFTA has brought to our textile industry. Our particular reasons are
as follows.
Since 1990, we have been making substantial investments in both
capital equipment and personnel in anticipation of the favorable
impacts that NAFTA would bring to our yarn business. In the past six
months, we have added over $1,100,000 in projected equipment
expenditures and about $1,700,000 to construct a new manufacturing
facility in Hickory, NC. Combined with the investments of a related
business partner, we will be creating a major new production facility
(nearly $4,000,000) and creating over 20 new jobs as a direct result of
the NAFTA supported business. These projects are well documented as
viable projects as the financing is being structured through our local
government's Industrial Revenue Bond (IRB) program.
After all the careful planning and work to develop these
investments in our company and community, it is devastating to learn
that legislation could be passed to undermine the progress that our
textile industry has made in recent years. With the U.S. Dollar
presently as strong as it is, the European and Asian yarn producers
effectively have at least a 25% lower cost on their products sold in
the U.S. If you were to grant them a further reduction of 10% by
eliminating the import duty, it will be nearly impossible for us to
compete. Viscose filament rayon yarn is currently flooding in to the
U.S. from Europe. However, we can not export to those European and
Asian countries due to their protective tariffs and the current
currency situation. Likewise, with the failing Asian economies, we can
anticipate significant textile product ``dumping'' in the U.S. And we
wonder what can be done about the U.S. foreign trade imbalance. The
answer is obvious, vote against this bill.
If our Legislators fail to support our NAFTA commitments, and
instead, finance the profit margins of those European/Asian markets
which are effectively ``closed'' to the U.S. textile companies, then
much of our gain in recent years will be lost. We ask for your careful
review of this situation, and we ask you to support our textile
industry and NAFTA partner countries in this matter.
Sincerely,
Michael R. Cobb
Director of Planning & Development
<F-dash>
Highland Industries, Inc.
Greensboro, NC 27408
January 20, 1998
Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
1102 Longworth House Building
United States House of Representatives
Washington, D.C. 20515
Re: House Resolutions H.R. 2148 & H.R. 2622
Dear Mr. Singleton:
We are writing in opposition to all of the above proposed
legislation and any additional legislation that would seek to suspend
or eliminate the duty on continuous filament rayon yarn.
Highland Industries produces a fabric from this yarn that is a
vital component in the production of Defense Launch Vehicles. Highland
is the sole approved weaver of this product. Our only current operating
supplier is Rayon Yarn Corporation of Spartanburg, S. C., a subsidiary
of CYDSA Corporation, Monterrey, Mexico. There is no supplier of
continuous rayon that conforms to the present U. S. Military
specifications.
The specialized yarn that we purchase from Rayon Yarn Corporation
and their parent company, CYDSA, is only a small part of their total
product mix. We have been informed that if any of the above referenced
proposals are passed, Rayon Yarn Corporation and CYDSA will be forced
to cease production of all rayon products, and this will leave the
United States without a qualified production source for our critical
product.
The foreign suppliers are currently enjoying a 25 to 30% price
advantage over our NAFTA supplier due to the devaluation of the
European currencies against the dollar. Giving an additional 10%
advantage will force Rayon Yarn Corporation and CYDSA into an
impossible market situation and they will be forced to cease production
of all products. This will leave Highland and the United States without
an on-going supplier of a material critical to the defense of this
country.
Sincerely,
Randy Lippard
Director of Marketing
<F-dash>
Hoechst Corporation
Washington, DC 20005
January 19, 1998
Mr. A.L. Singleton
Chief of Staff
Committee of the Ways & Means
1102 Longworth House Office Building
United States House of Representatives
Washington, DC 20515
Dear Mr. Singleton:
This correspondence is in response to the Ways and Means
Committee's request for comment on various miscellaneous tariff bills.
The Hoechst Corporation is strongly opposed to any legislative effort
to suspend, reduce or eliminate tariffs on rayon filament yarns. This
objection is designed to cover H.R. 2148, which is included on your
most recent list of bills for comment, as well as the two rayon
provisions that were included in the initial draft of H.R. 2622.
We base our objection on the fact that rayon filament yarn is a
direct substitute for acetate filament and high tenacity polyester
yarn, which are produced in the US by two of our divisions--Celanese
Acetate and Trevira. We have found this to be true in several valuable
export markets for our products. In Korea, Chinese rayon filament is
currently displacing our exports of acetate, which is used in woven
fabrics, circular knits and velvets. The Chinese certainly recognize
that substitution of rayon for acetate is possible in that they have an
18% import duty on acetate. This duty is specifically designed to
protect their domestic production of rayon, since there is no acetate
production in China. High tenacity rayon filament is also a substitute
for high tenacity polyester filament which has several industrial uses
such as tire cord and is a major competitor for our products in Europe.
Producers of acetate yarns, as well as manufacturers of fabrics
that use these yarns, are already under enormous pressure from the
sheer volume of imports of finished apparel containing fabrics made
from rayon or acetate yarns. Acetate in the form of linings for
garments has been particularly hard hit by these imports.
Unfortunately, the market for rayon filament, acetate filament and high
tenacity polyester yarns in the United States is stagnant. An increase
in imports of rayon filament would occur at the expense of US producers
of acetate and high tenacity polyester filament yarns. Moreover, it is
inappropriate to grant a unilateral reduction or suspension to these
important tariffs at a time when our domestic acetate and polyester
industries are under pressure and our major trading partners continue
to maintain high duties on our products.
Ultimately, the effect of suspending or reducing rayon tariffs
could negatively impact US workers. Celanese Acetate currently is the
world's largest producer of acetate, employing 2500 people in the
United States. Its primary production facilities are in Rock Hill,
South Carolina and Narrows, Virginia. Trevira produces high tenacity
polyester filament in Salisbury, North Carolina employing 1600 workers.
For all these reasons, the Hoechst Corporation maintains its strong
opposition to any legislation that either suspends, eliminates or
reduces US tariffs on imports of rayon yarn. As a result we oppose H.R.
2148 and we request the House Ways and Means committee to strike all
existing provisions in H.R. 2622 associated with rayon duties. We
further request that the committee oppose any effort to move as an
individual bill, legislation that eliminates, suspends or reduces
duties on rayon yarns.
Thank you for your consideration of our concern in this area.
Sincerely,
H. Newton Williams
Vice President, Government Relations
HNW/clm
98NW31.DC2
<F-dash>
Comments of ICF Industries, Inc. of New York, New York
in Support of H.R. 2148 (Proposed Duty Suspension Affecting Certain
Viscose Rayon Yarn)
January 26, 1998
Chairman Archer and Members of the Committee:
ICF Industries, Inc. (``ICF'') is a U.S. merchant
distributor of filament yarn products headquartered at 111 West
40th Street, New York, New York 10018. This statement is
submitted on behalf of ICF, its officers and employees. ICF
very much appreciates the opportunity to comment in detail on
H.R. 2148, a bill to reduce for one year the existing duty on
two types of viscose rayon yarn (also known as ``rayon filament
yarn'') described at HTS #5403.31.00.\1\ This product is used
in a wide range of textile applications. H.R. 2148 is vital to
the interests of several important U.S. industries and many
U.S. companies, and is directly related to legislation already
approved by the Ways and Means Committee on October 8, 1997 and
incorporated into H.R. 2622, the Trade and Technical
Corrections Act of 1997.\2\
---------------------------------------------------------------------------
\1\ H.R. 2148 provides duty relief through December 31, 1998; if
approved, relief should extend to December 31, 1999.
\2\ Section 221 of H.R. 2622 provides a two-year duty suspension
for high tenacity single yarn of viscose rayon (for industrial end
uses), as described at HTS #5403.10.30 and proposed in H.R. 1954;
Section 241 of H.R. 2622 provides a three-year duty suspension for
other single yarn of viscose rayon with a twist exceeding 120 turns/m
(for textile end uses), as described at HTS #5403.32.00 and proposed in
H.R. 1888.
---------------------------------------------------------------------------
With the exception of a specialized category of yarn
manufactured for ``carbonizing'' (by North American Corporation
of Tennessee), rayon filament yarn is no longer manufactured in
the United States. ICF endorses the exception to the proposed
duty reduction for carbonizable yarn provided in H.R. 2148, as
set forth below.
This statement also notes a printing error in H.R. 2148 and
provides the correct form.
The Product
Rayon filament yarn is an artificial fiber extruded by what
is known as the viscose process in which cellulose is liquefied
via dilution in a caustic alkali solution, heated with carbon
disulfide and then forced through tiny spinneret holes into a
bath where it coagulates to form extremely fine jets of rayon
filament yarn. The product has a wide variety of end uses
ranging from delicate, silk-like fabrics made for apparel out
of fine denier textile yarn; to lining, velvet and other more
durable textile fabrics for apparel; to embroidery,
monogramming tive stitching threads; to drapery, upholstery and
other fabrics for home furnishings.
The Proposed Legislation
H.R. 2148 was introduced on July 10, 1997 by
Representatives Floyd Spence (R-SC) and Norman Sisisky (D-VA),
and affects two types of textile yarn as follows:
<bullet> HTS #5403.31.00 (Textile Yarn): Other yarn;
single: of viscose rayon, untwisted or with a twist not
exceeding 120 turns per meter;
monofilament; multifilament, untwisted or with twist of
less than 5 turns per meter (#5403.31.00.20)
multifilament, with twist of 5 turns or more per meter
(#5403.31.00.40)
The general duty rate applicable to these yarns is ten
percent. The current duty rate for imports from Mexico is six
percent.\3\ The duty rate for imports from Canada is one
percent. Imports from Israel are exempt from duty. H.R. 2148
would reduce the general duty to 7.5 percent for one year.
---------------------------------------------------------------------------
\3\ On October 21, 1997, the U.S. Trade Representative requested
public comment on a list of articles produced in Mexico that the three
NAFTA governments (Mexico, Canada and the U.S.) have agreed to consider
for accelerating tariff elimination. Included in the list of articles
produced in Mexico are those classified under HTS #5403.31.00 (62 F.R.
5467).
---------------------------------------------------------------------------
Absence of General Domestic Production
According to data compiled by the Textile Organon, a
respected industry publication, 658 million pounds of rayon
filament yarn were produced in the United States during the
year 1953. Thereafter, a combination of environmental and
economic constraints forced producers in this country to reduce
capacity or to shut down altogether. By 1965 U.S. production
had been reduced to 434 million pounds. By 1975 U.S. production
had dropped to 65 million pounds. By 1984, production in the
United States was down to 41 million pounds.
By the late 1980's there was only one remaining producer of
rayon filament yarn in the United States. This company was the
North American Rayon Corporation (``North American'') of
Elizabethton, Tennessee. In 1996 North American sold only 9.5
million pounds of rayon filament yarn and was being crushed by
the massive financial burden of attempted compliance with the
stringent federal and state environmental regulations
applicable to the environmentally ``dirty'' rayon filament yarn
extrusion process. In late 1996, North American decided to
follow the lead of all other U.S. producers and er part of its
rayon filament yarn manufacturing activities.
North American's termination of all but its carbonizable
rayon filament yarn production means that there is no longer
any producer in the United States of the type of rayon filament
yarn that ICF distributes. Further, the high costs which would
be associated with the construction in the United States of a
new rayon filament yarn manufacturing facility that could meet
this country's stringent environmental standards, coupled with
the historically low margins for textile and apparel inputs,
assure that domestic users of rayon filament yarn will not be
able to obtain these yarns from U.S. producers during coming
years.
Exception Proposed For Carbonizable Yarn
North American Rayon Corporation's successor company, North
American Corporation, now produces only a small category of
rayon filament yarn that is manufactured for a specialized
process known as carbonizing. ICF endorses an exception to the
proposed duty reduction that would allow any imported
carbonizable yarn to remain subject to the existing ten percent
duty. The following language in H.R. 2148 sets forth this
exception with respect to products that fall within HTS
#5403.31.00: except for medium tenacity rayon filament yarn
(2.8 to 4.1 grams per denier) manufactured solely for the
purpose of carbonizing.\4\
---------------------------------------------------------------------------
\4\ H.R. 2148 as printed contains the wording, ``grains'' per
denier. The correct term is ``grams,'' which should be used in
subsequent versions of this legislation.
---------------------------------------------------------------------------
The U.S. Market for Rayon Filament Yarn
U.S. consumption of rayon filament yarn for textile and
industrial end uses during the year 1995 amounted to
approximately 29,380,000 pounds. North American supplied
approximately 12,900,000 of these pounds, representing
approximately 44 percent of combined U.S. demand. In dollars,
North American's sales accounted for approximately $40 million,
or 44 percent, of the combined $91.5 million 1995 United States
market. U.S. consumption of rayon filament yarn for textile and
industrial end uses during the year 1996 amounted to
approximately 22,500,000 pounds. North American supplied
approximately 9,500,000 of these pounds, representing apercent
of combined U.S. demand. In dollars, North American's sales
accounted for approximately $32 million, or 44.5 percent, of
the combined $72 million 1996 United States market.
The Consumers
The consumers of rayon filament yarn for textile end uses
fall into three general categories: weavers, knitters and
processors. ICF customers who consume textile rayon filament
yarn include the following companies:
WEAVERS
Bally Ribbon Mills, Inc.
Bloomsburg Mills, Inc.
Carthage Fabrics Corp.
CMI Industries Inc.
Doran Textiles, Inc.
Fabric Resources Ltd.
Hoffman Mills Inc.
Frank Ix & Sons, Inc.
JPS Converter & Industrial Corp.
Keystone Weaving Mills, Inc.
J.B. Martin Company, Inc.
McGinley Mills, Inc.
Meder Textile Company, Inc.
C.M. Offray & Sons, Inc.
Lawrence Schiff Silk Mills
Schneider Mills, Inc.
Stonecutter Mills Corporation
Trimtex Company Inc.
Wear Best Sil-Tex Mills
A. Wimpfheimer & Brothers, Inc.
KNITTERS
Allied Fabrics Inc.
Andrex Industries
H.H. Fessler Knitting Co., Inc.
Ge-Ray Fabrics
Guilford Mills
Hope Industries
I.G. Textile Mills Inc.
Johnson & Johnson (Ethicon Co. Inc. Division)
Jomac Inc.
Kentex Industries Inc.
Kronfli Spundale Mills Inc.
Liberty Fabrics
Lida Stretch Fabrics Inc.
Metritek Corporation
Mohawk Fabric Co., Inc.
Native Textiles
Richland Mills
Shara-Tex Inc.
Universal Connection Corp.
PROCESSORS
Barbour Threads
Clifton Yarn Mills
Danville Chenille Co., Inc.
Decorative Aides Inc.
Excel Elastic Corp.
Huntingdon Yarn Mills
Ideal Braid Corporation
Kent Manufacturing Co.
Lending Textile Co., Inc.
London Yarn Co.
Moki Yarns, Div. of Lacy Lace Co.
Novita Yarns (Division of St. John Knits)
Robison-Anton Textile Co.
Twistex Yarns Inc.
William Wright Co.
The State of the Industry
Although unemployment in the U.S. declined in 1997 from 5.3
percent to 4.7 percent, conditions in the apparel and textile
industries were far less favorable. According to the U.S.
Department of Labor, the year 1997 witnessed the loss of 57,000
jobs in the U.S. apparel and textile industries.
The portions of these industries dependent upon the
consumption of domestically produced fabrics and processed
yarns containing filament rayon were no exception. On the
contrary, the U.S. weaving, knitting and yarn processing
industries have been hit hard by intense competition from
overseas suppliers of fabrics and stitching threads containing
rayon filament yarn, and by the importation of low priced
apparel and home furnishings. Selling prices are down.
Employment is down. Looms, knitting machines and twisting and
other processing machines are standing idle.
For instance, according to industry sources, domestic
weavers once controlled approximately 95 percent of the U.S.
market for woven goods containing filament rayon. Today,
domestic weavers control only approximately 25-30 percent of
this domestic market, and they do so only by selling at very
low prices. Industry sources also indicate that the converters
who arrange for the dying and finishing of textile greige goods
are now prone to look to U.S. weavers only for initial orders
requiring innovation or for quick response, and that volume
business is being given to overseas suppliers in China, Korea,
India, Indonesia, Pakistan and Turkey whose quality generally
does not match that of the U.S. weavers, but whose
manufacturing costs and prices are considerably lower.
This has reduced U.S. employment at some weavers.
Similarly, the rece priced velvet fabrics from Korea and
elsewhere has caused the domestic weavers' share of the market
for rayon velvet fabrics to decline over the last few years
from approximately 70 percent of the market to less than 50
percent. Employment has declined and this decline has been
attributable to the high price of rayon filament yarn.
Similarly, U.S. manufacturers of embroidery and other
decorative yarns and threads have maintained market share in
the face of intense Korean and other foreign competition only
by slashing prices. Despite dramatic investment in new
equipment to ensure that quality and productivity remain at the
highest levels, average selling prices per unit today are
significantly lower than they were some ten years ago.
Industry Supports the Proposed Duty Suspension
Based on the initial industry reaction to proposals for
duty suspensions for rayon filament yarn that were received by
the Ways and Means Committee last year, ICF believes that there
is significant support for H.R. 2148. The Committee opened a
45-day period for public comment on June 30, 1997 on a group of
miscellaneous duty suspension bills affecting rayon filament
yarn that included H.R. 1742, H.R. 1888 and H.R. 1954. During
that time, the Committee received 50 comments in support of
H.R. 1742 and one or more of the other bills, all of which
comments were also applicable to tariff relief for imports of
the rayon filament yarn described at HTS #5403.31.00. In
addition to 47 supportive comments from weavers, knitters and
processors of rayon filament yarn, comments in support were
received from the American Textile Manufacturers Association,
the National Knitwear and Sportswear Association, and the
Textile Distributors Association. The names of the companies
and associations supporting such tariff relief are listed in
the attached Table 1 and, under separate cover, we are
providing you with copies of their comments for review and use
by the Committee.
Opposition to the Legislation
In 1997, the Commerce Department completed a changed
circumstances antidumping duty administrative review and
subsequently revoked the antidumping order on high-tenacity
rayon filament yarn from Germany. According to the Federal
Register notice dated May 30, 1997 (62 F.R. 29329), the
Commerce Department's determination was based on the fact that
North American, which had been the petitioner in the original
underlying investigation, ``states that it has no further
interest in the order.'' The Commerce Department finding
further stated: We are now revoking the order based on the fact
that the order is no longer of interest to domestic interested
parties.
There were no submissions to the Commerce Department, and
thus no opposition from the public, in response to the notice
of preliminary determination to revoke the antidumping order,
which had included an opportunity for public comment.
Although there was no opposition to the revocation of the
antidumping order, and although there was overwhelming support
for the House tariff suspension legislation (H.R. 1742, H.R.
1888 and H.R. 1954), one company, Hoechst Corporation
(hereinafter ``Hoechst Celanese''), did state its opposition to
the House legislation within the prior official comment period.
In addition, Eastman Chemical Company also expressed opposition
in a November 17, 1997 letter to the Committee. Celanese
Acetate, a member of the Hoechst Group, and Eastman manufacture
acetate, a cellulosic product which comprises over 90 percent
of the overall cellulosic product market, and sells at a
significantly lower price than the rayon filament yarn now
being imported into the U.S. by ICF.
ICF has learned that current comments opposing H.R. 2148
have been sent to the Committee by Hoechst Celanese and by two
other entities: Rayon Yarn Corporation of Spartanburg, South
Carolina and Hickory Throwing Company of Hickory, North
Carolina. In the balance of this statement, ICF provides
evidence demonstrating that rayon does not compete with acetate
and hence that Hoechst Celanese's opposition is not justified
by the facts. With respect to Rayon Yarn Corporation and
Hickory Throwing Company, ICF urges the Committee to give no
weight to their opposition. Rayon Yarn Corporation is a
distribution and warehousing subsidiary of Cydsa, a Mexican
manufacturer of rayon filament yarn. Cydsa does not manufacture
any rayon filament yarn in the United States, and Rayon Yarn
Corporation simply imports Mexican yarn for sale in the United
States. Cydsa's opposition to H.R. 2148 is therefore apparently
motivated solely by the self-interested desire to maintain the
current duty advantage afforded to Mexican yarn, to the
economic disadvantage of dozens of American consumers of non-
Mexican yarn. Hickory Throwing Company is a commission
processor of yarn. The address of Hickory Throwing's facility
aacent to the warehousing facility of Rayon Yarn Corporation,
which raises the question of whether there is a business
affiliation or relationship between these two commenters such
that Hickory Throwing may also be characterized as seeking to
protect the current tariff advantage of rayon filament yarn
produced in Mexico.
Rayon Does Not Compete with Acetate
ICF believes and strongly asserts that acetate will not be
competitively threatened by a tariff reduction on rayon
filament yarn. On the contrary, rayon and acetate are two very
different products.
On the basis of quantity alone, US. acetate capacity is
over ten times the current volume of rayon imports. This
enormous difference in volume is because rayon and acetate are
different scientifically and technically, subject to different
tariffs and customs treatment, priced differently, and have
different end uses.
Rayon and Acetate Are Classified Differently Under the
Harmonized Tariff System
Artificial filament yarn, single, of viscose rayon is
classified at HTS headings #5403.10.30 (industrial yarn) and
#5403.31.00 (textile yarn) and #5403.32.00 (textile yarn).
Artificial filament yarn, single, of cellulose acetate is
classified at HTS heading #5403.33.00.
Rayon and Acetate Are Subject to Different Duty Rates
The general duty rate on these categories of rayon is ten
percent. The general duty rate on this category of acetate is
9.6 percent. The special duty rate for textile rayon imported
from Canada under NAFTA is one percent. The special duty rate
for acetate imported from Canada (where Hoechst Celanese has an
affiliate) under NAFTA is 0. The special duty rate for rayon
imported from Mexico under NAFTA is six percent. The special
duty rate for acetate imported from Mexico (where Hoechst
Celanese also has an affiliate) under NAFTA is 0. The
significant rate differential between the duties on imports of
acetate and rayon filament yarn from Mexico reflects the
recognition on the part of U.S. and Mexican tariff negotiators,
Congress and the U.Sers that there is a qualitative difference
between the two products, despite current, inconsistent
arguments to the contrary by Hoechst Celanese and Eastman
Chemical.
Rayon and Acetate Are Different Chemically
Although both rayon and acetate derive from wood pulp, the
chemicals and processes utilized to create rayon and acetate
spinning dope (the chemical compound from which filaments are
formed) are markedly different.
Rayon and Acetate Are Made Differently
Rayon is produced via a Wet Spinning process in which
filaments emerge from spinnerets into a water based solution.
Acetate is produced via a Solvent Spinning process in which
filaments emerge into a vertical tube in which solvents
evaporate into the air.
Rayon and Acetate Have Different Anti-Static Properties
Fabrics made of acetate have a strong tendency to cling.
Fabrics made of rayon do not. This is significant to wearing
comfort.
Rayon and Acetate Have Different Strengths
Rayon has considerably higher tenacity or breaking
strength. This is significant to product lifespan and to ease
of handling in garment manufacturing.
------------------------------------------------------------------------
Rayon Acetate
------------------------------------------------------------------------
cN/tex.......................... 17-21............. 10-15
------------------------------------------------------------------------
Rayon and Acetate React Differently to Moisture
Rayon has approximately double the capacity to regain
moisture from the atmosphere, meaning that it will hold a
considerably higher percentage of its own bone dry weight of
water than acetate without becoming wet. Likewise, if submerged
in water rayon will absorb four to five times more water than
acetate. These differences are significant to wearing comfort.
------------------------------------------------------------------------
Rayon Acetate
------------------------------------------------------------------------
Moisture regain at 70 F, 65 11-14 percent..... 6-7 percent
percent humidity:.
Moisture regain at 75 F, 95 26-28 percent..... 13-15 percent
percent humidity:.
Water Imbibition:............... 90-120 percent.... 20-28 percent
------------------------------------------------------------------------
Rayon and Acetate React Differently to Heat
Rayon chars and decomposes; acetate softens and melts; and
they do so at different temperatures. Rayon discolors at 284
degrees Fahrenheit and decomposes at 347-401 degrees
Fahrenheit. Acetate softens at 356 degrees Fahrenheit and melts
at 491 degrees Fahrenheit.
These differences are significant to dying, finishing and
processing.
Rayon and Acetate Have Different Stretch Capacity
Acetate has considerably greater capacity to stretch. This
is significant to wearing comfort, style and textile
processing.
------------------------------------------------------------------------
Rayon Acetate
------------------------------------------------------------------------
Extension of break, dry percent. 16-21............. 20-30
Extension of break, wet percent. 20-26............. 30-40
------------------------------------------------------------------------
Rayon and Acetate Must Be Dyed Differently
Rayon may be dyed by reactive, vat, direct, sulfur, or
basic dyestuffs. Acetate may only be dyed by dispersed
dyestuffs. This difference is significant to dying, finishing
and processing and to environmental issues.
Rayon and Acetate Have Different Reactions to Flame
Burning rayon leaves a white-gray ash. Burning acetate
leaves a dark lump.
Rayon and Acetate Have Different Densities
Rayon is a much denser fiber.
------------------------------------------------------------------------
Rayon Acetate
------------------------------------------------------------------------
Specific gravity (g/cm \3\)..... 1.52.............. 1.32
------------------------------------------------------------------------
Rayon and Acetate Have Different Supply Levels
The capacity of the two U.S. acetate manufacturers, Hoechst
Celanese and Eastman Chemical, is in excess of 200 million
pounds per annum. Hoechst Celanese accounts for approximately
75 percent of this volume. By contrast, U.S. imports of rayon
for textile end uses during the first eleven months of 1997
were less than 14 million pounds.
Rayon and Acetate Are Priced Differently
Rayon and acetate sell at considerably different price
points, with rayon being the more expensive fiber by far. 75 to
150 denier acetate put up on cones or tubes (small packages
containing single ends amounting to several pounds of yarn)
sells in the United States at approximately $1.80 to $2.25 per
pound. 75 to 150 denier acetate put up on beams (large
cylinders containing multiple ends amounting to several hundred
pounds of yarn) sells in this market at approximately $2.00 to
$2.40 per pound. By contrast, the average import value
(exclusive of duty) for all rayon for textile end uses brought
into the United States during the first eleven months of 1997
was $2.81 per pound. Adding marine freight and insurance and a
dealer's or distributor's mark-up to this figure would bring
the average U.S. market price for all rayon for textile end
uses imported into the United States during the first eleven
months of 1997 to above $3.00 per pound even without duty. The
price of high quality rayon imported from Germany and Holland
(which constituted over 37 percent of all textile rayon imports
during the first eleven months of 1997) currently ranges from
approximately $3.90 to $4.25 per pound for 100 to 150 denier
bright yarn on cones or tubes and from approximately $4.10 to
$4.45 for 100 to 150 denier bright yarn on beams. Although
inexpensive rayon package yarn is also being shipped into the
U.S. from Asia and Eastern Europe for textile end uses, this
yarn is of poor quality and not suitable for linings, velvets
or better apparel fabrications. Nor is the quantity of such
yarn (several hundred thousand pounds per month) sufficient to
affect the U.S. acetate market.
Rayon and Acetate Are Used Differently
Although Rayon and acetate are both consumed by the textile
industry, the two fibers serve distinctly dis in the
marketplace. For instance, rayon tends to be used for higher
priced goods requiring greater abrasion resistance and tensile
strength. Fabrics made of rayon tend to be more comfortable, to
cling less, and to last longer. Likewise, in sharp contrast to
rayon, acetate is not suitable for sewing or embroidery yarns
or for high twist crepe yarns. Similarly, acetate is not used
for industrial purposes. By contrast, approximately 13 percent
of the total U.S. imports of rayon during the first eleven
months of 1997 were applied to industrial end uses.
In sum, based on all comparative factors, including
quality, price, and usage, it remains ICF's position, and that
of dozens of purchasers of rayon filament yarn, that
continuation of the existing duty serves no useful commercial
or public policy purposes. The U.S. textile industry
overwhelmingly supports this position. Nonetheless, ICF has
entered into discussions with Hoechst Celanese to review the
basis for its opposition and to determine whether an
appropriate compromise would address Hoechst Celanese's
concerns and still provide U.S. consumers with the tariff
relief they need and support.
Conclusion
While not a complete panacea, a reduction of the ten
percent duty on the types of rayon filament yarn affected by
H.R. 2148 would lower the cost of these yarns to domestic
producers no longer able to buy a U.S.-made, duty-free rayon
filament yarn product. Such a duty reduction would thus go a
long way toward enhancing the ability of U.S. companies
manufacturing fabrics for apparel and home furnishings and
embroidery and similar decorative yarns--and of their customers
in the apparel and home furnishings industries--to compete more
effectively in their U.S. home market against imported products
and in the world market generally. It is also important to
emphasize that if the tariff reduction on rayon filament yarn
classified under HTS #5403.31.00 is accelerated pursuant to
NAFTA, significant imports of this product will be duty-free by
the end of 1998 or soon thereafter. This situation will create
an unfair and discriminatory competitive imbalance between
rayon filament yarn imports from Mexico and those from other
countries. Unless necessary and reasonable tariff relief is
granted to those non-Mexican imports, U.S. users of Mexican
yarn will benefit at the expense of other U.S. users of non-
Mexican yarn. The fact that the U.S. marketing subsidiary of a
major Mexican yarn producer and another company apparently
allied with it are opposing H.R. 2148 is clear evidence just
how valuable, albeit unjustified, an advantage the Mexican
producer has captured.
In short, ICF urges the Committee to include H.R. 2148 as
part of any miscellaneous tariff legislation approved by the
Committee.
<F-dash>
Table 1
------------------------------------------------------------------------
Supporter Location(s) Date of letter
------------------------------------------------------------------------
Akzo Nobel Industrial Fibers, Scottsboro, AL.... 8/14/97
Inc..
Allied Fabrics, Inc............. Belmont, NC....... 7/30/97
Bally Ribbon Mills.............. Bally, PA......... 7/31/97
Beaver Manufacturing............ Mansfield, GA..... 8/4/97
The Bibb Company................ Atlanta, GA....... 8/4/97
Porterdale, GA....
Bloomsburg Mills, Inc........... New York, NY...... 7/24/97
Bloomsburg, PA....
Monroe, NC........
Carthage Fabrics Corp........... Carthage, NC...... 8/1/97
New York, NY......
Clifton Yarn Mills.............. Clifton Heights, 7/24/97
PA.
CMI Industries Inc.............. Greensboro, NC.... 8/5/97
Clarkesville, GA..
New York, NY......
Columbia, SC......
Clinton, SC.......
Elkin, NC.........
Geneva, AL........
Stuart, VA........
Danville Chenille Co., Inc...... So. Danville, NH.. 8/8/97
Ethicon (Div. of Johnson & Somerville, NJ.... 8/4/97
Johnson). Coamo, PR.........
Caguas, PR........
Excel Elastic Corporation....... Northvale, NJ..... 8/5/97
Pawtucket, RI.....
Fabric Resources Ltd............ Great Neck, NY.... 7/31/97
Rock Hill, SC.....
Mullins, SC.......
Frank Ix & Sons, Inc............ New York, NY...... 7/30/97
Lexington, NC.....
Charlottesville,
VA.
Ge-Ray Fabrics.................. Morganville, NJ... 8/6/97
Asheville, NC.....
Augusta, GA.......
New York, NY......
Hoffman Mills Inc............... New York, NY...... 7/25/97
Shippensburg, PA..
Hope Industries................. Nashua, NH........ 8/6/97
Huntingdon Yarn Mills, Inc...... Philadelphia, PA.. 7/30/97
I.G. Textile Mills, Inc......... New York, NY...... 8/1/97
Jomac Inc....................... Warrington, PA.... 8/8/97
JPS Converter & Industrial Corp. New York, NY...... 8/5/97
Greenville, SC....
South Boston, VA..
Rocky Mount, VA...
Lincolnton, NC....
Kingsport, TN.....
Slater, SC........
Stanley, NC.......
Laurens, SC.......
Kent Manufacturing Co........... Pickens, SC....... 8/6/97
Kentex Industries, Inc.......... Hudson, NH........ 7/31/97
Keystone Weaving Mills, Inc..... Lebanon, PA....... 8/5/97
York, PA..........
Lawrence Schiff Silk Mills, Inc. Quakertown, PA.... 7/24/97
Bethlehem, PA.....
Allentown, PA.....
Carlisle, PA......
Newville, PA......
Lending Textile Co., Inc........ New York, NY...... 7/29/97
Montgomery, PA....
Lida Stretch Fabrics, Inc....... New York, NY...... 8/14/97
Charlotte, NC.....
J.B. Martin Company, Inc........ New York, NY...... 7/29/97
Leesville, SC.....
McGinley Mills, Inc............. Easton, PA........ 7/23/97
Phillipsburg, NJ..
Meder Textile Co., Inc.......... Port Washington, 7/17/97
NY.
Kings Mountain, NC
Metritek Corp................... Boca Raton, FL.... 8/6/97
Mohawk Fabric Co., Inc.......... Amsterdam, NY..... 7/17/97
Native Textiles................. New York, NY...... 7/28/97
Glens Falls, NY...
North American Corporation...... Elizabethton, TN.. 8/12/97
C. M. Offray & Son, Inc......... Chester, NJ....... 7/24/97
Hagerstown, MD....
Anniston, AL......
Leesville, SC.....
Watsontown, PA....
Danville, VA......
Richland Mills.................. Hialeah, FL....... 7/31/97
Robison-Anton Textile Company... Fairview, NJ...... 7/23/97
Clark Summit, PA..
Schneider Mills, Inc............ New York, NY...... 7/17/97
Taylorsville, NC..
Forest City, NC...
Shara-Tex Inc................... Vernon, CA........ 7/30/97
St. John Knits.................. Irvine, CA........ 8/6/97
Stonecutter Mills Corporation... Spindale, NC...... 8/4/97
New York, NY......
Trimtex Company, Inc............ Williamsport, PA.. 8/12/97
Twistex Yarns................... Oceanside, CA..... 7/22/97
Universal Connection............ Los Angeles, CA... 7/31/97
Wearbest Sil-Tex Mills Ltd...... Garfield, NJ...... 8/7/97
A. Wimpfheimer & Bro., Inc...... New York, NY...... 7/11/97
Stonington, CT....
Orange, VA........
Blackstone, VA....
Wm. E. Wright L.P............... West Warren, MA... 8/11/97
ASSOCIATIONS:
American Textile Mfgrs. Washington, D.C... 8/13/97
Institute.
Nat'l Knitwear & Sportswear New York, NY...... 8/12/97
Ass'n..
Textile Distributors Association New York, NY...... 7/23/97
------------------------------------------------------------------------
<F-dash>
Rayon Yarn Corp.
Spartanburg, SC 29307
January 17th, 1998
Mr. A. L. Singleton
Chief of Staff
Committee on Ways & Means
U.S. House of Representatives
Longworth House Office Building
Washington, DC 20515
I am writing for the official record to express strong opposition
to tariff bill HR 2148, which concerns the reduction, suspension, or
elimination of duties on rayon filament yarns (primarily from Europe
and Asia). These specific yarns are also currently being manufactured
by Celulosa y Derivados de Monterrey, SA de CV (CYDSA), in Monterrey,
Mexico, and sold and distributed by Rayon Yarn Corporation, an eight
year old U.S. subsidiary of CYDSA, based in Spartanburg, South
Carolina. The basis of our objection is that the reduction, suspension,
or elimination of such duties, would negate or minimize our trading
preference afforded under the North American Free Trade Agreement.
Prior to NAFTA, CYDSA identified a segment of the textile
manufacturing industry consisting of small to medium size companies
(mostly family owned) which would benefit from an American source of
rayon yarn. Subsequently, CYDSA invested over $5 million in inventory
to support these U.S. textile manufacturers and now supply rayon yarn
to a customer base of over 600 companies. By our calculations, this
translates to over 40,000 U.S. textile workers who ``benefit'' from
this product in some fashion. To further expand this U.S. industry,
CYDSA through Rayon Yarn Corp. and two other North Carolina companies
(Hickory Throwing Company and Diamante Group,LLC) is participating in a
$3.5 million Industrial Revenue Bond project to substantially increase
its employment base and customer service ability. The success of this
development is directly dependent upon our continued support under the
NAFTA trade agreement.
These European/Asian high-volume rayon filament producers are
intent upon ``dumping'' their products in to the U.S. market while
remaining protected by unfair (high) import duties in their own
countries. The allowance of such a ``dumping'' of rayon would pose
severe economic harm to our industry. Without proper tariff support,
this unreasonable advantage would force the closure of both our
production facility in Monterey, Mexico, and the U. S. subsidiary
locations in Spartanburg, SC and Hickory, NC. This closure would also
negatively effect the 600+ small to medium size companies who have come
to rely and thrived on our rayon product. We are the only domestic
source for these companies for small minimum orders. The overseas
producers would likely require container load minimums only which would
be unaffordable to many of our customers. Foreign monopolization of the
rayon filament yarn market would only dim the future for the small to
midsize textile industry base.
Finally, in the age of world-wide economies, it is clearly the
responsibility of the United States to insist upon ``level playing
fields'' for its domestic manufacturers. We never shy away from fair
competition in the international markets. But, we ask that you insure
equal market access to the European/Asian markets. Under NAFTA, Mexico
(and Canada) have committed to this. As a result, Mexico is one or the
only countries that we currently enjoy a positive trade balance.
Interestingly, CYDSA purchases 100% of its largest rayon raw material
(wood pulp) from the United Sates, in US$. If HR 2148 or any similar
legislation passes, the spirit of free trade (NAFTA) will be
undermined. The subsequent economic crisis in our industry will force
the closures of our operations. This will eliminate the production of
all rayon filament yarn from North American soil.
We thank you in advance for your attention to this serious matter.
Sincerely,
Steve Lathan
President, Rayon Yarn Corporation
<F-dash>
H.R. 2151
To amend the Harmonized Tariff Schedule of the United
States to correct the tariff treatment of costumes.
<F-dash>
Statement of Disguise, Inc.
In response to Chairman Crane's request for public comments
on miscellaneous tariff proposals, we want to state strong
opposition to H.R. 2151, a bill which would apply an enormous
duty on Halloween costumes and would primarily benefit one
company which is already dominant in the market.
The Content and Effect of H.R. 2151
H.R. 2151 would amend the notes to chapters 61 and 62 of
the Harmonized Tariff Schedule (HTS) by adding a new note
covering costumes and pieces or components thereof and amending
note 1(e) of HTS chapter 95 by inserting a provision for
costumes, and pieces or components thereof.
The effect of this change to the HTS would be to adopt a
strict policy that costumes are to be classified as apparel
that are subject to high rates of duty and are subject to
quotas, rather than to allow the Customs Service in some cases
to classify them as ``festive, carnival or other entertainment
articles.'' In practical terms, the question presented is
whether these lightweight, inexpensive costumes are ``toys'' or
are they ``clothing.'' If H.R. 2151 were enacted, the effect
would be to apply a 30% tax on American children who go ``trick
or treating'' and who attend Halloween parties.
The Issue is Already Being Addressed by the Customs Service and No
Congressional Action is Needed
The Customs Service right now has under consideration a
ruling request to reclassify these products in the same manner
sought in the legislation. Customs published a notice in the
Federal Register of December 22, 1997, (copy attached) a notice
of this petition which requests comments by February 20, 1998.
We believe that the request should be rejected by Customs and
we are opposing it. We also believe, however, that Customs--not
the Congress--is the appropriate place to address this
question. Serious consideration of the treatment of festive
articles has been given over the years both by Customs and by
the courts. In November of 1997, Customs issued guidance to the
field in an advanced level informed compliance publication
called, ``What Every Member of the Trade Community Should Know
About: Classification of Festive Articles.'' This document
resulted from the decision of the U.S. Court of Appeals for the
Federal Circuit in Midwest of Cannon Falls v. United States,
1997 U.S. App. LEXIS 21617. We believe that Congress should
allow Customs to do its job and not step into this situation
with special legislation.
H.R. 2151 is Essentially Private Legislation
It is our belief that one company, headquartered on Long
Island, New York, would be the overwhelming beneficiary of this
legislation. We understand that this company already is by far
the dominant company in the industry, with over half of the
U.S. market. According to data from Piers Imports, this company
has imported substantial quantities from China, as well as
product from Hong Kong, Taiwan and India. According to industry
sources, this company has built a production operation in
Mexico to make products there. The costumes from Mexico will
not suffer the 30% duty because of the North American Free
Trade Agreement. Congress should not provide what is, in
effect, private relief through legislation that fits the
circumstances of one company, indeed the largest company in the
industry.
H.R. 2151 Addresses No Public Need
Producers of Halloween products are doing very well as the
popularity of the holiday has increased in recent years.
According to a survey cited in the New York Times, Halloween is
second only to Christmas in production of total retail revenue.
This is not part of a depressed apparel and textile industry
which Congress historically has tried to help though quotas and
high tariffs.
Disguise, Inc., and Other Competitors Should Not Be Harmed
Disguise, Inc., is located in San Diego, California. It has
manufactured and distributed Halloween costumes since 1986. The
company employs approximately 80 permanent employees and up to
500 seasonal employees in California. In 1997, Disguise was
acquired by Cesar, a French company dating back to 1842 as a
maker of masks and costumes. Seventy-five percent (75%) of
costumes sold by Disguise in the United States are produced in
this country.
Of the imported products distributed by Disguise, a portion
is produced in developing countries, such as Madagascar. These
imports would not benefit from the Generalized System of
Preferences if they are reclassified as clothing. Of course,
they also would not benefit from duty-free treatment under
NAFTA, like the imports of the dominant company which seeks
this legislation. Madagascar is a poor country where jobs of
the kind involved here are badly needed. The Ways and Means
Committee has indicated its intention to consider trade
legislation this year to assist southern Africa. Avoiding the
passage of legislation that would hurt these small island
countries off east Africa would be consistent with that larger
goals.
Disguise plans to continue manufacturing in California.
However, the flexibility of Disguise and other companies in the
industry should not be taken away by legislation that is
designed to help one company--a company that is already the
dominant player and a company that is also an importer. Given
what is happening in the marketplace, the effect of H.R. 2141,
if enacted, would be to pressure companies in our industry to
import all of the costumes they sell from Mexico or some other
country that would still enjoy duty-free status. This would
occur because the market leader is already moving toward use of
the benefits of NAFTA and the balance of the industry would
have to compete with its price.
Conclusion
Congress should not help one company raise its prices by
taxing American children and their families who want to enjoy
Halloween. The provisions of H.R. 2151 should not be included
by the committee in a miscellaneous tariff bill. There is no
economic justification for making such a change. The Customs
Service can and is addressing the issue, and should be allowed
to finish that job.
[GRAPHIC] [TIFF OMITTED] T8732.001
[GRAPHIC] [TIFF OMITTED] T8732.002
[GRAPHIC] [TIFF OMITTED] T8732.003
<F-dash>
Mattel, Inc.
Customs Administration
El Segundo, CA 90245-5012
January 24, 1998
Mr. A.L. Singleton
Chief of Staff,
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Re: Subcommittee on Trade Release No. TR-19 dated Dec. 22, 1997.
Comments in Opposition to Passage of H.R. 2151
Dear Mr. Singleton:
In Release No. TR-19 dated December 22, 1997, the Subcommittee on
Trade requested comments on numerous Bills, including H.R. 2151, ``To
amend the Harmonized Tariff Schedule of the United States to correct
the tariff treatment of costumes.'' Mattel, Inc. submits that the
current tariff treatment of costumes, dress-up sets, playsuits and
parts and accessories thereof is correct, and, therefore, opposes H.R.
2151 for the reasons stated below:
I. If enacted, H.R. 2151 would cause those costumes, dress-up sets,
playsuits and parts and accessories therefor, now classified in chapter
95 of the Harmonized Tariff Schedule of the United States (HTSUS), to
be excluded from chapter 95 and classified as wearing apparel in
chapters 61 and 62, HTSUS.
If enacted, H.R. 2151 would add new notes in Chapters 61
and 62, HTSUS, stating that those chapters cover ``costumes and
pieces or components thereof.'' Additionally, current Note 1(e)
to Chapter 95, HTSUS, would be amended to exclude from
classification in that chapter ``fancy dress, or costumes and
pieces or components thereof.'' Since the particular ``costumes
and pieces or components thereof'' which are intended to be
affected by this legislation are not defined, it is apparent
that the intent of this legislation is to change the
classification of any and all articles which might be a type of
costume, and any and all articles which might be a ``piece'' or
``component'' of a costume, from Chapter 95, HTSUS, which
covers toys and festive articles, to Chapters 61 and 62, HTSUS,
which cover wearing apparel.
As explained more fully below, for many years the toy
industry has been manufacturing products exclusively for use by
children in play, commonly referred to in the toy industry as
dress-up sets and playsuits. These products routinely contain
many types of components, including textile components which
imitate wearing apparel (shirts, skirts, blouses, dresses,
etc.), textile components which are apparel accessories or
which are classified outside of Chapters 61 and 62, HTSUS
(i.e., headwear, belts, sweat bands, lanyards, etc.), and non-
textile components (i.e., shoes, jewelry, ribbons, barrettes,
combs, purses, magic wands, spurs, badges, etc.). Whether
called costumes, dress-up sets or playsuits, these articles,
including their constituent parts and accessories, have
routinely been classified by the Customs Service in Chapter 95,
HTSUS, provided they meet certain criteria with respect to
construction, essential character, how they are marketed and
the expectations of ultimate consumers.
Since it is apparent that the intent of H.R. 2151 is to
have all ``costumes,'' and ``pieces'' and ``components''
thereof classified in Chapter 61 or 62, HTSUS, adoption of this
legislation would result in the wholesale reclassification of
many components currently classifiable outside of Chapter 61
and 62, into those chapters, which were intended only to cover
wearing apparel. Equally important, any attempt to clarify this
legislation to specifically distinguish which components are
not to be classified in Chapter 61 and 62, would likely result
in a reversal of the Customs Service practice of classifying
these articles together, as a unit or set, under a single
tariff heading. Reversal of this practice would require
importers to split up each unit or set into its separate parts
or components for separate classification. This would impose an
administrative burden on toy companies, and would impose an
even larger burden on the Customs Service, which currently has
only a limited capacity to handle separate classifications for
numerous parts when entry documents are transmitted to it
electronically, and which is currently experiencing a severe
shortage of resources in many areas.
II. Costumes, dress-up sets, playsuits and parts and accessories
thereof which are principally designed for the amusement of children in
role-playing, have traditionally been viewed by the relevant industry
as a class or kind of toys.
Almost everyone is familiar with the fact that many toys
are modeled on objects which are used in real life for
utilitarian purposes. These types of toys include toy musical
instruments, toy tool, doctor and nurse sets, toy typewriters,
flashlights, radios, etc. Almost everyone is also familiar with
the fact that one form of play in which children engage is
role-playing. This form of play includes dressing up or
outfitting oneself to imitate adult behavior or professions
(movie stars/actresses, mothers, ballerinas, doctors and
nurses, etc.). Boys and girls use costumes, dress-up sets,
playsuits, old clothing, clothing accessories, such as hats and
gloves, etc., in combination with the accoutrements of the
profession (doctor and nurse instruments, cowboy spurs,
holsters and guns, etc.) to reenact adult behavior. Enclosed as
Exhibit 1 is a portion of an internal Mattel study compiled in
1988, entitled ``CHILDREN'S PLAY PATTERNS--A Collective Review
of What We Know About How Kids Play,'' which specifically
discusses this type of play among 3 to 12 year old girls.
For at least 50 years the toy industry has been
manufacturing and marketing as toys, costumes, dress-up sets,
playsuits and parts and accessories therefor, which are clearly
not a form of wearing apparel; which are not durable, or even
washable; which, generally, are either worn in conjunction with
regular clothing, or which are made to be worn only during play
and not during an extended period; which are sold primarily in
toy stores or the toy departments of mass-merchandisers; and,
which enable children to imitate adult behavior in role-
playing. These articles are generally distinguishable from the
real articles which they imitate, by, among other things, their
relatively inexpensive construction and price, their limited
ability to be used for an extended period of time, their
fanciful themes, and differences in sizing (often ``one size
fits all'') from real apparel; the companies which manufacture
them; and the manner in which they are marketed.
Enclosed as Exhibit 2 are pages from various issues of
``Playthings,'' the largest trade publication serving the toy
industry. These excerpts, which date from 1970 to the present,
illustrate the types of products described above, and clearly
indicate that numerous toy companies have been manufacturing
and marketing these products for an extended period. Even the
company which is the chief proponent of H.R. 2151 is listed in
these materials, placed a full-page advertisement in
``Playthings,'' and maintains its sales office in the Toy
Building, at 200 Fifth Avenue in New York.
Enclosed as Exhibit 3 are pages from the 1997 catalogs of
Mattel's subsidiary, Arco, illustrating the types of dress-up
sets and accessories therefor which Mattel markets. Even a
cursory examination of the articles in Exhibit 3 indicates that
they are a type of product which is manufactured exclusively
for use by children during role-playing, are sold in toy stores
and toy departments of mass-merchandisers, and are not a type
of wearing apparel.
III. Enactment of H.R. 2151 would result in higher prices for retailers
and consumers, which would discourage if not preclude continued
production, importation and sale of dress-up sets, costumes and
playsuits which the industry regards as a class or kind of toy.
Enactment of H.R. 2151 would subject dress-up sets,
costumes and playsuits which the industry regards as a class or
kind of toy, now classified in Chapter 95, free of duty, to
classification in Chapters 61 and 62, in the same tariff
headings with regular wearing apparel, subjecting them to
significant duty assessments.
In addition, classification of these products as wearing
apparel in Chapters 61 and 62, HTSUS, instead of in Chapter 95,
would also subject them to quantitative restrictions (quotas),
requiring the acquisition of visas in order to ship them to the
United States. However, inquiries by doll fashions
manufacturers abroad, who also produce dress-up sets, playsuits
and costumes, have established that they would be unable to
acquire visas for the exportation of their products to the
United States, because their governments have advised them that
such quotas are available only to textile and apparel companies
and not to toy companies.
Even if quota allotments and visas were available, there is
usually a substantial charge associated with obtaining them,
which would have to be added to the landed cost of the
products, increasing the prices which retailers would have to
pay for these articles.
Most toy retailers work on narrow profit margins. Adding
duty and quota charges to the landed cost of these products
would in all likelihood result in retailers being unable to
market dress-up sets, playsuits and costumes at a reasonable
profit. Increases in the prices of these products to consumers
would also be unacceptable. As a consequence, continued
production of most dress-up sets and playsuits now marketed
year-round for role-playing purposes, might have to be dropped,
if they are reclassified in Chapters 61 and 62 and subjected to
the duties applicable to regular wearing apparel.
IV. The enactment of H.R. 2151 is contrary to the agreement on textiles
and clothing adopted by the United States as part of the Uruguay Round
of Multilateral Trade Negotiations.
As part of the Uruguay Round of Multilateral Trade
Negotiations, the United States adopted several multilateral
agreements. One of these agreements is the Agreement on
Textiles and Clothing [the Agreement]. Article 4 of the
Agreement, a copy of which is enclosed as Exhibit 4, contains
the following provision in Paragraph 2:
2. Members agree that the introduction of changes, such as
changes in practices, rules, procedures and categorization of
textile and clothing products, including those changes relating
to the Harmonized System, in the implementation or
administration of those restrictions notified or applied under
this Agreement should not upset the balance of rights and
obligations between the Members concerned under this Agreement;
adversely affect the access available to a Member; impede the
full utilization of such access; or disrupt trade under this
Agreement. (Emphasis added)
Clearly, changing the classification of merchandise
(costumes, dress-up sets and playsuits) which is currently not
subject to quota to insure that it is subject thereto is a
change in practice, a change in the categorization of products
and a change relating to the Harmonized System. Additionally,
as demonstrated above, such a change will clearly disrupt trade
in this merchandise. Accordingly, such a change in
classification is contrary to the Agreement, and, if enacted,
would probably result in the United States being the subject of
complaints filed with the appropriate body of the World Trade
Organization by countries which export this merchandise.
V. It is premature at this time, while the issue is pending before
Customs headquarters, for Congress to consider legislation which would
mandate the classification of all costumes, dress-up sets and playsuits
in chapters 61 and 62 , HTSUS.
On December 22, 1997, the United States Customs Service had
a notice published in the Federal Register, a copy of which is
enclosed as Exhibit 5, advising the public that a domestic
interested party had filed a Petition pursuant to 19 U.S.C.
1516, contesting the current tariff classification of certain
costumes, and requesting comments from the public concerning
the proper classification of this merchandise. A copy of the
Petition filed in this matter with the Customs Service is
enclosed as Exhibit 6. The Petition, dated July 7, 1997, was
filed on behalf of Rubie's Costume Co., Inc. of Richmond Hill,
New York, which is also believed to be the party which
requested H.R. 2151.
Notably, in arguing that all costumes are classifiable in
Chapters 61 and 62, HTSUS, the Petition concerns itself only
with merchandise which the Petitioner refers to as
``costumes,'' and does not discuss or refer to the items
manufactured by the toy industry which are commonly referred to
as ``dress-up sets'' or ``playsuits,'' and which are
principally designed for the amusement of children and marketed
exclusively as toys. Rather, by omitting any discussion of
dress-up sets and playsuits, and by concentrating on the
similarities between costumes and regular wearing apparel, the
Petition implies that there is little or no basis for
classifying, in Chapter 95, those particular dress-up sets and
playsuits which constitute a class or kind of toys. For
example, in claiming that the current tariff classification of
certain costumes is erroneous, the Petition claims on Page 13,
in pertinent part, as follows:
It is clear that costumes should be classified as ``fancy
dress of textiles'' that fall within Chapters 61 and 62,
[HTSUS] and are expressly excluded from Chapter 95. (Emphasis
added)
If, as asserted in the Petition, it is ``clear'' that the
proper tariff classification of all costumes, dress-up sets and
playsuits is in Chapters 61 and 62, HTSUS, it is also clearly
unnecessary and superfluous to request legislation requiring
such a result. Rather, the Petitioner should await a decision
from the Customs Service and/or the Courts before taking up the
valuable time and resources of the Congress on such a matter.
While a full discussion of this matter is beyond the scope
of these comments, Mattel is of the opinion that, at a minimum,
the types of dress-up sets and playsuits which are manufactured
specifically for sale in toy stores and toy departments of
mass-merchandisers clearly constitute a class or kind of toy,
and are properly classifiable in Chapter 95, HTSUS. Comments
concerning this assertion will be submitted to the Customs
Service in response to the Domestic Interested Party Petition.
Once the Customs Service, and, if litigated, the Courts, issue
determinations concerning the scope of the various HTSUS
provisions involved, it may well be the case that this matter
will have been clarified to the satisfaction of all parties
involved. If not, Congress may then wish to examine this issue
in more detail.
VI. Conclusion.
For at least 50 years, the toy industry has been
manufacturing and marketing articles specifically for the
amusement of children during play, which are commonly known as
dress-up sets and playsuits, and which are clearly a class or
kind of toy. The intent of H.R. 2151 is to have all costumes,
as well as dress-up sets, playsuits and parts and accessories
thereof, classified in Chapters 61 or 62, HTSUS. The
reclassification of these articles in Chapters 61 and 62 would
undeniably increase the cost of such products to toy companies,
retailers and consumers, to a point where the articles would no
longer be marketed or purchased. If enacted, H.R. 2151 is
likely to result in toy manufacturers being unable to obtain
the necessary textile visas for products which the industry
regards as toys. Moreover, enactment of H.R. 2151 would be
clearly contrary to the Agreement on Textiles and Clothing to
which the United States is a party. Finally, because the
proponents of H.R. 2151 have claimed in a Petition filed with
the Customs Service that it is ``clear'' that all costumes are
classifiable in Chapters 61 and 62, HTSUS, consideration of
this legislation at this time is premature.
For the reasons discussed hereinabove, it is apparent that
H.R. 2151 is a highly controversial piece of legislation which
should not be enacted or included in any omnibus tariff Bill
being considered by the Ways and Means Trade Subcommittee.
Sincerely yours,
Kelly Bundy
Manager, Customs Administration
[Attachments are being held in the Committee's files.]
<F-dash>
H.R. 2236
To suspend until January 1, 2000, the duty on Irganox 1520.
No comments submitted.
<F-dash>
H.R. 2237
To suspend until January 1, 2000, the duty on Irganox 1425.
No comments submitted.
<F-dash>
H.R. 2238
To suspend until January 1, 2000, the duty on Irganox 565.
No comments submitted.
<F-dash>
H.R. 2239
To suspend until January 1, 2000, the duty on Irganox
1520LR.
No comments submitted.
<F-dash>
H.R. 2240
To suspend until January 1, 2000, the duty on Irgacure 184.
No comments submitted.
<F-dash>
H.R. 2241
To suspend until January 1, 2000, the duty on Darocure
1173.
No comments submitted.
<F-dash>
H.R. 2242
To suspend until January 1, 2000, the duty on Irgacure 819.
No comments submitted.
<F-dash>
H.R. 2243
To suspend until January 1, 2000, the duty on Irgacure 369.
No comments submitted.
<F-dash>
H.R. 2244
To suspend until January 1, 2000, the duty on Irgacure
1700.
No comments submitted.
<F-dash>
H.R. 2245
To suspend until January 1, 2000, the duty on Irgacor
252LD.
No comments submitted.
<F-dash>
H.R. 2246
To suspend until January 1, 2000, the duty on Irgacor 1405.
No comments submitted.
<F-dash>
H.R. 2268
To suspend temporarily the duty on a certain chemical.
No comments submitted.
<F-dash>
H.R. 2269
To suspend temporarily the duty on a certain chemical.
No comments submitted.
<F-dash>
H.R. 2270
To suspend temporarily the duty on a certain chemical.
No comments submitted.
<F-dash>
H.R. 2271
To suspend temporarily the duty on a certain chemical.
<F-dash>
H.R. 2287
To apply the rates of duty effective after December 31,
1994, to certain water resistant wool trousers that were
entered, or withdrawn from warehouse for consumption, after
December 31, 1988, and before January 1, 1995.
No comments submitted.
<F-dash>
H.R. 2322
To suspend the duty on the organo-phosphorus compound ACM
until January 1, 2000.
No comments submitted.
<F-dash>
H.R. 2324
To suspend the duty on the synthetic organic coloring
matter C.I. Pigment Yellow 109 until January 1, 2000.
No comments submitted.
<F-dash>
H.R. 2325
To suspend the duty on the synthetic organic coloring
matter C.I. Pigment Yellow 110 until January 1, 2000.
No comments submitted.
<F-dash>
H.R. 2326
To suspend the duty on the organic chemical
parachlorobenzonitrile until January 1, 2000.
No comments submitted.
<F-dash>
H.R. 2334
To suspend temporarily the duty on ferroboron.
<F-dash>
Statement of AlliedSignal Inc. on H.R. 2334
Legislation to Temporarily Suspend the U.S. Duty on Ferroboron As
Provided for in 7202.99.50 of the Harmonized Tariff Schedule of the
United States
January 26, 1998
AlliedSignal Inc. appreciates the opportunity to comment on
H.R. 2334, introduced by Representative Rodney P. Frelinghuysen
of New Jersey. This measure provides for the temporary
suspension of the U.S. import duty on ferroboron, which comes
under 7202.99.50 of the Harmonized Tariff Schedule of the
United States.
Granting a suspension of the duty on ferroboron is
justified and appropriate. To our knowledge there are no
domestic producers of ferroboron capable of manufacturing to
our product specifications. For this reason passage of H.R.
2334 would not have a detrimental impact on the domestic
ferroalloy industry. Furthermore, the key end product into
which this most expensive, yet essential, raw material is
incorporated would be able to be priced more competitively in
important export markets like China and India. This is vital to
the success of that product, which saves energy and reduces
harmful greenhouse gas emissions, and to the livelihoods of
those Americans who produce it and who are heavily dependent on
its ability to succeed as an export.
This statement is intended to describe: the product
proposed for duty suspension; the end products into which
ferroboron is incorporated, and some of their uses; the
importance of the duty suspension to the export competitiveness
of one of the principal U.S.-manufactured products into which
ferroboron is incorporated; and, the merits of and
justification for granting the duty suspension as proposed.
Description of AlliedSignal Inc.
AlliedSignal manufactures advanced technology products for
the aerospace, automotive and other markets. Some of our main
aerospace products are jet propulsion engines, commercial
avionics such as the enhanced ground proximity warning
collision-avoidance system, and small-scale power systems. Our
automotive product names include Fram<Register> filters,
Autolite<Register> sparkplugs, Prestone<Register> car care
products, and Garrett<Register> turbochargers for passenger
cars, light trucks and heavy equipment. We also are a leading
producer of nylon and industrial fibers, specialty chemicals,
and advanced materials for the electronics and electric power
distribution sectors.
AlliedSignal has some 70,500 employees worldwide,
approximately 50,000 of whom are in the United States. The
company has manufacturing operations throughout the United
States, with principal facilities located in Arizona,
California, Missouri, Maryland, Ohio, Virginia, New Jersey,
Kansas and South Carolina.
Description of the Product and Its Uses
Ferroboron is a boron-containing ferroalloy used by
AlliedSignal as a major raw material in the production of
amorphous metal. It is the single most expensive component of
the amorphous metal manufacturing process. Boron-containing
amorphous metals, among other purposes, are used by the
electric utilities industry to enhance the efficiency of
electric power distribution transformers. Distribution
transformers equipped with boron-containing amorphous metal
cores are significantly more energy-efficient and less
environmentally-degrading than transformers employing silicon
steel cores. Boron-containing amorphous metals also have
applications in computer and laser power supplies, retail
security systems, and high frequency transformers and switches.
In addition to the manufacture of amorphous metal,
ferroboron is also used as a hardening agent in the production
of certain types of steel.
Description of AlliedSignal Amorphous Metal
AlliedSignal pioneered the development and
commercialization of amorphous metal ribbon. This material
exhibits a structure in which the metallic atoms occur in a
random pattern. As opposed to the rigid grain structure of
silicon steel, this unique ``amorphous'' structure enables much
easier magnetization and de-magnetization. The extent of the
energy losses that occur in a transformer core is determined by
how easily the core can switch magnetization: improved
switching capability translates into lower core loss. This is
the key to the Amorphous Metal Distribution Transformer's
(AMDT) effectiveness in sharply reducing the no-load losses
that occur in transformers' magnetic cores, and the greenhouse
gas emissions associated with the production of the wasted
energy. Ferroboron is the key raw material enabling both the
production and the superior performance of amorphous metal
ribbon.
AMDTs constructed with boron-containing amorphous metal
cores yield 60-80% lower no-load loss than transformers
employing silicon steel cores. Further, the corollary benefit
of AMDT use is to reduce greenhouse gas emissions associated
with electric power production. As AMDTs would reduce core
energy losses by 60-80%, CO2 and SO2 emissions associated with
these losses are reduced similarly because fuel consumption
(typically coal) is reduced.
(Note: A transformer's ``core'' is its ``engine'' or
``heart.'' Accordingly, it determines the energy-efficiency and
environmental performance characteristics of the transformer
into which it is integrated. The core's composition or
``material''--either boron-containing amorphous metal or
silicon steel--is the heart of the core.)
Export Potential and Competitiveness Issues of Amorphous Metal-Core
Transformers
The benefits and performance of AMDTs are unquestioned,
having been conclusively demonstrated in the US, Japan and many
other countries. Vital growing U.S. export markets--e.g. China
and India--are also the most logical target markets for AMDTs.
Two of the primary areas of focus for such countries, in terms
of their power/energy infrastructure development, are enhancing
energy conservation efforts and reducing greenhouse gas
emissions. Companies with leading-edge technologies designed to
positively address these two areas will be well situated to
seize export opportunities in these markets.
For example, in May 1996 the Chinese State Planning
Commission, State Economic and Trade Commission, and State
Science and Technology Commission issued a joint energy
conservation policy outline for China, something AlliedSignal
had strongly encouraged. This outline stated the obvious need
to save energy in China, and noted some means to that end. It
specifically recommended AMDTs as a way to achieve these goals.
While the benefits of AMDT use are tangible and
significant, they and the extensive research and development
that has yielded them come at a cost. An amorphous metal
transformer has an initial cost 20-30% higher than the
relatively energy-wasting and environmentally-unfriendly
transformers it seeks to replace. Fortunately, because of its
many benefits, the total owning cost of an amorphous metal
transformer over its 20-30 year life is far lower than the
initially-cheaper competing product.
Regrettably, notwithstanding the fact that the overall
economics are attractive and favor AMDTs, the initial higher
cost can deter the purchase of the more efficient and
environmentally-beneficial transformers. This is especially
true in countries where, while the benefits of AMDTs are most
direly needed, potential customers are most negatively impacted
by the ``initial cost'' issue. Suspending the import duty on
the raw material bearing much responsibility for this initial
cost disadvantage would reap a significant impact on the cost-
competitiveness of the very beneficial end product.
Suspending the Duty on Ferroboron is Warranted and Vital
To the best of AlliedSignal's knowledge--and we are by far
the single largest U.S. customer/consumer of the ferroboron
subject to H.R. 2334--there is no known U.S. manufacture of
ferroboron capable of satisfying AlliedSignal's demands for
this product.
To date AlliedSignal has not been able to demonstrate a
substitute for ferroboron in the manufacture of amorphous
metal. Ferroboron is a required component allowing the
production of amorphous metals and allowing AMDTs their energy-
saving and greenhouse gas-reducing qualities. The ferroboron on
which the duty suspension is sought is not merely incidental to
the production of amorphous metal and the superior performance
of an AMDT; it is integral. Because there is no substitute
domestically-manufactured product currently benefiting from the
present five percent duty rate on ferroboron, no adverse impact
on the domestic ferroalloy industry is anticipated by granting
this suspension.
Summary
Reducing the cost of an amorphous metal transformer's most
important and costly raw material, by suspending the import
duty paid on it, would go a long way toward enhancing the
export competitiveness of the end product. It would further
encourage prospective customers to procure the most advanced
and beneficial transformer technology available, and not merely
repeat the mistakes of the past by continuing to use inferior
technologies, with all attendant negative repercussions.
This would yield positive results both in terms of
increasing energy conservation and decreasing environmental
degradation in the developing nations that represent the most
promising market opportunities for an important product made by
American workers.
Thank you again for the opportunity to comment.
<F-dash>
H.R. 2336
To temporarily decrease the duty on certain industrial
nylon fabrics.
<F-dash>
Statement of the American Textile Manufacturers Institute
On Miscellaneous Trade and Tariff Legislation--H.R. 2336
This is in response to Ways and Means Committee Release TR-
19, dated December 22, 1997, requesting comments on certain
miscellaneous trade and tariff proposals. The American Textile
Manufacturers Institute (ATMI) is the trade association for the
domestic textile industry. Our members operate in more than 30
states and account for more than 80 percent of all textile
fibers consumed in the United States.
ATMI would like to express our opposition to H.R. 2336,
which is item #24 in the list of bills contained in TR-19. This
legislation would reduce the duty from 15.6 percent to 6.7
percent on imports of certain filament nylon woven fabrics
currently classified under tariff schedule heading 5407.41.00,
which generally includes woven fabrics containing 85 percent or
more by weight of filaments of nylon or other polyamides.
An ATMI member company is in the process of preparing to
produce the fabric defined in H.R. 2336 for use in commercial
quantities following customer evaluation of sample quantities.
This domestic manufacturer believes that this highly
specialized fabric represents an opportunity for increased
sales and domestic production. Therefore, ATMI is opposed to
congressional passage of H.R. 2336.
Carlos Moore
Executive Vice President
January 26, 1998
<F-dash>
H.R. 2339
Relating to the tariff treatment of nuclear fuel
assemblies.
<F-dash>
Statement of Robert S. Bell, Jr., Vice President & General Manager, ABB
CENO, Windsor, Connecticut and Dr. Bruce J. Kaiser, Vice President, ABB
CENO, Hematite, Missouri
In Support of H.R. 2339, to Correct the Tariff Treatment of Nuclear
Fuel Assemblies
Summary:
The Harmonized Tariff Classification System inadvertently
increased the duty more than five-fold on pelletized uranium
oxide contained in zirconium tubing, from the rate that had
been in place since 1970. The purpose of H.R. 2339 is to
restore the 1970 rate and refund the unintended duty that has
been paid.
Tariff Classification History for Pelletized Uranium Oxide/Zirconium
Tubing
In 1970 the U.S. Customs Service decided to distinguish
between: (1) reactor-ready nuclear fuel assemblies; and (2)
pelletized uranium oxide contained in zirconium tubing that is
not reactor-ready. The Tariff Schedules of the United States
(TSUS) then in use had no specific classification for nuclear
reactors or fuel assemblies. The Customs Service applied the
following TSUS classifications:
--Nuclear Fuel Assemblies: 660.10 TSUS (``steam and other
vapor generating boilers . . . and parts thereof'')
--Pelletized Uranium Oxide: 422.50 TSUS
--Zirconium Tubing: 658.00 TSUS
According to research by the Customs Service, the 1970
decision governed importation of nuclear fuel assemblies and
pelletized uranium oxide in zirconium tubing without change
until the Harmonized Tariff Classification System (HTS) went
into effect in 1989.
HTS was intended to standardize tariff classifications
worldwide, without increasing duty on any item. Understandably,
however, HTS created a U.S. heading for nuclear reactors and a
subheading for ``nuclear fuel elements.'' Inadvertently the
subheading includes not only reactor-ready nuclear fuel
assemblies, but also pelletized uranium oxide in zirconium
tubing that would have been classified pre-HTS under 422.50/
658.00 TSUS.
Pre-HTS, pelletized uranium 422.50 TSUS was free of duty;
zirconium tubing 658.00 TSUS was dutiable at 5.5 percent. These
classification numbers were simply converted to HTS numbers at
the same rates:
------------------------------------------------------------------------
TSUS TSUS HTS
Item Number Rate HTS Number Rate*
------------------------------------------------------------------------
Pelletized Uranium Oxide....... 422.50 0 2844.20.0010 0
Zirconium Tubing............... 658.00 5.5% 8109.90.0000 5.5%
------------------------------------------------------------------------
* The GATT Agreement which became effective on January 1, 1995 reduces
tariff rates on thousands of items in equal annual increments over
five years. The rate for 8109.90.000 HTS will be 3.7 percent in 1999
and is thus 4.8 percent in 1996 and 4.4 percent in 1997. The rate for
8401.30.0000 HTS is scheduled to be 3.3 percent in 1999. However,
annual reductions under 8401 HTS and other Chapter 84 headings were
made contingent upon an international accord on government procurement
rules; the rate for 8401.30.0000 is 5.9 percent in 1996 and 5.2
percent in 1997.
The rate for the new HTS subheading for nuclear fuel
elements was 6.5 percent. Since the uranium oxide is about 80
percent of the value, the new HTS classification for nuclear
fuel elements increased the duty on pelletized uranium oxide in
zirconium tubing by more than five-fold.
------------------------------------------------------------------------
HTS
Item HTS Number Rate*
------------------------------------------------------------------------
Nuclear Reactors/Fuel Elements.................. 8401.30.0000 6.5%
------------------------------------------------------------------------
* The GATT Agreement which became effective on January 1, 1995 reduces
tariff rates on thousands of items in equal annual increments over
five years. The rate for 8109.90.000 HTS will be 3.7 percent in 1999
and is thus 4.8 percent in 1996 and 4.4 percent in 1997. The rate for
8401.30.0000 HTS is scheduled to be 3.3 percent in 1999. However,
annual reductions under 8401 HTS and other Chapter 84 headings were
made contingent upon an international accord on government procurement
rules; the rate for 8401.30.0000 is 5.9 percent in 1996 and 5.2
percent in 1997.
ABB CENO, headquartered in Windsor, Connecticut, with a
plant in Hematite, Missouri, has paid $1.8 million in
unintended duty as a result of the inadvertent HTS
reclassification. Five entries occurred for contract delivery
dates in 1996 and 1997:
------------------------------------------------------------------------
Entry Date Entry Number
------------------------------------------------------------------------
January 16, 1996.......................... 062-230014-5
February 13, 1996......................... 062-230085-5
November 25, 1996......................... 839-4030989-7
December 2, 1996.......................... 839-4031053-1
January 21, 1997.......................... 839-4031591-0
------------------------------------------------------------------------
These will be the only such entries for ABB CENO because
product for all subsequent orders will be manufactured in the
U.S.
Operations of ABB CENO
In the 1980s, ABB Atom Inc. was established in the United
States to market a type of nuclear fuel assemblies for use in
reactors at U.S. utilities. These nuclear fuel assemblies were
being produced very successfully for use in Europe by ABB Atom
Inc.'s parent in Vasteras, Sweden.
The first step in ABB Atom Inc.'s business plan was to
reach agreements with several utilities to test the nuclear
fuel assemblies. If the testing programs succeeded, ABB Atom
Inc. would establish manufacturing facilities in the U.S. to
produce commercial quantities. Subsequently, ABB Atom Inc.'s
business was taken over by ABB Combustion Engineering Nuclear
Operations (ABB CENO), headquartered in Windsor, Connecticut.
The early stages of the testing program were so successful
that the number of testing agreements was reduced. ABB CENO
planned to invest in the upgrade of its nuclear fuel
manufacturing plant in Hematite, Missouri to pelletize uranium
oxide for that type of nuclear fuel assemblies, and was awarded
a contract to supply the Washington Public Power Supply Stem
(WPPSS).
Unfortunately the capacity of ABB CENO's Missouri plant to
pelletize uranium oxide for the WPPSS type of nuclear fuel
assemblies could not be established for the first deliveries
due under that contract in 1996 and 1997.
ABB CENO was able to pelletize the uranium oxide at the
Missouri plant for the February, 1998 delivery under the WPPSS
contract. ABB CENO has received a contract to supply the Public
Service Electric and Gas Company (PSE&G) at Hope Creek, New
Jersey and is a strong contender for other contract awards.
The February, 1997 contract delivery to WPPSS will be the
last to involve pelletization of enriched uranium in Sweden.
Assembly will continue to be done here, with the welding
process Hematite uses for other nuclear fuel assemblies being
phased into use for the WPPSS deliveries over the next three
years.
Conclusion
From 1970 until the creation of a new heading and
subheadings under the Harmonized Tariff Classification System
(HTS) in 1989, the U.S. Customs Service classified shipments of
bundles of nuclear fuel rods distinctly from nuclear fuel
assemblies, applying the duty-free rate to the uranium oxide
and the rate of 5.5 percent to the zirconium tubing. The new
HTS classification has had the effect of increasing the duty on
ABB CENO's bundles by more than five-fold--despite the intent
of HTS not to increase duty on any item.
The unintended duty increase imposed on the 1996 and 1997
WPPSS deliveries of ABB CENO's nuclear fuel bundles amounts to
$1.8 million. Legislation to restore the 1970 rate and refund
the unintended duty is a matter of equity.
The unintended duty has been a significant financial burden
to the start-up of the ABB CENO business. Legislation to refund
the unintended duty is necessary to clarify that the U.S. is
hospitable to the creation of U.S. jobs and manufacturing
plants to make goods here that would otherwise be imported.
Refusal to enact the legislation would send the wrong signal
worldwide.
If the HTS is not corrected and the unintended duty
increase refunded, there could be U.S. job losses, with
profound significance. ABB CENO's business plan, including the
testing agreements and the WPPSS and PSE&G contracts, is based
on the use of uranium which has been enriched in the U.S.
However, the Swedish affiliate company could be competitive in
the U.S. market if it used enriched uranium from the former
Soviet States. Refunding the unintended duty would put ABB CENO
in a better position with respect to that company.
For the sake of equity and U.S. jobs, legislation to
correct the HTS and refund the unintended duty of $1.8 million
on pelletized uranium oxide/zirconium tubing should be enacted
into law as soon as possible.
<F-dash>
H.R. 2498
To amend the Harmonized Tariff Schedule of the United
States to extend to certain fine jewelry certain trade benefits
of insular possessions of the United States.
No comments submitted.
<F-dash>
H.R. 2520
To suspend the duty on halofenozide until January 1, 2001.
No comments submitted.
<F-dash>
H.R. 2521
To suspend the duty on modified secondary and modified
secondary-tertiary amine phenol/formaldehyde copolymers until
January 1, 2001.
No comments submitted.
<F-dash>
H.R. 2576
To suspend the duty on <greek-b>-Bromo-<greek-b>-
nitrostyrene until January 1, 2001.
No comments submitted.
<F-dash>
H.R. 2583
To amend the Tariff Act of 1930 with respect to the marking
of finished golf clubs and golf club components.
No comments submitted.
<F-dash>
H.R. 2686
To suspend temporarily the duty on beta hydroxyalkylamide.
No comments submitted.
<F-dash>
H.R. 2770
To amend the Tariff Act of 1930 to provide for a deferral
of the duty on large yachts imported for sale at boat shows in
the United States.
No comments submitted.
<F-dash>
H.R. 2771
To amend the Harmonized Tariff Schedule of the United
States relating to the definition of raw value for purposes of
raw sugar import tariff rate quota.
<F-dash>
Maloney Commodity Services, Inc.
Stamford, Connecticut 06902
January 8, 1998
Mr. A. L. Pete Singleton
Chief of Staff
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515
Subject: H.R. 2771
We refer to the ``Advisory'' from Chairman Crane dated December 22,
1997, No. TR-19 announcing Requests for Written Comments on Additional
Miscellaneous Trade and Tariff Legislation.
Included in the ``Advisory'' is Paragraph 33:
``H.R. 2771 would amend Additional U.S. Note 5 to Chapter 17 of the
HTS relating to the definition of raw value for purposes of the raw
sugar import tariff-rate quota.''
We support H.R. 2771 in the language in which it is now written
which was based on our original preparation of same and its sponsorship
by Congressman Christopher Shays at our request. We respectfully and
formally request, therefore, the inclusion of this provision in the
Miscellaneous Trade and Tariff Bill to be introduced by Chairman Crane
in the Second Session of the 105th Congress.
This letter is also being submitted with an accompanying 3.5-inch
diskette, as instructed in the ``Advisory.''
This bill is non-controversial and revenue neutral to revenue
positive. It is either supported or not objected to by all facets of
the sugar industry both domestic and foreign. It technically corrects
an inequity in the manner by which the U.S. Customs Service measures,
calculates and records the polarization (or sweetness) conversion
factor in the imported raw cane sugar tariff rate quota, TRQ, so that
it conforms to the same commercial method by which ``raw value'' is
treated, calculated, recorded and indeed ``paid for,'' by U.S. sugar
refineries.
Further, this bill conforms to the U.S. sugar refineries'
commercial contracts and the No. 14 rules of the Coffee, Sugar and
Cocoa Exchange, Inc., New York, with respect to sugars with polarity of
99.0 degrees or less. Since the HTSUS defines raw sugar as sugar having
polarity of 99.5 degrees or less, the bill would extend the raw value
conversion factor to the additional one-half degree, but would not
affect the No. 14 rules or the refiners' obligations to make payments
for this one-half degree under their contracts.
Simply stated, it is the conversion factor rate from MTRV (Metric
Tons Raw Value) (the higher nominal quantity figure) to the actual
shipped quantity MTCW (Metric Tons Commercial Weight) for which the
foreign country quota holder is being unjustly penalized. U.S. sugar
refiners universally pay 2.75 percent premium for raw sugar which
polarizes at 98 degrees. Yet U.S. Customs requires that the raw value
be assessed 3.50 percent for the same level of polarization (MTRV). In
other words U.S. Customs' charge against a country's quota comprehends
a higher polarization or sweetness factor for the same cargo than all
U.S. refineries commercially pay. As such, the Customs formula does not
reflect economic reality and therefore unjustly penalizes foreign
shippers for the differences.
Since this conversion factor for ``commercial raw value'' is
included in the HTSUS headnote authority (Chapter 17), it has the
effect of law, and only a change in legislation can rectify this
inequity in the U.S. raw cane sugar tariff rate quota (TRQ).
Rather than delve into all the details of this suggested change--
please consider the following:
On an estimated fiscal year quota of 2,000,000 MTRV using 1.035
percent as the conversion factor, basis 98 degrees (which is presently
in effect), the shipment quantity would be 1,932,367 MTCW. Using the
more correct and realistic 1.0275 percent method as the conversion
factor, the shipment quantity would be 1,946,472 MTCW. Using an
approximate U.S. quota price of $.20 per pound, FOBST country of
origin, or about $440 per MTCW, the difference is only 14,105 metric
tons. Hence as far as the domestic sugar producers are concerned this
quota quantity increase is infinitesimal, whereas to the quota holding
foreign sugar producers as a whole their 14,105 metric tons at $440.00
per MT equals and represents $6,206,200, and it does not cost the U.S.
government one penny. It may even produce revenue to the extent that
these sugars could be dutiable--depending on origin.
Naturally, we are seeking the earliest possible date for this bill
to become effective.
For your information and guidance, all the individuals at USDA and
USTR who review, draft and operate this TRQ are familiar with this
bill, as are their respective legal counsels at USDA and USTR.
In conclusion, we repeat and reiterate our support for H.R. 2771.
Thank you in advance for your prompt consideration and action to
our request.
Sincerely,
Robert F. Maloney
President
RFM:jlm
cc: The Honorable Christopher Shays, Attn: Mr. Joel White
<F-dash>
H.R. 2857
To suspend the duty on 2,6-Dimethyl-m-Dioxan-4-ol Acetate
until January 1, 2001.
No comments submitted.
<F-dash>
H.R. 2899
To amend the Harmonized Tariff Schedule of the United
States to provide for reduced duty treatment for certain fully
assembled bicycle wheels.
<F-dash>
Hed Cycling Products
White Bear Lake, MN 55110
January 23, 1998 (3:30 PM)
A.L. Singleton
Chief of Staff
Committee on Ways and Means, U.S. House of Representatives
Dear Mr. A.L. Singleton
I was just informed today (January 23, 1998 3:30 PM) of the
proposed amendment of H.R. 2899 This would amend Chapter 87 of the HTS
by inserting a new subheading with the article description for
subheading 8714.97.00 for bicycle wheel assemblies consisting of rim,
carbon-fiber spokes, and hub flange assembled in one piece, or the
above plus a rear freewheel/free hub, to provide an MFN duty trate of
1.5 percent. The currant rate is 5 percent and I feel the lowered rate
would create a problem for my company. It appears this bill is written
for a single company who has recently moved their manufacturing
facilities to Mexico.
I have been manufacturing bicycle wheels for 12 years and if you
lower the duty rate it will create unfair trade for my company. I am a
small wheel manufacturer in Minnesota and by allowing less duty instead
of more hurts my business. I was only informed today about this
proposed bill and I am very much against it. Please contact me if you
have anymore questions.
Sincerely,
Anne Hed
Owner Hed Cycling Products
<F-dash>
Innovations in Composites, Inc.
Vista, CA 92083
January 28, 1998
A.L. Singleton
Chief of Staff, House Ways and Means Committee
U.S. House of Representatives
1102 Longsworth House Office Building
Washington, DC 20515
Dear Mr. Singleton:
We take strong issue with H.R. Bill 2899, by Congressmen Shays and
Maloney of Connecticut proposing a reduction in tariff for the
importation of carbon fiber bicycle wheels. As a company that produces
such wheels in the United States, we feel strongly that this amendment
bill gives unfair advantage to only one specific company.
Our company, Innovations in Composites, produces a carbon-fiber
wheel brand called Spin wheels in the United States of America. Mr.
Maloney and Shays' bill gives unfair competitive advantage to Spinergy,
the only other carbon-fiber wheel company with market share in the US
who moved their manufacturing to Mexico. This company, of course,
maintains an office in Congressman Maloney and Shays' district.
Innovations in Composites had the opportunity to close up shop in
the United States and move operations to Mexico just like Spinergy. We
chose to stay and keep our American workers. Spinergy did not, as they
became part of ``that giant sucking sound'' and moved to Mexico. Now
that they have chosen to leave the US worker behind, they are asking
through H.R. Bill 2899 to cheat that same worker from across the
border. This is having their cake and eating it too and is just plain
wrong no matter how you cut it.
Briefly: 1) We are a competing company who manufactures one piece
carbon fiber bicycle wheels in the USA, and provide jobs for Americans
in manufacturing and sales.
It should be noted that Mr. Maloney's aide who wrote H.R. 2899 was
not informed of our company's existence or of our Spin wheels. We are
Spinergy's #1 competitor.
2) Spinergy operates a manufacturing facility in Mexico. A
successful attempt at passing this bill simply bolsters their company's
profitability, by lowering import tariffs by 8.5%.
3) If the amendment does pass, it benefits one company and one
company only. It hurts other American players in the marketplace, who
comply with stringent OSHA regulations, higher wage requirements, and
face unfair competition if the tariffs are lowered. In this way,
American manufacturing jobs face a serious threat, but not in the way
that Mr. Maloney is trying to aide his flailing constituent company.
While it's in the interest of the Connecticut congressmen to keep
the pork in their district, we feel an act of Congress should benefit
all sections of the USA, not one particular company in one voting
district. The North American Free Trade Agreement has a phase in period
that should not be adjusted to suit a single constituent of a wealthy
district.
Please feel free to contact me.
Best regards,
Kirk Jones
President
<F-dash>
H.R. 3083
To suspend temporarily the duty on Grilamid TR90.
No comments submitted.
-