to Reject Job-Destroying Haiti and AGOA Provisions

WASHINGTON, DC – The U.S. textile industry and the labor union UNITE HERE urged the House and Senate to reject the Haiti and AGOA provisions contained in H.R. 6406. Elements of Congress have been pushing to attach these provisions to tax and trade legislation in this week’s lame duck session of Congress. Industry leaders and labor officials decried attempts to railroad these proposals through the House and Senate without hearings or adequate consultation with the textile sector.

Textile industry leaders and labor officials also thanked the Republicans and Democrats in the House and Senate that have been working hard to highlight the concerns of the textile industry during this lame duck session of Congress.

Textile Industry Quotes on the Haiti/AGOA Legislation

National Council of Textile Organizations (NCTO) President Cass Johnson said, “We would like to thank U.S. Senator Elizabeth Dole, U.S. Senator Lindsey Graham and members of the House Textile Caucus for their strenuous efforts to stop this job-destroying trade legislation. We are proud of the firm, principled stands they have taken on behalf of workers and on behalf of fair and balanced trade.”

We continue to urge the congressional leadership to reject any backroom deal that will send U.S. jobs to foreign countries like China. When China wins and U.S. workers lose because of a backroom deal made at 2:00 AM in the halls of Congress, then that is a sad day. It is also shows that leadership has failed to grasp the message sent by voters worried about outsourcing and trade giveaways on Election Day. The ultimate irony deal is that in its eagerness to sacrifice U.S. jobs to help Haiti, all the U.S. Congress has accomplished is to make Haiti a transshipment point for apparel from China at the expense of the entire Western Hemisphere. CAFTA trade legislation will mean little for the textile and apparel industries in this region if Haiti becomes law,” Johnson added.

Noting that nearly three million U.S. manufacturing jobs have been lost since 2001, American Manufacturing Trade Action Coalition (AMTAC) Executive Director Auggie Tantillo said, “Congress should reject these proposals because they will cost thousands of U.S. manufacturing jobs and drive up the foreign trade deficit.”

“No hearings have been held on these measures. No vetting has been done. No formal debate has occurred. All that is going on is a blatant attempt to ramrod ill-advised legislation through Congress to favor foreign special interests in countries like China at the expense of the U.S. textile industry and its workers. This is the very type of ‘business as usual’ that voters repudiated in November’s election. We thank U.S. Senator Lindsey Graham, U.S. Senator Elizabeth Dole and members of the House Textile Caucus for their efforts on behalf of the U.S. textile industry and its workers,” Tantillo continued.

“Instead of trying to pass bills that will export more U.S. jobs to foreign countries, Congress should be focusing its efforts on trade partners like China who cheat by manipulating their currency and on countries that use a value-added tax to subsidize their exports and to unfairly tax imports of U.S.-made products,” Tantillo concluded.

“The Haiti bill alone jeopardizes several hundred million dollars in U.S. textile and apparel exports to Haiti and the CAFTA countries. If passed, the third-party country fabric and labor provisions will turn U.S. textile and apparel trade with Haiti from a two-way street to a one-way road,” said National Textile Association (NTA) President Karl Spilhaus.

UNITE HERE labor union General President Bruce Raynor said, “Less than a month after voters sent a clear signal by retiring many supporters of these sham trade deals, this lame duck vote will only put more workers at risk in this country, while ignoring the well-documented sweatshop conditions endured by Haitian and African workers. We want trade agreements that take labor standards and enforcement seriously.”

Quick Facts About the Haiti/AGOA Bills

HAITI (HOPE) • Haiti legislation such as that contained in H.R. 6406 could eliminate most or all U.S. exports textile and apparel exports to Haiti as well as harm U.S. exports to Mexico and the CAFTA countries. U.S. textile and apparel exports to Haiti totaled $220 million in 2005.

• Haiti is the lowest-wage apparel producer in the Western Hemisphere. As a result, its apparel exports to the United States have grown by 29 percent during the last year to 240 million square meters equivalent (SME). By value, Haiti’s exports are up 11 percent and now total $432 million. This is in sharp contrast to the CAFTA countries which have seen their apparel exports to the United States fall by 10 percent.

• Under current law, with limited exceptions, Haiti must use either U.S. or Haitian-made components in garments it assembles to receive duty-free treatment from the United States.

• In contrast, H.R. 6406 proposes a separate tariff preference level (TPL) for woven apparel of 50 million SME. This TPL allows Haiti to import fabrics from third-party countries like China and still receive duty-free treatment as long as some of the garment assembly is done in Haiti.

• H.R. 6406 also proposes a second TPL for Haiti that starts at 222 million SME in the first year and could grow as high from anywhere to 450-600 million SME (CAFTA’s TPL was 100 million) by the end of year five. This second TPL also includes an unenforceable value-added rule for apparel assembled in Haiti. Under this measure, 50 percent of a garment’s value can come from any country in the world as long as the other 50 percent comes from Haiti, the United States or any of the preference or free trade partner countries. This means that a garment assembled in Haiti from Chinese and Nicaraguan components can enter the United States duty-free under this bill.

• The 50 percent value added rule of origin is completely unenforceable because once a garment is assembled and shipped, it is impossible for a Customs agent to determine the precise value and origin of components used in a garment. Documentation can be easily falsified with very little ability for Customs to verify.

AGOA • The AGOA bill includes a TPL for African countries under H.R. 6406 equal to 775 million SME beginning in year one, with future increases tied to the growth of U.S. apparel imports. The TPL will enable African producers to use inputs from third-party countries like China and still export apparel to the United States duty-free. • The bill also includes duty-free entry for certain textile products made in Africa. • The AGOA provisions run through 2012.

Quick Facts About the U.S. Textile Industry

• The U.S. textile and apparel industry lost 2,800 jobs in November and 41,800 jobs in the first eleven months of 2006. Since January 2001, employment in U.S textile and apparel manufacturing has a fallen by 452,700 (a plunge of more than 43 percent), declining from 1,047,200 to 594,600.

• Also during the same time frame, U.S. textile production dropped 19.7 percent while U.S. apparel production plummeted 44.6 percent.