Uncertainties Abound as WTO's 2005 Deadline Looms
Next year, there may be quotas on blue jeans and T-shirts coming from China, a reinstatement of import quotas on Chinesemade bras, and a scarcity of container space for goods coming from Asia. Then again, maybe not. The number of uncertainties involved in importing apparel and textiles from overseas is growing as world events change as rapidly as a runway model.
At a Nov. 18 lunchtime seminar organized by the California Fashion Association as part of its International Customs Series, experts talked about import compliance and how it affects a company’s profitability.
Panelists, including Robert Krieger, president of Norman Krieger Inc., a Los Angeles customs broker and freight forwarder, customs attorney Elon Pollack and Bruce Berton, director of international business consulting at Stonefield Josephson Inc., covered everything from the North American Free Trade Agreement (NAFTA) to the World Trade Organization to the Central American Free Trade Agreement, outlining what may be in store for manufacturers sourcing their goods overseas.
“In the last few weeks, we have heard that the government is going to be enforcing NAFTA very carefully for textiles and apparel,” Krieger said.
The U.S. government will be scrutinizing import documents and affidavits carefully to ensure imported apparel has really been made in Mexico and not transshipped from Japan or China. “They have been known in the past to remove NAFTA privileges,” Krieger noted.
Among the other importing issues covered were:
bull; The African Growth Opportunity Act, which allows goods made in 37 African countries to come to the United States duty and quota free. Panelists said the act may have some advantages but the paperwork and time it takes to transport goods may eat up the money saved by not paying duties. Gap Inc. is testing manufacturing capabilities in Africa now, sending most of the goods to Europe.
bull; Documentation of goods shipped from China during the early part of 2005. The documentation should show exactly when the goods left China to prove they were oceanbound after Jan. 1. Officially, goods are not out of China until they have entered international waters.
bull; Letters of credit with Chinese companies. Quota visas should be included in the transaction because some goods may still be limited if safeguard measures are placed on them next year.
bull; Price quotes from Chinese manufacturers. Panelists said these manufacturers are quoting prices that do not include the cost of quota. That may change if the U.S. government decides to install quotas on 10 different categories next year.
bull; The growth of free-trade agreements. When President Bush came into office in 2000, the United States only had trade agreements with Canada, Mexico and Israel. Now the United States has trade agreements with several countries, including Singapore, Chile, Australia, Morocco and Jordan. Recently, the Bush administration began freetrade negotiations with the United Arab Emirates and Oman. As the free-trade agreements increase, so will the complications and paperwork for importing apparel and textiles, seminar participants said. —Deborah Belgum
