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CHINA TRADE ISSUES DOMINATE AS JCCT CONVENES IN WASHINGTON Senior trade officials from the United States and China convene in Washington this week for the 21st annual U.S.-China Joint Commission on Commerce and Trade (JCCT) meeting. In anticipation of the meeting, members of the Senate Finance and House Ways and Means Committees have sent letters (Senate letter; House letter) urging the Administration to use the meetings to address a number of long simmering trade and economic issues, including intellectual property rights, rare earth trade restrictions and, of course, currency valuation. The currency issue remains a major source of Congressional attention. Several Senators, in fact, are working to secure Senate approval of a bill (H.R. 2378) previously approved by the House that would make it easier for the Administration find that undervalued currency represents an illegal subsidy in countervailing duty cases against China and other countries. One scenario being pursued by several Senators is to attach the House passed China bill to the bipartisan tax measure (see separate article) that Congress is considering this week. Although AAFA strongly supports the tax measure, AAFA and many members of the business community remain strongly opposed to H.R. 2378. (Steve Lamar)
CONGRESS SCRAMBLES TO COMPLETE WORK BEFORE ADJOURNMENT Members of Congress are working furiously this week to complete work on a series of "must pass" bills before Congress adjourns for the year. Both the House and Senate are working toward a self imposed adjournment deadline of this coming Friday, December 17, although some scenarios could have either or both Houses of Congress working into the coming week. Much of the attention has been on a nearly $900 billion package that will renew expired business tax breaks, extend other expiring tax cuts, make a temporary cut in payroll taxes and extend unemployment insurance. While the legislation enjoys the support of Congressional Republicans and the Obama Administration, many Congressional Democrats are concerned that the legislation is too heavily titled toward providing benefits to higher income taxpayers. Conventional wisdom holds that the legislation will ultimately be approved, especially in light of polls suggesting that 70 percent of Americans support the measure. Work is also proceeding on a measure that will fund the government past December 17, when funding for the government currently expires. Although both parties are anxious to avoid a federal government shutdown, Members of Congress have not yet reached a consensus on how long a funding measure should last and at exactly what funding level it should be set. The contentious political issue of earmarks is also complicating this legislative battle. In either case, it is expected that Congress will fund the Federal Government at least through February 2011, and possibly until the end of the current fiscal year (September 30, 2011). (Steve Lamar) TRADE PROVISIONS QUEUED UP FOR POSSIBLE ACTION House Ways and Means Chairman Sandy Levin (D-MI) on December 13 introduced a stand alone bill to advance several expired and expiring trade provisions. Entitled the Omnibus Trade Act of 2010 (H.R. 6517), the legislation includes a number of AAFA-supported provisions that would extend the expiring Andean Trade Preferences Act (ATPA), extend the expiring Generalized System of Preferences (GSP), extend expiring Trade Adjustment Assistance (TAA) provisions, extend and make technical fixes for the cotton and wool trust funds and enact pending miscellaneous tariff bill (MTB) provisions. Several of these provisions were candidates for inclusion in either the tax package or the funding bill (see separate article). However, a combination of politics, timing, and policy disagreements prevented those measures from being included in those other bills. The House is currently slated to take up the measure tomorrow, December 15, under a special parliamentary procedure that expedites consideration by the full chamber. What remains unclear is if there is sufficient time and momentum for the legislation to be considered by the Senate and enacted before Congress adjourns for the year. (Steve Lamar)
DOD RESPONDS TO AAFA INQUIRY ON REVERSE AUCTION/LPTA POLICY In August, AAFA sent a letter to Defense Logistic Agency Troop Support (DLA-TS) Commander Brigadier General Scott Chambers to express the industry's opposition and concern with DLA-TS' announcement to begin including reverse auction and Low Price Technically Acceptable (LPTA) clauses in all future apparel and footwear solicitations. DLA-TS finally responded to AAFA's letter on December 3. DLA-TS' response stated that they intended to only use these policies for "non-complex items." Further, DLA-TS explained that they have only utilized these policies three times to date and plan to use reverse auction and LPTA mostly as a negotiating tool. (Kurt Courtney) DOD RESPONDS TO AAFA LETTER ON COTTON WITH ECONOMIC PRICE ADJUSTMENT PROPOSAL Defense Logistics Agency Troop Support (DLA-TS) sent out an informal request for comments on December 9 to the domestic apparel manufacturing base to seek information on the possible use of economic price adjustment (EPA) clauses for cotton in future contracts due to the recent rise of cotton prices worldwide. The letter was in response to AAFA's December 3 letter to Secretary of Defense Robert Gates complaining about the cotton situation. Cotton prices have been soaring over the last several months due to India's restriction of cotton and cotton yarn exports (India is the 2nd largest cotton exporter in the world). India's restriction, which breaks World Trade Organization (WTO) rules, has led to other sectors buying up alternatives sources of cotton, including cotton produced domestically, causing a shortage in supply. (Kurt Courtney) DEFENSE AUTHORIZATION BILL REMAINS STALLED The Senate on December 9 fell two votes short of the sixty votes needed to obtain cloture, end debate and move forward with the FY2011 Defense Authorization Bill. The vote failed by a vote of 58-42. The failure was due in large part to the continued opposition of the proposed repeal of the "don't ask don't tell" policy concerning gays serving openly in the military. Many Republicans also demanded that the bill wait until the tax extender issue had been resolved. After this most recent failure, it is unlikely that the Senate will take action on the Defense Authorization Bill before the end of the year. Without an authorization bill, power over the defense budgets rests solely with House and Senate appropriators, allowing them to dictate the Armed Forces pay roll and contracts. The Senate may have to consider a "skinny" version of the bill that does not include "don't ask don't tell" or other controversial provisions in order to get it passed by the end of the year. (Kurt Courtney) AAFA COMMENTS ON FTC PROPOSED "GREEN GUIDES" AAFA submitted comments December 10 to the Federal Trade Commission (FTC) on the FTC's recently revised Green Guides. Although welcoming the Guides, the comments note several concerns with respect to the Guides' guidance for recycled content, certifications and seals, and "free of" claims. AAFA also stressed that, as Business to Business guides, the FTC should pay more attention to business perceptions than was apparent in its analysis. At the December 7 AAFA Environmental Committee meeting, more than 50 AAFA members and guests also discussed the Green Guides and other environmental topics. (Steve Lamar) PRODUCT SAFETY — MORE CALIFORNIA PROPOSITION 65 NOTICES ISSUED Professional California Proposition 65 litigant the Consumer Advocacy Group in recent weeks has issued three new "60-day" notices alleging that brands and retailers sold footwear, handbags and children's bags/apparel in California that contained phthalates in violation of Prop 65. The notices serve as intent to bring a lawsuit against the recipients alleging that the products sold in California contain certain chemicals in violation of a California law known as Proposition 65 (Prop 65).There were 28 separate notices served in the month of November alone to apparel and footwear related manufacturers and retailers. Proposition 65 is a California law that requires "warning labels" on ALL products (not just children's products) sold in California that contain lead, phthalates, cadmium and any one of 850 other chemicals that the State of California believes could cause cancer or reproductive toxicity. Prop 65 allows so-called "citizen enforcers" to enforce the law. NGOs, other groups and even private Californian citizens can sue in California courts and collect part of the fines. (Rebecca Mond) AAFA AND COALITION SEND LETTER TO ICANN ON PROPOSED GTLD EXPANSION AAFA joined several business groups and trade associations in sending a December 8 letter express continued concern over the Internet Corporation for Assigned Names and Numbers (ICANN) ongoing proposal to expand generic top level domains (gTLDs), such as ".com" and ".net," to allow by May 2011 to include such domain names as ".disney" or ".aafa." For several years, brand owners across several industries have expressed grave concern with the ability of anyone to claim widely known trademarks for their own use. Further, the letter explains the enormous cost on brand owners to have to file defensive registrations to prevent cybersquatters from stealing their names. (Kurt Courtney) CPSC RECALLS TODDLER GIRL GARMENTS DUE TO CHOKING HAZARD The Consumer Product Safety Commission (CPSC) announced December 9 the voluntary recall of 1,200 pairs of toddler girl pants and shorts. The garments, which were manufactured by American Eagle Outfitters and sold at 77kids by American Eagle stores, were recalled due to a choking hazard posed by the metal clasp at the waistband detaching from the garment. No incidents or injuries were reported. (Rebecca Mond) AAFA SUBMITS PETITION TO CPSC REGARDING THIRD PARTY TESTING FOR FLAMMABILITY STANDARDS, CPSC ISSUES BALLOT VOTE CLARIFYING CERTIFICATION FOR NON-CHILDREN APPAREL SUBJECT TO FLAMMABILITY STANDARDS AAFA recently submitted a petition to the Consumer Product Safety Commission (CPSC) regarding third party testing as it pertains to 16 CFR Part 1610 — the flammability standard for textiles. The petition requested the CPSC extend the third-party testing certification date (currently November 16, 2010) for apparel subject to the flammability standard by an additional 60 days and accept third party testing done on or after August 18, 2009. The petition sighted several logistical and financial issues raised by the industry in an AAFA survey released in November. Included in the responses were concerns over the low number of accredited third party testing facilities causing back ups and increasing delays in receiving test results. Confusion over the nature of accreditation for testing facilities and the lifting of the stay of enforcement of testing and certification were main issues also raised in the AAFA petition. In response, the CPSC issued a ballot vote to lift the stay of certification for adult apparel subject to the flammability standard. If approved, certification would be required for apparel manufactured 30 days after the date of approval. The vote, which was due on December 13th, has not yet been published. (Rebecca Mond) TRUTH IN FUR LABELING ACT PASSED SENATE BY UNANIMOUS CONSENT The U.S. Senate on December 7 approved without amendment by unanimous consent the Truth in Fur Labeling Act of 2010. the bill aims to improve the accuracy of fur product labeling. The bill, which already passed the House, now goes to President Barack Obama for his signature. The bill removes the small value exemption granted in the Fur Products Labeling Act, which omits labeling requirements for products valued at less than $150. Once Obama signs the bill into law, all products containing fur must be labeled. The bill further confers that individual states have the right to adopt or enforce more restrictive fur labeling requirements than those required by federal law. (Rebecca Mond) UNCLE SAM WANTS YOU...TO COMMENT! Congress and many government agencies are soliciting comments on a range of issues that may affect your business. For a list of upcoming comments, please click here.
AAFA WELCOMES NEW MEMBER: SOURCE ASEAN FULL SERVE ALLIANCE AAFA HOSTS A PROVOCATIVE DISCUSSION ON LEADERSHIP Speaking to a full Boardroom at the Fashion Institute of Technology, AAFA's A Conversation with Global Leaders featured some of the industry's most recognized mavericks in apparel and footwear. Touching on today's critical elements, Rob DeMartini, New Balance Athletic Shoe, Inc., Mindy Grossman, HSN Inc., Ken Hicks, Foot Locker Inc., and Dr. Jill Guindon-Nasir, The Ritz Carlton Leadership Center offered an honest and candid look into what it takes to lead. Moderated by Bill D'Arienzo, WDA BrandMarketing Solutions, the panelists drew from career experiences as they revealed key points, including: failure is the biggest catalyst to learning and growth; culture is an important dynamic that defines a company while leadership sets the tone. Continuing: It's not about getting people to do; it's about getting people to want to do; and that leadership is a values based skill; you can't be successful if you don't act from your core. AAFA thanks its participants for a stellar evening and 24/7 for its sponsorship. (Susan Lapetina)
US Senators Push for China Currency Bill from Reuters Two U.S. senators on Monday launched a last-ditch effort to pass legislation to pressure China to raise the value of its currency by trying to attach it to a tax plan headed toward expected approval. More WTO Rejects Chinese Complaint Against US's Anti-Dumping Tariffs on Tires from Bloomberg World Trade Organization judges rejected China's complaint that U.S. tariffs on Chinese car and light-truck tires violate global trade rules, saying the Obama administration "did not fail to comply with its obligations." More GOP Tactic Threatens South Korea Pact from Politico Republican congressional leaders say they will use a new trade deal with South Korea as leverage to move a long-delayed agreement with Colombia, a strategy that could galvanize Democratic opposition to free trade and force the White House to choose between its liberal base and the business community. More Clinton Says Haiti's Challenges 'Almost Overwhelming' from Bloomberg U.S. Secretary of State Hillary Clinton said Haiti needs international cooperation to overcome "almost overwhelming" challenges after a disputed election, last year's earthquake and a cholera epidemic. More |
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