By Sean Mussenden
Media General News Service
Media General News Service
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WASHINGTON--The Bush administration said yesterday that socks imported from Honduras were hurting sock manufacturers in North Carolina and Alabama, and moved closer to imposing a tariff on socks shipped here from the tiny Central American nation.
Since the passage of the Central American Free Trade Agreement in 2005 opened the door to cheaper Honduran socks, manufacturers in these states complained that the flood of imports was hastening the decline of the domestic footwear industry.
Over the next 90 days, Bush administration officials will determine how large a tariff to impose on Honduran imports — and how long to keep it in place.
Since 2005, imports from Honduras have risen sharply, while domestic production has fallen. Many smaller domestic manufacturers wanted the administration to impose a tariff on cotton, wool and man-made material socks for three years, which they said would give them enough time to retool their businesses in the face of the changing global clothing economy.
The administration said yesterday, however, that if it ultimately decides to impose a tariff after consulting with the Honduran government later this year, it would cover only cotton socks, and not wool or man-made material.
"It’s a huge disappointment," said Jim Schollaert, a lobbyist for several small domestic sock-makers in Washington. "It shortchanges the domestic industry."
For now, it’s unclear exactly how long the tariff would stay in place, or how large it would be. The maximum rate would be 13.5 percent.
A memo published yesterday regarding the decision by the Commerce Department’s Committee for the Implementation of Textile Agreements, or CITA, caused some confusion.
Schollaert interpreted the technically-worded memo as saying that the tariff would last only through the end of the year. But the office of Rep. Robert Aderholt, R-Ala., whose district includes several domestic sock-makers, interpreted it differently.
The memo suggested that the tariff would stay in place for between one year and three years, said Hood Harris, Aderholt’s chief of staff.
"Bottom line is the congressman will be pushing for the maximum three-year tariff," he said.
Asked for clarification on the memo, Commerce Department officials declined to discuss it on the record.
"The substantial increases in imports of cotton socks from Honduras found during the investigation have led CITA to move forward with the safeguard process in accordance with the Agreement," Deputy Assistant Secretary of Commerce Matt Priest said in a prepared statement.
The move toward re-imposing a tariff that was in place before CAFTA was widely expected. In 2005, Aderholt cast a tiebreaking vote that led to CAFTA’s passage after securing a promise from the Bush administration to re-impose the tariff on Honduran socks if the domestic industry suffered.
Dennis Martin, the president of North Carolina Sock in Hickory, N.C., said that trade officials need to impose the tariff for as long as possible.
"If it’s only on for a year, the market will once again be flooded in the United States. The ones winning out here would be the foreign companies," he said.
Several larger sock companies — some based in the U.S., some overseas — that had set up operations in Honduras opposed the move. Putting a tariff on Honduran socks would only open the door to more imports of Asian imports, not help U.S. companies, they said.
(Sean Mussenden can be reached at smussenden@mediageneral.com or 202-680-9467).
Since the passage of the Central American Free Trade Agreement in 2005 opened the door to cheaper Honduran socks, manufacturers in these states complained that the flood of imports was hastening the decline of the domestic footwear industry.
Over the next 90 days, Bush administration officials will determine how large a tariff to impose on Honduran imports — and how long to keep it in place.
Since 2005, imports from Honduras have risen sharply, while domestic production has fallen. Many smaller domestic manufacturers wanted the administration to impose a tariff on cotton, wool and man-made material socks for three years, which they said would give them enough time to retool their businesses in the face of the changing global clothing economy.
The administration said yesterday, however, that if it ultimately decides to impose a tariff after consulting with the Honduran government later this year, it would cover only cotton socks, and not wool or man-made material.
"It’s a huge disappointment," said Jim Schollaert, a lobbyist for several small domestic sock-makers in Washington. "It shortchanges the domestic industry."
For now, it’s unclear exactly how long the tariff would stay in place, or how large it would be. The maximum rate would be 13.5 percent.
A memo published yesterday regarding the decision by the Commerce Department’s Committee for the Implementation of Textile Agreements, or CITA, caused some confusion.
Schollaert interpreted the technically-worded memo as saying that the tariff would last only through the end of the year. But the office of Rep. Robert Aderholt, R-Ala., whose district includes several domestic sock-makers, interpreted it differently.
The memo suggested that the tariff would stay in place for between one year and three years, said Hood Harris, Aderholt’s chief of staff.
"Bottom line is the congressman will be pushing for the maximum three-year tariff," he said.
Asked for clarification on the memo, Commerce Department officials declined to discuss it on the record.
"The substantial increases in imports of cotton socks from Honduras found during the investigation have led CITA to move forward with the safeguard process in accordance with the Agreement," Deputy Assistant Secretary of Commerce Matt Priest said in a prepared statement.
The move toward re-imposing a tariff that was in place before CAFTA was widely expected. In 2005, Aderholt cast a tiebreaking vote that led to CAFTA’s passage after securing a promise from the Bush administration to re-impose the tariff on Honduran socks if the domestic industry suffered.
Dennis Martin, the president of North Carolina Sock in Hickory, N.C., said that trade officials need to impose the tariff for as long as possible.
"If it’s only on for a year, the market will once again be flooded in the United States. The ones winning out here would be the foreign companies," he said.
Several larger sock companies — some based in the U.S., some overseas — that had set up operations in Honduras opposed the move. Putting a tariff on Honduran socks would only open the door to more imports of Asian imports, not help U.S. companies, they said.
(Sean Mussenden can be reached at smussenden@mediageneral.com or 202-680-9467).