The World Trade Organisation (WTO) has approved establishing a disputes panel to assess EU retaliatory duties on US knitwear exports. By Keith Nuthall.
The World Trade Organisation (WTO) Disputes Settlement Body (DSB) has approved establishing a disputes settlement panel ruling on whether retaliatory duties imposed by the European Union (EU), on US knitwear exports, imposed in response to America’s controversial steel and aluminium tariffs, break WTO rules. These retaliatory tariffs include 25% duties imposed by the EU on US-made knitted or crocheted T-shirts, singlets and other vests.
In a statement, the US government dismissed the EU justification for the retaliatory duties, that the US metal tariffs were disguised ‘safeguard duty’ protectionism rather than the formal American justification that it needed to protect its steel and aluminium sector for national security reasons.
The DSB is also to establish disputes settlement panels where China, the EU, Canada, Mexico, Norway, Russia, and Turkey will argue whether America’s original steel and aluminium duties also break WTO rules. If the EU wins its case regarding the original US tariffs, additional 50% duties on US-made knitted and crocheted women’s or girls’ cotton trousers and breeches, and knitted and crocheted cotton blankets and travelling rugs, will automatically come into force.
Other international regulatory news affecting the knitwear sector:
- The European Commission has released an EU regulation that will block the use of 34 chemicals in clothing and accessories when present in concentrations over certain set limits, because of concerns that they are carcinogenic, mutagenic or toxic to reproduction, as of 1 November 2020.
Chemicals included are chromium VI compounds, benz[a]anthracene, diisopentylphthalate and more.
Because of difficulties in sourcing alternatives to formaldehyde, a limit for this chemical (75 mg/kg) will come into force from 1 November 2023, with a 300 mg/kg limit imposed between 1 November 2020 and 1 November 2023. See: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1513&from=EN
- The European Union (EU) Council of Ministers has approved a revised list of duty-free quotas for goods, including knitwear and knitted items, whose production within the EU is insufficient to meet demand. The quotas cover layered plastic-laminated textile fabric including a layer of knitted or crocheted polyester textile fabric. This quota will remain in place until a mandatory review, due by 31 December 2021. Another quota covers reflective sheeting or tape of knitted fabric covered on one side with plastic material. This quota will be reviewed in December 2023.
See full list of quotas: http://data.consilium.europa.eu/doc/document/ST-15345-2018 INIT/en/pdf
- The US Fashion Industry Association (USFIA) has told a US Trade Representative public hearing on the negotiating objectives for a planned US-Japan Trade Agreement that such a deal should target Japan’s high import duties on fashion products by including a flexible and simplified rule of origin for bilateral apparel trade, harmonising and streamlining customs procedures, and imposing common product safety and labelling rules.
See: http://www.usfashionindustry.com/pdf_files/USFIA-Testimony-US-Japan-Trade-Agreement-121018.pdf
- A memorandum of understanding (MoU) was signed between the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh government’s directorate of technical education to work together in training young workers in knitting and sewing. Both organisations will run a new Skill and Training Enhancement Project (STEP) designed to boost productivity in the country’s readymade garment sector.
See: http://www.techedu.gov.bd/
- The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) has released a note stressing that it wants to diversify the country’s export markets beyond the US and Europe.
“The BKMEA is working tirelessly to introduce knitwear products to the yet untapped, but potential markets of the world, apart from the US and EU,” the note says.
- North African knitwear hub, Tunisia, will see manufacturing workers’ salaries rise in 2019, with the goal of boosting productivity. The Tunisian Textile and Garment Federation (FTTH) has agreed wage rises of 7% during 2019 and 2020, striking a deal with the country’s National Labour Union (UGTT).
- Panama has filed an appeal at the WTO against a compliance panel report that rejected a claim by Panama that it can levy US$210m worth of retaliatory tariffs against Colombia to compensate for clothing – including knitwear – inputs (and footwear) duties that the Colombians have imposed on Panamanian exports. Colombia has claimed the tariffs are needed to help it fight money laundering from Panama, which claims Colombia’s reasoning is bogus and breaks WTO rules. A WTO disputes panel has backed Panama’s original claim, but not the level of compensatory tariffs that the Panamanian government wants to impose.
