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IMPORTING WOOL TO U.S.
Term Paper ID:26699
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Essay Subject:
Examines quotas established by Multi-Fiber Arrangement, trade status, competition, rold of govt., textile visas, regulations, labeling, example (Woolmark Co.).... More...
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10 Pages / 2250 Words
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Paper Abstract:
Examines quotas established by Multi-Fiber Arrangement, trade status, competition, rold of govt., textile visas, regulations, labeling, example (Woolmark Co.).
Paper Introduction:
IMPORTING WOOL TO THE UNITED STATES FROM AUSTRALIA
Introduction
The process of importing wool into the United States from Australia is reviewed. Essentially, the process of importing wool into the United States will be the same regardless of the source country since the Multi-Fiber Arrangement has lapsed. In addition to reviewing the process of importing wool into the United States, the market outlook for wool consumption in this country is reviewed.
An original intent of this research was to consider the process of importing wool into the United States from Australia within the context of a specific company -- the Woolmark Company. The Woolmark Company, however, is an intellectual property company whose objectives are to protect the “Woolmark” tradema
Text of the Paper:
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The Language of Trade.Washington: United States Government Printing Office. Imports soar 28% in April: Chinadominates. Federal Trade Commission. Quotas for the importof wool into the United States are based primarily on the provisions of theMFA (Martin, 1994). Other Regulations Affecting the Import of Wool into the United States With the lapse of the Multi-Fiber Arrangement, quotas on wool importswill no longer be a part of the process for entry into the United States.Regulations will continue to exist, however, with respect to the labelingof wool and wool products that enter the United States. Ornamentationmay not exceed five-percent of the total fiber weight. T. A word trademark, used as ahouse mark and registered in the United States Patent Office, may be onlabels in lieu of the name otherwise required, if the owner of suchtrademark furnishes a copy of the registration to the Federal TradeCommission prior to its use. The countries most affected by MFA quotas negotiated or imposed bythe United States tend to be those with lower labor costs than theprevailing wages in the United States, such as the People's Republic ofChina (PRC). Again,none of these efforts have adversely affected imports of wool fromAustralia. China BusinessReview, 21(3), 9-13. An original intent of this research was to consider the process ofimporting wool into the United States from Australia within the context ofa specific company -- the Woolmark Company. A textile visa isan endorsement in the form of a stamp on an invoice or export controllicense which is executed by a foreign government. The PRC, as anexample, is challenged on its efforts to retain MFN status because of thatcountry's suppression of the so-called pro-democracy demonstrations in 1989(Bangsberg, 1994). It is also the responsibility of importersto certify that apparel and textile imports originate in the countriesstated on the import certificates, and that such imports are not mislabeledin an attempt to permit imports in excess of established quotas forspecific countries. Consumption ofwool generally is at the highest level of the decade of the 199 s, and theconsumption of wool in women's clothing is at the highest level in history. There are many within the American textilesindustry, within government, and within the investment communities,however, who believe that the internal initiative cannot succeed in thelong-run without some assistance from government (Ostroff, 1997). Daily News Record, 27(74), 2. The MFA was first negotiated in the 195 s, wasrenegotiated in 1986 and 1992. All textile fiber products imported into the United States, includingwool, must be stamped, tagged, or labeled with specific informationrequired by the Textile Fiber Products Identification Act. Fifth, certain wool articlesmanufactured or produced in certain countries may be subject to quotasunder United States Department of Commerce Multi-Fiber Arrangements untilthe MFA lapses on 1 July 2 5. During the Cold War period, MFN statuswas largely determined by a country's political policies toward the SovietUnion. The United States Customs Service also enforces compliancewith labeling and invoice requirements of the WPLA and the Textile FiberProducts identification Act (TFPIA), as well as flammability standardsunder the Federal Fire Agency (FFA). (1998 December 31). It is theresponsibility of importing firms to certify that apparel and textileimports do not originate in countries from which such imports into theUnited States are prohibited. The Woolmark Company was created on 1 July 1998, when theInternational Wool Secretariat announced that it was changing its name, andthat of its United States-based subsidiary, the Wool Bureau, to TheWoolmark Company. The Federal Trade Commission has a registered identification numbersystem for all businesses in the United States that are engaged in themanufacture, importing, distribution, or sale of wool products. Thesymbol has been found to be readily identifiable to 75 percent of consumersin the world's nine major markets. The percentage of the total fiber weight of the wool product,exclusive of ornamentation, must be included on the label. The United States government generally is deeply committed to theconcept of international trade (Bangsberg, 1994). The visa system is considered to be the most effective way to preventillegal transhipments and quota fraud. The name of the manufacturer or the name or registeredidentification number issued by the Federal Trade Commission must beincluded in the marking on the wool product. (1998). Any product containing woolen fiber imported into theUnited States, with the exception of carpet, rugs, mats, upholsteries, andarticles made more than 2 years prior to importation, must be marked withadditional information as required by the Wool Products Labeling Act of1939. Wall Street Journal,A15. (1997 June 2 ). Washington: United States Customs Service.http://www.customs.ustres.gov/quotas/1998/visa_rpt.htm United States Information Agency. The Consumer Products SafetyCommission (CPSC) monitors imports and inspects textile shipments forcompliance with FFA standards. Australia has never been denied MFN status. The informationthat must be provided is as follows (United States Customs Service, 1997): 1. Washington: Federal Trade Commission.http://www.ftc.gov.bcp/rn/rn/htm Islam, S. (1994a May-June). China penalizes textile firms. Depending on the nature of a wool product presented for import intothe United States, as many as five different types of special entrydocuments may be required. Further, from the 137 million pounds of wool consumed in theUnited States in 199 , the forecast is that more than 2 million pounds ofwool will be consumed in the United States in 1999. MFN status isa manifestation of many factors. The name of the manufacturer or person importing the wool productinto the United States must be included on the label. (1995 March-April). The Reagan Administrationclaimed that the protection provided by the MFA is all that is justifiedfor the industry. Thus, as the Woolmark Company is not an importer, anexporter, or a producer of wool products, the focus of this research is notspecific to the Woolmark Company. In the contemporary environment, MFN status is affected primarilyby human rights concerns and by economic orientation. TheUnited States Customs Services enforces CITA textile and textile productentry quotas. The principal focusof the organization remains as the maximization of the profitability ofAustralian woolgrowers by building and sustaining global demand for woolproducts along the entire wool pipeline to the final consumer. Textile statusreport. Under the framework of the MFA, the United States has eithernegotiated or imposed quotas on the import of wool apparel and cloth intothe United States (Martin, 1994). The ReaganAdministration, however, attributed the industry's declining employmentsolely to productivity improvements, and not to the competitive pressuresof foreign producers (Jacobs, 1995). 2. The Reagan Administration claimed further that the basisof public and congressional interest in the problems of the apparel andtextile industry was the declining employment in the industry. Market Outlook Demand for wool in increasing in the United States. Fibers presentin amounts of five percent or less must be designated as "other fibers." 2. United States Customs Service. The United States is thelargest trading country in the world. Textile trouble. American apparel and textile import quotas are oftenrescinded or reduced for countries accorded the MFN status. The US government considers itessential to increase exports, as opposed to reducing imports, as a meansof balancing the international trade account. The Woolmark symbol is the international textile symbol thatidentifies 1 percent pure new wool apparel at the retail level. 3. Wool imports into the United States also are affected by thedesignation of a foreign country by the United States as a most favorednation (MFN). The generic names and percentages by weight of the constituentfibers present in the textile fiber product, exclusive of permissiveornamentation, in amounts of more than five-percent, in order ofpredominance by weight, must be included in the labeling. Mending the textile rift. Australia has not been affected by damaging quotas on wool. Virtuallyall major textile importing countries and exporting countries aresignatories to the MFA. Essentially, the process of importing wool into the UnitedStates will be the same regardless of the source country since the Multi-Fiber Arrangement has lapsed. (1994 February 3). References Bangsberg, P. Importation of wool and wool products is subject to complex textileimport regulations. At the end of the 1 -year transition period ruleson textile trade will be fully integrated into those of the World TradeOrganization (WTO). The Americas branch of the organization is situated in New YorkCity. The additional labeling information required is as follows (UnitedStates Customs Service, 1997): 1. China escalates modernization oftextile and garment sector. All wool shipments from Australia to the United Statesrequire textile visas. The last renegotiation of the MFA, however, provided for itsdemise. China Business Review, 22(2), 35-38. Registered identificationnumber database. Ostroff, J. Under the Uruguay Round agreement of the GATT, countries agreed toeliminate the MFA quotas in phases beginning 1 July 1995, with all quotasending by 1 July 2 5. The objective of the MFA is toreconcile the interests of textiles-exporting and textiles-importingcountries by permitting an orderly expansion of trade while avoiding marketdisruption. Importing Wool to the United States from Australia Introduction The process of importing wool into the United States from Australia isreviewed. The Woolmark Company The Woolmark Company is an intellectual property organization. The MFA has been described as an internationally agreed derogationfrom GATT rules that allows an importing signatory country to applyquantitative restrictions on textile imports when it considers themnecessary to prevent market disruption, even when such restrictions wouldotherwise be contrary to GATT rules. With respect to apparel andtextiles, the Reagan Administration was adamant in its opposition to anyadditional legislative relief for the industry. The MFA provides for the negotiation ofapparel and textile quotas, and these negotiations are conducted under theauspices of the General Agreement on Tariffs and Trade (GATT). (1994 April 12). Textiles and apparel trade under theWTO. (1999 March 17). The MFA provides the general framework for textiletrade restraints and allows any importer country to negotiate bilateralquota agreements with exporter countries. When importer and exportercountries cannot agree, the MFA permits importer countries to unilaterallyimpose textile import quotas or other textile import restrictions (Martin1994). Third, for all wool products subject to the WPLA and all rawwool subject to duties at entry into the United States at a rate per cleankilogram, special information is required on the entry invoices(certificates of origin). A. If a visa has an incorrect category,quantity or other incorrect or missing data, or a shipment arrives withouta visa, the entry is rejected and the merchandise is not released until theimporter reports the discrepancy to the foreign government and receives anew visa or visa waiver from the foreign government (United States CustomsService, 1998). The maximum percent of the total weight of the wool product and ofany nonfibrous loading, filling, or adulterating matter must be included onthe label. TheWoolmark symbol is the single most recognized global textile symbol. As the International Wool Secretariat, and nowas the Woolmark Company, the organization has been functioning since 1937.The organization's home office is situated in Melbourne, Victoria,Australia. The Woolmark Company says that its new name is a major part of astrategy designed to strengthen the organization's commercial focus for thedirect benefit of 7 , Australian woolgrowers, which together account for7 percent of the traded global apparel wool supply. All countries that are signatories to the UruguayRound accord will be subject to the new textile agreement whether or notthey were signatories to the MFA (United States Information Agency, 1998). The "Woolmark" symbol is one of the most recognized trademarksin the world. The Americantextiles industry, without significant success, has sought legislativerelief beyond the MFA from the foreign competition on several occasions.The American textiles industry has also attempted to address its problemsthrough internal initiatives. In addition to reviewing the process ofimporting wool into the United States, the market outlook for woolconsumption in this country is reviewed. Martin, D. Again, an importermay use a registered identification number issued by the Federal TradeCommission instead of the importer's name. From 1992 to 1996, wool consumption in the United States increased 42percent. When apparel and textile import quotas are established by the UnitedStates government, direct penalties may be applied to the importers in theUnited States ("China Penalizes Textile Firms," 1994). The purpose of thetextile visa is used to control the exportation of textiles and textileproducts to the United States and to prohibit the unauthorized entry of themerchandise into the country (United States Customs Service, 1998). Multi-Fiber Arrangement The Multi-Fiber Arrangement (MFA) is, in effect, unilaterally imposedby the major textile importing countries, of which the United States isone, on textile exporting countries (Martin, 1994). Such products require export certificatesor visas issued by the appropriate country of origin. The Americas branch exercises responsibility for promotion of theuse and marketing of wool to spinners, weavers, manufacturers, retailers,and consumers in throughout the Western Hemisphere. The visa system also ensures thatboth the foreign government and the United States count merchandise andcharge quotas in the same way so that over-shipments, incorrect quotacharges, and embargoes can be avoided. The Woolmark Company, however,is an intellectual property company whose objectives are to protect the"Woolmark" trademark on a global basis and to promote the use of woolproducts. At present, the United States requires a textile visa be obtained forthe import of wool and other textiles into the country. (1994 August 25). The Federal Trade Commission administers the WoolProducts Labeling Act (WPLA) requirements. In the 199 s, competition from producers in the developing countriesis more intense than it was two decades ago (Islam, 1994). Suchbusiness are not required to obtained registered numbers; however, if theobtain a registered number, that number may be used in place of thebusiness name on the label or tag that United States law requires on woolproducts (Federal Trade Commission, 1999). Fourth, for shipments of wool subject to dutiesat the time of entry into the United States at a rate per clean kilogram,an importer must also file one extra copy of the standard entry summary inaddition to the copies otherwise required. Far Eastern EconomicReview, 157(3), 48, 5 . 3. The import quotas negotiated orunilaterally imposed by the United States under the MFA are designed toprotect the apparel manufacturing and textile industries in the UnitedStates. Additional labeling requirements apply to wool imported into theUnited States. Theorganization conducts research and innovative development into the uses ofwool, and the company promoted the use and marketing of wool and woolproducts around the world. Jacobs, B. The Department of CommerceCommittee for Implementation of Textile Agreements (CITA) regulates certaintextile imports under Section 2 4 of the Agricultural Adjustment Act. First, for all imported textile fibers, yarns,and fabrics covered by the Agricultural Adjustment Act (AAA), includingwool, a United States Customs Textile Entry Declaration must be filed.Second, with each wool shipment's entry summary, an importer must fileUnited States Customs Form 6451, Notice of Percentage of Clean Yield andGrade of Wool or Hair, in duplicate, showing the name and address of theimporter. The name of the country where the wool was processed ormanufactured must be included in the labeling. Rather, the review of the process ofimporting wool into the United States applies to any company importing woolinto the country. Journal of Commerce and Commercial, 3A.
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