US imposes tariffs on Honduran socks
WASHINGTON (AP) - April 25, 2008 The administration said the 5 percent tariff would take effect
on July 1 and would last until the end of the year, providing
domestic manufacturers time to adjust to a flood of sock imports
from Honduras that has occurred after the Central American Free
Trade Agreement went into effect.
Honduras is the second largest foreign supplier of cotton socks
to the United States after Pakistan and ahead of China.
Matt Priest, Commerce deputy assistant secretary of textiles and
apparel, said it marked the first time the United States had ever
put textile tariffs back in place after they had been lifted by a
free trade agreement. However, the action fell short of the 13.5
percent tariffs lasting for three years that the U.S. industry had
requested.
The administration's decision to temporarily boost tariffs on
Honduran socks comes as President Bush is trying to win
congressional approval for three pending free trade agreements with
Colombia, Panama and South Korea during his final year in office.
He recently submitted the agreement with Colombia to Congress
for a vote under fast-track procedures that would have required
action within 90 legislative days.
However, House Speaker Nancy Pelosi led a successful effort to
stop the clock on the process. She argued that Congress should not
take up the Colombia free trade agreement until it first addresses
the economic problems of U.S. families.
With fears about job security rising in the wake of an anemic
economy, Bush used a joint appearance this week with the leaders of
Mexico and Canada to argue that the North American Free Trade
Agreement had fostered prosperity in all three countries and to
urge Congress to pass the three pending deals.
Congress approved the Central American Free Trade Agreement
covering Honduras and five other nations after a hard-fought battle
in 2005. The deal with Honduras went into effect in April 2006.
Imports of cotton socks from Honduras rose by 99 percent from
January through November of last year compared to the same period
in 2006.
Before CAFTA removed the tariffs, the border tax on Honduran
socks had been 4.4 percent. Priest estimated that the 5 percent
tariff would bring in between $3 million and $3.5 million in taxes
over the six months it is in effect.
He said that the decision to have the tariff in place only until
Dec. 31 reflected the fact that after that date a number of
temporary quotas on Chinese clothing imports including cotton socks
would be lifted. He said that to keep Honduras from being at a
competitive disadvantage with China, the decision had been made to
lift the duty on socks from Honduras at the same time given that
the much of the material included in socks from Honduras originates
in the United States.
"As our hemisphere's textile and apparel industries become
increasingly integrated," he said, "we need to stick together to
face growing competition from Asia."