Request for Public Comments on Bilateral Consultations with the Government of Pakistan

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS

Request for Public Comments on Bilateral Consultations with the

Government of Pakistan

May 8, 1997.

AGENCY: Committee for the Implementation of Textile Agreements (CITA).

ACTION: Notice.

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FOR FURTHER INFORMATION CONTACT: Ross Arnold, International Trade

Specialist, Office of Textiles and Apparel, U.S. Department of

Commerce, (202) 482-4212. For information on categories for which

consultations have been requested, call (202) 482-3740.

SUPPLEMENTARY INFORMATION:

Authority: Executive Order 11651 of March 3, 1972, as amended;

section 204 of the Agricultural Act of 1956, as amended (7 U.S.C.

1854); Uruguay Round Agreements Act.

On April 23, 1997, under the terms of Article 6 of the Uruguay

Round Agreement on Textiles and Clothing (ATC) and the Uruguay Round

Agreements Act, the Government of the United States requested

consultations with the Government of Pakistan with respect to cotton

yarn in Category 301pt. (HTS numbers 5205.21.0000, 5205.22.0000,

5205.23.0000, 5205.24.0000, 5205.26.0000, 5205.27.0000, 5205.28.0000,

5205.41.0000, 5205.42.0000, 5205.43.0000, 5205.44.0000, 5205.46.0000,

5205.47.0000, 5205.48.0000), produced or manufactured in Pakistan.

The purpose of this notice is to advise the public that, if no

solution is agreed upon in consultations with the Government of

Pakistan, the Government of the United States reserves its right to

establish a twelve-month limit of not less than 2,319,944 kilograms for

the entry and withdrawal from warehouse for consumption of cotton

textile products in Category 301pt., produced or manufactured in

Pakistan.

A summary statement of serious damage, the actual threat of serious

damage or the exacerbation of serious damage concerning Category 301pt.

follows this notice.

Anyone wishing to comment or provide data or information regarding

the treatment of Category 301pt. or to comment on domestic production

or availability of products included in Category 301pt. is invited to

submit 10 copies of such comments or information to Troy H. Cribb,

Chairman, Committee for the Implementation of Textile Agreements, U.S.

Department of Commerce, Washington, DC 20230; ATTN: Helen L. LeGrande.

The comments received will be considered in the context of the

consultations with the Government of Pakistan.

Because the exact timing of the consultations is not yet certain,

comments should be submitted promptly. Comments or information

submitted in response to this notice will be available for public

inspection in the Office of Textiles and Apparel, room H3100, U.S.

Department of Commerce, 14th and Constitution Avenue, NW., Washington,

DC.

Further comments may be invited regarding particular comments or

information received from the public which the Committee for the

Implementation of Textile Agreements considers appropriate for further

consideration.

The solicitation of comments regarding any aspect of the

implementation of an agreement is not a waiver in any respect of the

exemption contained in 5 U.S.C.553(a)(1) relating to matters which

constitute ``a foreign affairs function of the United States.''

The United States remains committed to finding a solution

concerning

[[Page 26480]]

Category 301pt. Should such a solution be reached in consultations with

the Government of Pakistan, further notice will be published in the

Federal Register.

A description of the textile and apparel categories in terms of HTS

numbers is available in the CORRELATION: Textile and Apparel Categories

with the Harmonized Tariff Schedule of the United States (see Federal

Register notice 61 FR 66263, published on December 17, 1996).

Troy H. Cribb,

Chairman, Committee for the Implementation of Textile Agreements.

Summary of Statement in Support of Request for Consultations Under

Article 6 of the ATC--Pakistan

Cotton Yarn--Category 301pt.

April 1997

The USG has determined that the increase in imports of yarn for

sale, 85 percent or more by weight combed cotton ring spun, Category

301 Part, has caused serious damage, or actual threat thereof, to the

industry in the United States producing like and/or directly

competitive yarn for sale.

Imports of the subject yarn from all sources increased by 64

percent from 1994 to 1996, a net increase of 6.2 million kilograms.

During this time, domestic shipments dropped substantially, falling by

5.1 million kilograms. Orders lost to imported yarns also resulted in a

1.5 percent reduction in production during this period, and caused

inventories to increase sharply, by 50 percent. Increasing low-valued

imports forced domestic margins to fall. Mills scrambled to cut prices

in the last half of 1995 and 1996 to keep the remaining customers they

had not already lost to imports. Despite price cuts, mills continued to

lose orders, with unfilled orders dropping 30 percent from 1994 to

1996.

Capacity utilization declined as production and shipments fell,

causing severe margin pressure as fixed costs had to be allocated over

fewer sales, which cut gross margins. Seventy three percent of the

companies reported declining profitability from 1994 to 1996 on the

yarn in question. Seven mills fell victim to the margin squeeze and

shut down, and production worker employment in the defined industry

lost a total of 767 jobs between 1994 and 1996.

The USG concluded that the increase in imports between 1994 and

1996 was the direct cause of serious damage to the industry as

reflected in the industry's declining shipments, the substantial

increase in inventories, and the significant fall in unfilled orders

and employment.

The USG also determined that serious damage to this industry was

directly attributable to the sharp and substantial increase in imports

of the subject yarn from Pakistan. Imports from Pakistan had increased

significantly, both absolutely and relative to domestic production and

world imports, thereby increasing Pakistan's share of U.S. imports and

the U.S. market. Pakistan's low-valued imports adversely affected U.S.

domestic prices.

There were no imports of the subject yarn from Pakistan before

1995. U.S. imports of the subject yarn from Pakistan began in May 1995

and reached 471,758 kilograms by the end of 1995. Imports from Pakistan

of the subject yarn surged to 2,319,944 kilograms in year-ending

January 1997, an increase of 392 percent above the total level imported

during 1995.

The USG further determined that the significant increase in imports

of the subject yarn from all sources constituted the actual threat of

serious damage or the exacerbation of serious damage to the defined

domestic industry producing like and/or directly competitive yarn, and

that, based on the sharp and substantial increase in imports of the

subject yarn from Pakistan, such threat was attributable to Pakistan.

[FR Doc. 97-12676 Filed 5-13-97; 8:45 am]

BILLING CODE 3510-DR-F