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

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS

Request for Public Comments on Bilateral Consultations with the

Government of Thailand

September 15, 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 August 28, 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 Thailand with respect to yarn, 85%

or more by weight artificial staple fiber, Category 603, produced or

manufactured in Thailand.

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

solution is agreed upon in consultations with the Government of

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

establish a twelve-month limit of not less than 1,664,653 kilograms for

the entry and withdrawal from warehouse for consumption of yarn of 85%

or more artificial staple fiber in Category 603, produced or

manufactured in Thailand.

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

damage or the exacerbation of serious damage concerning Category 603

follows this notice.

Anyone wishing to comment or provide data or information regarding

the treatment of Category 603 or to comment on domestic production or

availability of products included in Category 603 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 Thailand.

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 Category 603. Should such a solution be reached in

consultations with the Government of Thailand, 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--Thailand

Category 603--Yarn, 85 Percent or more by Weight Artificial Staple

Fiber

August 1997

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

sale, 85 percent or more by weight artificial staple fiber, Category

603, 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 15.9

percent in 1996 over 1995, a net increase of nearly 2.0 million

kilograms. Domestic orders fell by 19.5 percent and domestic production

declined 7.7 percent in 1996 as inventories increased by 17.4 percent.

Increasing low-valued imports forced domestic spinners to cut their

prices and margins to remain price competitive. Mills cut prices in

1996 and continued to lose orders to imports with unfilled orders

dropping 19.5 percent in 1996 below the 1995 level. During the first

quarter of 1997 domestic industry orders fell 26.3 percent, as

inventories increased 22.3 percent and production fell 20 percent from

the same period last year.

Capacity utilization declined as production fell, causing severe

margin pressure as fixed costs had to be allocated over fewer sales,

which cut gross margins. Compounded with the pressure to lower prices,

mills' profitability evaporated. Seventy-eight percent of the companies

reported declining profitability in 1996 on the product in question.

Two mills fell victim to the margin squeeze and shut down. Production

worker employment in the defined industry lost a total of 403 jobs in

1996. More jobs were lost in 1997, as another firm exited the business,

resulting in a net loss of 619 jobs from 1995 to the first quarter of

1997.

The USG concluded that the increase in imports from 1995 to 1996 is

the direct cause of serious damage to the industry as reflected in the

industry's declining production, the substantial increase in

inventories, the industry's deteriorating financial performance, and

the significant fall in unfilled orders, man-hours, and employment.

[[Page 49208]]

The USG has also determined that serious damage to this industry is

directly attributable to a sharp and substantial increase in imports of

the subject yarn from Thailand. Imports from Thailand have increased

significantly, both absolutely and relative to domestic production and

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

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

domestic prices.U.S. imports of the subject yarn from Thailand rose to

1,279,683 kilograms in 1996, an increase of 22.3 percent above the

1,046,174 kilograms imported during 1995. In the first quarter of 1997,

imports from Thailand surged to 610,843 kilograms, 85.8 percent above

the 328,698 kilograms imported in the first quarter of 1996. Imports

from Thailand for the year ending June 1997 reached 1,557,205

kilograms, 39.7 percent above the 1,114,926 kilograms imported during

the same period a year earlier.

The USG further determined that increases in imports of the subject

yarn from all sources constitute the actual threat of serious damage or

the exacerbation of serious damage to the defined domestic industry

producing a like and/or directly competitive product, and that, based

on sharp and substantial increases in imports of the subject product

from Thailand, such threat was attributable to Thailand.

[FR Doc. 97-24868 Filed 9-18-97; 8:45 am]

BILLING CODE 3510-DR-F