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

COMMITTEE FOR THE IMPLEMENTATION OF TEXTILE AGREEMENTS

Request for Public Comments on Bilateral Textile Consultations

with the Government of Pakistan

December 24, 1998.

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: Section 204 of the Agricultural Act of 1956, as

amended (7 U.S.C. 1854);

[[Page 72289]]

Executive Order 11651 of March 3, 1972, as amended.

On December 24, 1998, under Article 6 of the Uruguay Round

Agreement on Textiles and Clothing (ATC), the Government of the United

States requested consultations with the Government of Pakistan with

respect to combed cotton yarn in Category 301, 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 5,262,665 kilograms for

the entry and withdrawal from warehouse for consumption of combed

cotton yarn in Category 301, produced or manufactured in Pakistan.

A summary statement of serious damage, actual threat of serious

damage or the exacerbation of serious damage concerning Category 301

follows this notice.

Anyone wishing to comment or provide data or information regarding

Category 301 or to comment on domestic production or availability of

products included in this category 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: Donald R. Foote. 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 commentary 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 this category. 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 62 FR 66057, published on December 17, 1997).

Information regarding the 1999 CORRELATION will be published in the

Federal Register at a later date.

D. Michael Hutchinson,

Acting Chairman, Committee for the Implementation of Textile

Agreements.

0Summary of the Statement in Support of Request for Consultations Under

Article 6 of the ATC

Combed Cotton Yarn--Category 301

December 1998

Import Situation and Conclusion

The USG has determined that the increase in imports of combed

cotton yarn for sale, Category 301, 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 91.3

percent in January-August 1998 over January-August 1997, an increase of

9,828,000 kilograms. During this same period, domestic shipments

dropped substantially, falling 14,174,000 kilograms, 14.2 percent below

the January-August 1997 level. Domestic unfilled orders fell by 15.8

percent and domestic production declined 10.2 percent from January-

August 1997 to January-August 1998 as inventories increased 145.9

percent.

Increasing low-valued imports put pressure on domestic prices and

margins. Capacity utilization declined as shipments and 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. Operating margins

shrank as companies engaged in the production and sale of the subject

merchandise, resulting in declining profitability in January-August

1998 compared to the same period in 1997 on the product in question.

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

worker employment in the defined industry lost 340 jobs during January-

August 1998.

The USG concluded that the increase in imports in 1998 has caused

serious damage to the industry as reflected in the industry's declining

production and shipments, the substantial increase in inventories, the

industry's deteriorating financial performance, and the significant

fall in unfilled orders and employment.

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 Pakistan. Imports from Pakistan have 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.

U.S. imports of the subject yarn from Pakistan increased to

3,612,652 kilograms in January-August 1998, 283.2 percent above the

942,756 imported during January-August 1997. For the year-ending

October 1998, imports from Pakistan surged to 4,908,094 kilograms,

164.3 percent above the 1,857,294 kilograms imported for the year-

ending October 1997.

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 Pakistan, such threat is attributable to Pakistan.

[FR Doc. 98-34780 Filed 12-29-98; 12:19 pm]

BILLING CODE 3510-DR-F