National Council of Textile Organizations

Textile Enforcement and Security Act

National Council of Textile OrganizationsThe U.S. textile industry depends on strong customs enforcement for its livelihood. The industry is the third largest exporter of textile products in the world with over $22 billion in exports in 2013.  A majority of the industry’s production is exported. Three quarters of the industry’s exports go to trade preference countries, notably CAFTA, NAFTA and the ANDEAN regions. Due to the high-risk nature and the prevalence of fraud, CBP designated the textile industry as a Priority Trade Issue — yet the industry continues to witness serious fraud. For example, the U.S. government has reported that nearly twice as much “U.S.” combed cotton yarn was exported from the United States to the CAFTA region than was actually produced. Additionally, there have been a number of “phony companies” advertising the sale of U.S. yarns and fabric for use in the DR-CFTA region via the internet, yet Customs and Border Patrol(CBP) has been unable to effectively curtail the illegal activities of these “companies.” Finally, recent information from Mexico shows that up to a third of denim jeans which claim NAFTA origin may be made of Chinese fabric.

ISSUE

Since the DR-CAFTA agreement went into full force and effect, the U.S. textile industry has noticed a sharp increase in illegal trafficking of textile and apparel products in the region.  For example, the U.S. government has reported that nearly twice as much “U.S.” combed cotton yarn was exported from the United States to the CAFTA region than was actually produced.  Additionally, there have been a number of “phony companies” advertising the sale of U.S. yarns and fabric for use in the DR-CFTA region via the internet, yet Customs and Border Patrol(CBP) has been unable to effectively curtail the illegal activities of these ‘companies’.  Finally, recent information from Mexico shows that up to a third of denim jeans which claim NAFTA origin may be made of Chinese fabric.

BACKGROUND

The U.S. textile industry depends on strong customs enforcement for its livelihood.  The industry is the third largest exporter of textile products in the world with over $22 billion in exports in 2013.  A majority of the industry’s production is exported.  Three quarters of the industry’s exports go to trade preference countries, notably CAFTA, NAFTA and the ANDEAN regions.  Due to the high-risk nature and the prevalence of fraud, CBP designated the textile industry as a Priority Trade Issue — yet the industry continues to witness serious fraud.

CBP collects over $30 billion in revenue annually, making it the second largest revenue generator for the U.S. government.  Approximately 42% of all duties collected by CBP come from imports of textiles and apparel.  Textile and apparel have the highest fraud rankings of any industrial product and by failing to ensure proper enforcement of our agreements and trade obligations, the U.S. government is losing an important revenue source and more importantly, damaging the ability of U.S. manufacturing to compete in the global market.

NCTO believes that Customs textile enforcement could be considerably enhanced by addressing some of the issues impacting the industry through the Customs reauthorization bill which is expected to be considered during the 113th Congress.  NCTO believes that this can be done in a way that increases enforcement as well as trade facilitation. This is accomplished through improved targeting, increased resources, and enhanced authority.  This new approach will reduce the need for Customs to conduct broad investigations that can hamper legitimate producers while targeting high risk imports.

LEGISLATIVE ACTIVITY

In order to address the lack of effective customs enforcement, NCTO worked with U.S. Senator Kay Hagan (D-NC) and Congressman Tom Graves (R-GA) to introduce the Textile Enforcement and Security Act (TESA), which aims to increase the resources of the Textile and Apparel Office at CBP, improve targeting, and give the office additional authorities.

TESA 2013 Bill Summary – click the below links

https://beta.congress.gov/bill/113th-congress/senate-bill/1412 – U.S. Senate

https://beta.congress.gov/bill/113th-congress/house-bill/3558 – U.S. House of Representatives

NCTO POSITION

NCTO strongly supports the Textile Enforcement and Security Act of 2013, which provides the Department of Homeland Security and Department of Justice the necessary resources, authority, and direction to properly enforce U.S. textile and apparel trade obligations.  This legislation addresses the long standing concerns regarding lack of oversight and enforcement on textiles and apparel trade facilitated by CBP.

Source: U.S. National Council of Textile Organizations Web Site