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SGMA braces for elimination of old quota system in January ’05
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Posted on Dec 08 2004
“Talk about a situation out of our control. It’s like a typhoon, all we can do is wait until it’s over”, said Saipan Garment Manufacturers Association executive director Richard A. Pierce, referring to activity surrounding domestic and foreign country attempts to restrict China’s entry of apparel into the United States market after Jan. 1, 2005.
As the decades-old quota system comes to its end in a little over three weeks, petitions allowed by the U.S. Committee for Implementation of Textile Policy have cut short China’s anticipated share of the U.S. domestic market in two categories of production.
Seven more petitions have been filed before CITA, five of which are for apparel production currently manufactured in Saipan. These petitions would limit China to a 7.5 per cent growth for 2005 over 2004 totals. The petitions can be re-filed annually up until 2008.
Saipan factories had welcomed these petitions as they would keep production otherwise bound for China in Saipan sewing lines and containers destined for the mainland.
Mainland buyers and retailers that are doing business in Saipan are now suing for injunctive relief from five U.S. government offices to stop further review of China safeguard petitions on the threat of market disruption. The government offices have 10 days to respond to the complaint.
“Our own buyers are suing to halt CITA from accepting threat-based petitions or those involving products under quota without publishing new rules, which would surely direct production into China that would have had a better chance of landing orders in Saipan should the petitions prevail before CITA. It’s a real dilemma,” said Pierce.
CNMI Customs Service released user fee collections figures for the month of November 2004 of $2.52 million. October and November total collections are nearly identical over the past three years.
“Collections during the last three months of the calendar year are generally higher as foreign countries exhaust their valuable purchased quota for shipping to the mainland market. This is the last year of foreign quota allotments, and this is the last year of Saipan’s inheritance from that old system,” Pierce concluded.
