ANDEAN NATIONS TO JOIN US SPECIAL-ACCESS TEXTILE PROGRAM

ANDEAN NATIONS TO JOIN US SPECIAL-ACCESS TEXTILE PROGRAM

Textile and apparel exporters from four South American countries will have greater access to the all-important U.S. market from Oct. 1, the date they are scheduled to join a U.S. program that their competitors in the Caribbean and Central America have been exploiting for years.

The so-called special-access textile program allows exporting countries to negotiate more generous import quotas with the United States for goods sewn with U.S. fabric.Already in place for 24 nations from the Caribbean and Central America, the special-access program will be extended next month to the four Andean nations of Colombia, Peru, Ecuador and Bolivia.

The move builds on the U.S. government's 1991 decision to adopt the Andean Trade Preference Act, which gives preferential trade treatment to a slew of other products from the four Latin nations. At that time, the Bush administration, in an aggressive campaign to curb drug imports, viewed the preference act as a way to help the region break away from its dependence on coca, the lucrative crop used in cocaine production.

"The U.S. government has been contemplating this for some time. I'm not surprised at the decision," said Bennett Marsh, deputy executive director for trade policy at the Caribbean/Latin American Action in Washington, of the impending extension of the preference act to textiles and apparel. The group promotes business development in the region.

All together, the four nations exported more than $500 million in textiles to the United States last year. Right now, Bolivia, Peru and Ecuador are shipping small volumes of blouses, pants, yarns and other products to U.S. buyers and are under no quotas - or specific limits - on the volume of imports.

But the United States recently negotiated special-access limits with Colombia for underwear and women's and girl's wool suits. Those limits were reached during two separate negotiating processes over the summer.

Colombia was one of eight nations against which the United States issued a controversial set of calls - requests for trade restraints - for imports of underwear this spring.

A special-access limit, designed to encourage joint production between U.S. and foreign companies as well as the use of U.S. fabrics, gives a foreign country more generous access to U.S. markets. For example, the settlement on underwear allows Colombia to ship 2.25 million dozen underwear between April 1 and Dec. 31 of this year. But during the same period, it can export 22.5 million dozen underwear if the manufacturer uses U.S. fabric cut in the United States.

Don Foote, an official in Commerce's Office of Textiles and Apparel, said the extension of the special-access program was a natural enhancement of the Andean Trade Preference Act, especially after the agreement with Colombia was reached. Another Commerce official said U.S. and Andean nation negotiators first discussed the textile program back in 1990.

Yet several analysts involved in textile trade criticized the U.S. government move as a way to push exporting countries into using U.S. fabric.

"We are cynical," said Laura Baughman, an economist for a Washington trade consulting firm, The Trade Partnership. "The domestic industry doesn't give up. They want to encourage the use of domestic fabric wherever they can."

Ms. Baughman said the new program could create a problem for exporting countries that are using a lot of fabric from non-U.S. suppliers.

Carlos Moore, executive vice president of the American Textile Manufacturers Institute in Washington, acknowledged that the domestic industry wants to encourage Latin nations' use of U.S. fabric.

"Talks to extend the program to the Andean countries was initiated several years ago by the Bush administration, not in response to the Colombian quotas," Mr. Moore said.

The program is set to begin Oct. 1 once the U.S. Customs Service is ready to handle the added paperwork accompanying shipments coming in under the special program, said Mr. Foote, who is director of international agreements in Commerce's textile office.

Maria Arbelaez, a commercial counselor for the Colombian Embassy in Washington, said the new limits will be very helpful for the country's textile sector. Between 60 percent to 80 percent of the country's textile shipments to the United States already involve U.S. fabric, she added.

"We'll be able to grow," Ms. Arbelaez added.

Even though most of Bolivia's textile production is now for internal consumption, the special-access limit will help the Andean nation develop its export industry, said Miguel Papadopulos, commercial counselor for the Bolivian Embassy in Washington.

"It's very important that we have something like this," Mr. Papadopulos said. "By giving us preferential access, it helps us foster alternative industries (to coca)."