US SEEKS TO CLARIFY ISSUE OF E. EUROPE APPAREL QUOTAS

US SEEKS TO CLARIFY ISSUE OF E. EUROPE APPAREL QUOTAS

U.S. officials say they will extend the comment period on a proposal to benefit EasternEuropean apparel makers amid concerns that the break could affect trade initiatives for the Caribbean and other nations in this hemisphere.

Some officials are worried that details of the plan for garments cut and sewn in Eastern Europe from U.S. fabric may have been misunderstood in Caribbean and Latin American countries where the idea has met with an initial enthusiastic response.If enacted for Eastern Europe, a proposed break on quota preference would be extended equally to countries that now benefit from the Caribbean Basin and Andean Initiatives, official sources said. Those countries now assemble garments from U.S. fabric, enjoying both quota and duty advantages which limit tariffs to the value-added on reimportation to the United States.

A key difference in the new proposal by the U.S. Trade Representative is that garments could be cut and sewn abroad, not merely assembled. But they would not necessarily enjoy the same duty relief granted under CBI, officials said. Special tariff treatment for items other than those that are just assembled would require an act of Congress.

Caribbean trade expert Paul E. Linet, an attorney based in Acton, Mass., said a law change on tariffs could take years, causing some countries to reconsider their initial support because of concerns over competition from Eastern Europe.

Mr. Linet said some apparel interests in this hemisphere already fear that ''most of the investment opportunities are going to be soaked up by other countries," particularly in coming years when expiration of the Multi-Fibre Arrangement, which governs most of the world's textile and apparel trade, and bilateral agreements may open new opportunities in the Far East.

Auggie D. Tantillo, chairman of the U.S. interagency Committee for the Implementation of Textile Agreements, said that although he has not reviewed written comments on the proposal published in the Federal Register on Jan. 27, he has not heard any such fears voiced about the plan so far. But Mr. Tantillo said he wants the proposal to be fully understood and will move to extend the comment period until the end of March.

First, the new system would complement, but not replace, the "807a" program, which offers both quota and duty breaks for assembly operations, Mr. Tantillo said. Secondly, there is no guarantee that duty breaks will be part of the new plan because of the needed change to existing 807 law.

"We're not opposed to reducing the duty but we're not authorized to do so," said Mr. Tantillo, stressing that the proposal is still "in the formative stage."

Another official familiar with the issue, who asked not to be identified, said there are concerns that "the more countries you extend a benefit to, the more you're eroding the margin of preference for others." He also suggested that some U.S. interests, including companies in nearby Florida, "might not like this," because of the potential to shift cutting operations overseas.

Others strongly back the U.S. Trade Representative proposal, requested by Poland and mirrored in the European Community, saying it could lead to regional specialization without conflict.

"It's a great move. We applaud it and support it," said Eugene J. Milosh, president of the American Association of Exporters and Importers, noting that the plan "could be a boon to U.S. fabric manufacturers."

With Poland's long history in "needles trades" and higher transportation costs from the United States, the plan makes sense if cutting also can be done abroad, said Mr. Milosh. The shift would be gradual because "the skill in cutting is here" with greater emphasis on lower rates of waste, he said.

Poland's interest is in producing men's suits that could be sold both here and in Europe. Higher European "price points" could help offset the costlier wage rates and shipping for U.S. imports, Mr. Milosh indicated. Caribbean and Latin American production of sportswear and China's skill in synthetic and other garments requiring "high stitch content" could find separate niches in the U.S. market, he argued.

Mr. Linet agreed with the possibility but said the "segregating out of products" may require complex negotiation of quota levels. How such an approach would work in the context of current trade liberalization talks under the General Agreement on Tariffs and Trade remains to be seen, Mr. Linet said.