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L.A. Lawmakers Want TTIP to Address EU Jeans Tax

Thursday, June 13, 2013
Sandler, Travis & Rosenberg Trade Report

Four members of the House of Representative representing the Los Angeles-area districts that house a number of high-end jeans manufacturers are asking the Obama administration to use upcoming talks on a free trade agreement with the European Union to eliminate a duty hike the EU recently imposed on U.S.-made women’s jeans. This issue was brought to the forefront after news media picked up a press release from Sandler, Travis & Rosenberg in which Managing Partner Tom Travis pointed out that the EU tariffs are jeopardizing an important market for a traditional U.S. manufacturing sector just beginning to regain market share from foreign competitors.

In a recent letter, Democratic Reps. Lucille Roybal-Allard, Xavier Becerra, Linda Sanchez and Grace Napolitano told Acting U.S. Trade Representative Miriam Sapiro that Californian premium denim brands have successfully expanded to new markets in Europe and Asia in recent years, growth that supports “thousands of jobs and hundreds of small businesses from sewing contractors to cutting services to dye and wash facilities to textile suppliers.” However, they warned, the May 1 increase of EU duties on women’s jeans imported from the U.S. from 12% to 38% could price these jeans out of the EU market and force their U.S. manufacturers to “consider relocating overseas.” The lawmakers therefore requested that USTR not only seek to reduce these duties but also make “fair market access for American-made denim and other apparel products a priority” in the Transatlantic Trade and Investment Partnership negotiations.

The EU tariff hike was authorized under a World Trade Organization grant of authority for retaliation against the United States’ continued distribution of tariffs levied on unfairly traded foreign-made goods to affected U.S. producers. The U.S. law prescribing that system (the Continued Dumping and Subsidy Offset Act) was repealed years ago in response to an adverse WTO ruling, but duties collected previously are still being handed out as requisite legal or administrative procedures are concluded. When the amount distributed in 2012 spiked, so did the value of U.S. exports the EU could target, prompting Brussels to add women’s jeans to the retaliation list.

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