H.R. 4339
Page Three

Apparel imported
as parts of sets

Blouses, women's
Coats, women's
Trousers, women's

Sweaters, women's

Trousers, men's

Dresses

Shirts, men's

Robes

Coats, men's

TOTAL

Quantity
(1,000 dozens)

1982

388.7

29.7

185.0

32.7

11.0

.8

10.7

6.0

2.8

667.4

19831/

497.1

56.5

183.8

Value
(1,000 dollars)

1982

15,593

3,463

3,222

2,022

60.4

26.6

5.8

10.9

18.3

3.1 862.5

1/ Estimated based on imports during January-November 1983.

In 1983, women's garments made up 94 percent of the total value of such articles, or $33 million. Women's blouses which were parts of sets accounted for 57 percent of total set parts imports, amounting to $20 million in 1983, and consisting mainly of blouses of manmade fibers. Garments imported as parts of sets in 1983 originated primarily in the countries of Hong Kong, Taiwan, Korea, and Thailand, with Hong Kong and Taiwan accounting for 57 percent of the value. None of the set parts were sourced from column 2 countries.

Comparison with Present Law

The subject apparel is provided for in part 6, schedule 3 of the TSUS. As shown in Table 1, the difference between the column 1 rates of duty on articles classified as entireties and those on the same articles imported separately will continue to grow, because of the staged reductions granted in the Tokyo round of the MTN. The table also sets forth the pre-MTN and the column 2 duty rates applicable to these articles. No articles subject to the column 2 duty rates are currently being imported. No preferential duty rates are provided as to imports from least developed developing countries (LDDC's), and imports from beneficiary countries under the GSP and CBI are not eligible for duty-free entry.

19831

497

113

475

255

260

25,900

20,316

6,104

3,383

2,858

1,066

520

469

353

337

35,406

Apparel of cotton, of wool, and of manmade fibers is subject to control under the Multifiber Arrangement (MFA). Apparel imported as parts of sets is treated, for purposes of quantitative restrictions, as if the components were imported as individual articles; that is, each component is subject to the restrictions applicable to that article imported separately.

Effect on Revenue

In 1983, apparel articles imported as parts of sets, if reclassified as stipulated by the legislation, would have generated an estimated $1.4 million in additional customs revenues. Since import quantities under the sets provisions

H.R. 4339
Page Four

increased 35 percent from 1982 to 1983, and since the tariff gap between imported articles classified as sets and those articles classified individually will widen during the next several years, the level of additional tariff revenues which would be collected annually can be expected to grow substantially. If imports under the set provisions grow by only 20 percent per year (since trade patterns have been established), and if the tariff differential as to the large-volume articles increases by an additional 2 percent a year, the revenue gains would be as follows:

(1,000 dollars)

Subcommittee Action

Agency Reports

Markup

Year

1983

1984

1985

1986

1987

1988

Administration

The Department of Commerce has no objection to enactment of H.R. 4339 provided that the language in section 1 of the original bill be changed as recommended by the Department of Commerce.

The International Trade Commission submitted an informative report.

1,390

2,477

3,963

5,945

8,561

11,985

On June 27, 1984, the Subcommittee on Trade ordered H.R. 4339 favorably reported to the full Committee on Ways and Means by voice vote, with an amendment recommended by the Administration to allow a number of additional enumerated articles (such as pajamas and swimsuits) which are traditionally sold as sets to continue to be classified as sets under the TSUS. The effective date was also amended to conform with other bills providing for an effective date 15 days after enactment.

SUMMARY OF TESTIMONY ON H.R. 4339

Department of Commerce: Commerce opposes the language in H.R. 4339 that defines "sets" because it is too limiting. There would be no objection to this bill if the language was changed to that proposed by the Commerce Department.

H.R. 4339
Page Five

Supports

Statements for the Record

The American Fiber Textile Apparel Coalition: This bill closes a loophole which permits very substantial quantities of apparel to enter the United States at duty rates which are lower than intended by Congress. This problem was created because of tariff rate reductions on garments classified in sets which produced lower tariff rates than on the same garments classified individually. As these reductions, which were negotiated during the Tokyo Round, are implemented, incentive is increased for importers to bring in garments as sets and thereby avoid the higher duty applicable to individual garments.

Wearing apparel:

379.43: 379.46 :

:

379.48 : 379.49 :

U.S. rates of duty on garments imported as separate articles and as parts of sets, by TSUS items (Cents per pound; percent ad valorem)

Coats and slacks imported as separates---

The above garments Imported as parts of sets and other garments imported as sets. 3/

Not knit:

Abridged description

Coats, shirts and slacks imported as separates--

The above garments imported as parts of sets and other garments imported as sets. 3/

Of manmade fibers:

:

: Men's and boys' not ornamented apparel:

Of cotton:

Coats, shirts, and slacks imported as separates------

The above garments imported as parts of sets and other garments imported as sets. 3/

Not knit:

Knit:

Coats and slacks imported as separates-----
Shirts and sweaters imported as separates--

The above garments imported as parts of sets and other garments imported

us sets. 3/

Coats imported as separates:

Valued not over $4 each---

See footnotes at end of cable.

Valued over $4 each----

Dressing gowns and robes imported as separates:

Valued not over $2.50 each-----

Valued over $2.50 each-------

: Men's and boys' not ornamented apparel--Continued

:

Of cotton--Continued

:

Not knit--Continued

Wearing apparel: U.S. rates of duty on garments imported as separate articles and as parts of sets, by TSUS items--Continued

(Cents per pound; percent ad valorem)

Of wool:

Knit:

Abridged description

Couts, shirts, slacks and swimwear imported as separates-------

The above garments Imported as parts of sets and other garments Imported

as sels. 3/

See footnotes at end of table.