CBP official says enforcement of quotas and duties in the textile industry will become a two-way street.
Supporters of the Trans-Pacific Partnership say the free trade agreement being pursued by the Obama administration will include much stronger provisions allowing the United States to enforce its conditions, but a U.S. Customs official says those types of authorities cut both ways.
Exporters of “Made in the USA” apparel should be prepared to have foreign customs agencies comb through their facilities checking that production matches up with the import declarations in the country concerned to cut down on fraud, Cynthia Whittenberg, executive director of trade policy and programs at Customs and Border Protection, said Monday during a panel discussion at the American Association of Exporters and Importers conference in Washington.
The United States today belongs to 14 bilateral and multilateral free trade agreements and trade preference programs, as well as 10 other preference programs under the World Trade Organization.
U.S. Customs for many years has sent teams of officers to verify the capabilities of textile factories in other nations to produce the type and quantity of apparel that are listed on import documents in an effort to thwart illegal transshipment. Unscrupulous importers are known to ship goods made in one country to an intermediate point and then declare it as the country of origin to avoid textile quotas or high duty rates. Overseas manufacturers are selected with the help of the importer and during the visits officers check production records, purchase orders for fabric to make sure it was bought from countries that qualify for duty preference, and whether there is sufficient weaving equipment, among other things.
Such enforcement provisions, for example, are part of U.S. free trade agreements with Columbia, Peru and Korea, but only in the textile sector.
In the past couple of years, some developing countries have begun sending customs officers to the United States to conduct factory verification of U.S. exports and make sure claims of U.S. origin are valid, Whittenberg said
The trend is expected to increase over the next five to 10 years and CBP will have to consider planning resources to chaperone the foreign customs specialists, she said.
“The U.S. would write this into agreements, but I guess it never occurred to us that other countries would start claiming the right to visit U.S. exporting facilities,” Whittenberg said.
“So I’m putting exporters here on notice that you’re gonna get visits,” she added.
Trade compliance experts say such visits take time and resources for plant managers to conduct tours and produce the requested documentation for customs authorities.
Just a few years ago, Mexico streamlined its audit procedures for the verification of textile products entering the country to help reduce the burden on U.S. textile companies.
Foreign customs agencies step up visits to U.S. apparel makers
