- The Washington Times - Tuesday, March 2, 2004

Robert Lim is worried about running out of clean socks. The analyst for Fox Well International Corp., a Los Angeles sock importer, is feeling the pinch of a U.S. Customs program that is stopping or delaying the entry of socks from China, South Korea, Taiwan, Pakistan and 18 other nations as officers test to make sure they are not smuggled from somewhere else.

“We don’t run a very large inventory because socks are seasonal. It’s affecting our business and going down our channels, our partners, our agents and their accounts as well,” Mr. Lim said.

About 540,000 pairs of socks had been held up so far, he added.

U.S. Customs and Border Protection, part of the Homeland Security Department, initiated the special operation Feb. 2. The program is scheduled to run until April 30, though the time frame may be reduced or expanded.

So far, about $10 million worth of hosiery has been detained.

For importers and retailers, the unprecedented sock seizures are thinly veiled protectionism — part of a broader campaign by textile and apparel companies to limit foreign competition.

For domestic manufacturers and customs officials, the operation is a serious effort to prevent smuggling, evasion of quotas and failure to pay duties — a serious problem that costs the Treasury money and undermines trade policy.

“We’re just enforcing the law. We have serious allegations, and we would be remiss if we turned our back on them,” said Janet Labuda, director of the textile enforcement division at Customs and Border Protection.

Rep. Cass Ballenger, North Carolina Republican, and Rep. Robert B. Aderholt, Alabama Republican, wrote a letter to Miss Labuda in October complaining that some countries were mislabeling socks to gain preferential access to the market. The mislabeling allows foreign rivals to avoid quotas and sometimes pay lower duties.

“The future of our domestic hosiery and sock manufacturers is extremely disadvantaged by these illegal trading practices,” the letter said.

In November, Miss Labuda replied to the congressmen that customs officials were developing a plan that might include detaining shipments of socks and having officers verify shipment origins by examining paperwork. In some cases, labs would test fiber content.

Lab tests are targeted at China, South Korea, Taiwan and Pakistan.

About half of all socks sold in the United States are imported, but a consumer shortage is no immediate threat. Importers worry, however, that they will lose business and customers.

“Usually goods come in and go through customs in four to five days. I have goods that have been in there since the start of February. It’s very tough,” said Elie Levy, president of E&E; Hosiery, a New York importer.

Mr. Levy did not fault customs officials for trying to prevent illegal shipments but said far-reaching policy against such a broad apparel category was unnecessary.

Groups representing importers and retailers see pure politics.

“It’s a politically motivated effort in an election year to try to take on importers,” said Julia Hughes, vice president of international trade for the U.S. Association of Importers of Textiles and Apparel.

Spokesmen for Mr. Ballenger and Mr. Aderholt did not return calls for comment, but their letter focused on illegal practices. Miss Labuda also emphasized that the operation was meant strictly to enforce the law.

The domestic textile industry is searching for legal protection from imports as it sheds jobs at an alarming rate. Industry employment fell to 428,000 at the end of last year, a loss of 50,000 jobs from 2002, the American Textile Manufacturers Institute reported.

China is the biggest competitor and the most frequent target of efforts to keep out imports. The country looms as a growing threat because import limits — the same quotas evaded by the mislabeling — are scheduled to disappear at the end of the year.

Chinais expected to become the “supplier of choice” for most U.S. importers because it can make a variety of products at a competitive price, said a January report by the U.S. International Trade Commission.

The only uncertainty is legal action to keep out Chinese products, such as safeguards the industry won in November on knit fabric, bras and dressing gowns. The safeguards effectively place new quotas on Chinese-made goods.

Lloyd Wood, a spokesman for the American Manufacturing Trade Action Coalition, said socks are one category under consideration for a petition.

“We’re looking for ways to keep the industry as competitive as possible. Our industry has to abide by rules. When others don’t abide by the same rules, that gives them an unfair advantage. We’re just trying to survive,” Mr. Wood said.

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