WASHINGTON - U.S.
Trade Representative Robert B. Zoellick announced today that a World Trade
Organization (WTO) panel has upheld U.S. laws on determining the country of
origin of textile and apparel products in a dispute brought by India challenging
these rules. Rules of origin are used to determine the country of origin of
imported goods. The panel concluded that the U.S. laws are consistent with U.S.
WTO obligations, rejecting all of India's challenges.
"This is an
important victory for American trade laws and American textile trade. Detailed
U.S. rules of origin for textiles help make sure that everyone plays by the
rules, and we are very pleased that the panel rejected India's complaints," said
Zoellick. "Today's report reaffirms that U.S. rules are consistent with our WTO
commitments, and it shows that countries do have flexibility under the WTO to
develop accurate rules of origin. The Administration is fully committed to
enforcing fair, predictable rules that ensure fair trade."
findings are significant because they uphold rules of origin that ensure that
textile and apparel products imported into the United States accurately reflect
their country of origin, and not where minor finishing operations take place.
The WTO panel
rejected each of India's arguments. Specifically, the panel:
India's argument that the U.S. rules of origin improperly differentiate between
textile and apparel products and other industrial products;
India's argument that the U.S. rules were adopted to protect the U.S. textile
industry from competition;
- rejected India's argument that the U.S.
rules of origin distort, disrupt and restrict international trade; and,
rejected India's argument that the U.S. rules are administered in a
Instead, the panel agreed with the United States
that the rules of origin are entirely consistent with U.S. obligations under the
WTO Agreement on Rules of Origin.
Section 334 of
the Uruguay Round Agreements Act of 1996, the so-called "Breaux-Cardin rules,"
established statutory rules of origin applicable to textile and apparel products
based on standards set out in the law. Section 405 of the Trade and Development
Act of 2002 amended Section 334 by providing further rules of origin for
specific products. On January 11, 2002, India requested WTO dispute settlement
consultations with the United States regarding Section 334 and Section 405.
Consultations were unsuccessful, and a panel was established on June 24,
India alleged that Sections 334 and 405 were inconsistent with
various provisions of the WTO Agreement on Rules of Origin. In today's report,
the panel rejected all of these claims.
India will have an opportunity
to appeal today's report.