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Pricey blue jeans: It's war between the US and EU
In a trade spat, the European Union has more than tripled its tariff on high-end women's denim made in America.
By Bruce Kennedy Mon 7:27 AM
Next month, the U.S. and the European Union are expected to start talks on the Transatlantic Trade and Investment Partnership (TTIP). If successful, TTIP is supposed to boost trade between the two economies by further opening markets and investment.
But a trade dispute over expensive, American-made blue jeans is showing just how difficult it might be to turn the TTIP into a reality.
On May 1, the EU announced that tariffs on women's denim trousers will rise from 12% to 38%. Many of those high-end blue jeans are made in Southern California. As the Los Angeles Times reports, most garden-variety, relatively low-cost blue jeans are now made outside of the U.S., due to lower manufacturing and labor costs.
The U.S. Trade Representative's office points out that the EU is America's largest export market, with $459 billion in U.S. goods and services exported to EU countries, supporting about 2.4 million American jobs.
According to the office of Tom Travis, a Miami-based lawyer who specializes in international trade and customs law, the tariff on jeans and other U.S. exports is the latest chapter in sanctions authorized by the World Trade Organization as retaliation for the U.S. failure to fully comply with a WTO ruling against the Continued Dumping and Subsidy Offset Act of 2000. That act, also known as the Byrd Amendment, allowed the U.S. to collect additional duties on goods considered "unfairly traded."
Even though the Byrd Amendment was repealed in late 2005, its effects continue. "The immediate issue for U.S. jeans manufacturers affected by this action is to figure out how to preserve their EU export business through this crisis," Travis said in a recent press statement. "We are working closely with both our EU and U.S. offices to formulate both short-term tactical and long-term strategic options."
The U.S. premium women's jeans market had been hurt by the recession, but according to Women's Wear Daily it was rebounding this year. WWD quotes Travis' firm, which represents many blue jean companies in Southern California, as showing January and February jean exports to the EU growing by 19.5% to a value of $7.4 million.
The California Trade Association, an L.A.-based group, is calling on lawmakers to put pressure on the EU to reverse the tariff. Ilse Metchek, the association's president, says the Los Angeles County unemployment rate stands at 10.2% and that the area can't afford to lose more jobs.
"The retaliation is easy to do on the apparel industry," Metchek told the L.A. Times. "We have no lobby in Washington."
In a trade spat, the European Union has more than tripled its tariff on high-end women's denim made in America.
By Bruce Kennedy Mon 7:27 AM
Next month, the U.S. and the European Union are expected to start talks on the Transatlantic Trade and Investment Partnership (TTIP). If successful, TTIP is supposed to boost trade between the two economies by further opening markets and investment.
But a trade dispute over expensive, American-made blue jeans is showing just how difficult it might be to turn the TTIP into a reality.
On May 1, the EU announced that tariffs on women's denim trousers will rise from 12% to 38%. Many of those high-end blue jeans are made in Southern California. As the Los Angeles Times reports, most garden-variety, relatively low-cost blue jeans are now made outside of the U.S., due to lower manufacturing and labor costs.
The U.S. Trade Representative's office points out that the EU is America's largest export market, with $459 billion in U.S. goods and services exported to EU countries, supporting about 2.4 million American jobs.
According to the office of Tom Travis, a Miami-based lawyer who specializes in international trade and customs law, the tariff on jeans and other U.S. exports is the latest chapter in sanctions authorized by the World Trade Organization as retaliation for the U.S. failure to fully comply with a WTO ruling against the Continued Dumping and Subsidy Offset Act of 2000. That act, also known as the Byrd Amendment, allowed the U.S. to collect additional duties on goods considered "unfairly traded."
Even though the Byrd Amendment was repealed in late 2005, its effects continue. "The immediate issue for U.S. jeans manufacturers affected by this action is to figure out how to preserve their EU export business through this crisis," Travis said in a recent press statement. "We are working closely with both our EU and U.S. offices to formulate both short-term tactical and long-term strategic options."
The U.S. premium women's jeans market had been hurt by the recession, but according to Women's Wear Daily it was rebounding this year. WWD quotes Travis' firm, which represents many blue jean companies in Southern California, as showing January and February jean exports to the EU growing by 19.5% to a value of $7.4 million.
The California Trade Association, an L.A.-based group, is calling on lawmakers to put pressure on the EU to reverse the tariff. Ilse Metchek, the association's president, says the Los Angeles County unemployment rate stands at 10.2% and that the area can't afford to lose more jobs.
"The retaliation is easy to do on the apparel industry," Metchek told the L.A. Times. "We have no lobby in Washington."