Sockin’ it to Honduras

A constant refrain from Democrats in Congress is that the Bush administration has been lax about enforcing the terms of U.S. trade agreements. Such a conclusion reveals a true naivete about trade diplomacy. The U.S. Trade Representative maintains ongoing dialogues with our trade partners during which many trade irritants are addressed and resolved without need of resort to the stick.

But Congress wants to see more of the stick, and more of the stick it shall see. Apparently our poor, but industrious Honduran neighbors have been shipping too many socks stateside. U.S. imports of cotton, wool, and man-made fiber socks from Honduras rose from 10.9 million dozen pairs in 2005 to 15.2 million dozen pairs in 2006, an increase of nearly 50 percent. In 2007 through June, imports from Honduras are up about 60 percent from the same period in 2006.

Under the terms of the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), the U.S. government can impose special safeguards in the form of new a tariff if a textile or apparel product:

“is being imported into the United States in such increased quantities, in absolute terms or relative to the domestic market for that article, and under such conditions as to cause serious damage, or actual threat thereof, to a domestic industry producing an article that is like, or directly competitive with, the imported article.”

The Committee for the Implementation of the Textile Agreements (CITA), an agency within the Commerce Department, initiated proceedings for such a safeguard last week. If it makes an affirmative finding, duties of 13.5 percent will be imposed later in the year.

Despite the surge in sock imports from Honduras, the country still accounts for only about 4 percent of U.S. consumption. How can such a miniscule presence account for “serious damage” or even the threat thereof to the domestic industry?

The safeguard rule is a farce, and its application to a country which depends heavily on its few manufacturing industries, and where two-thirds of the citizens live in poverty, explains a lot about why international regard for
America is in decline.