The U.S. market for men's wool tailored clothing has grown during the past five years, according to the U.S. International Trade Commission (ITC) in its report Certain Wool Articles: Interim Report on U.S. Market Conditions.

The ITC, an independent, nonpartisan, factfinding federal agency, released a public version of the report today. The report is the first of three to be issued as part of the ITC's general factfinding investigation U.S. Market Conditions for Certain Wool Articles (Investigation No. 332-427), which is being conducted at the request of the United States Trade Representative (USTR). The interim report will be followed by two annual reports, which are scheduled to be submitted to USTR by September 17, 2001, and September 16, 2002.

In the request letter, the USTR noted that the Trade and Development Act of 2000 temporarily reduces tariffs and establishes tariff rate quotas (TRQs) for imports of worsted wool fabrics used in men's (and boys') suits, sport coats, and trousers. As requested by the USTR, the Commission is providing information on U.S. market conditions for men's worsted wool clothing, worsted wool fabric and yarn used in such clothing, and wool fibers used in such fabric and yarn. Highlights of the interim report follow.

• The growth in demand for men's wool tailored clothing during the past five years has been supplied almost entirely by imports, which accounted for at least 70 percent of the market by quantity for suits, sport coats, and trousers in the first three quarters of 2000. U.S. production of men's wool tailored clothing has declined irregularly over the past five years.

• To meet growing consumer demand for fashionable tailored clothing, U.S. clothing producers and retailers are increasingly focusing on new fabric patterns, colors, and weaves, particularly for sport coats and selected dress trousers, in an effort to provide their customers with a different look for each new selling season (fall and spring).

• Apparent U.S. consumption of worsted wool fabrics fell 42 percent by quantity during 1996-2000. The decline was accounted for entirely by U.S. fabric producers, whose output fell by 51 percent in the period. Imports rose by 24 percent during 1996-2000. As a result, the import share of U.S. consumption during the period increased from 19 percent to 40 percent.

• Based on preliminary data available to the Commission, it appears that the domestic fabric industry may have sufficient capacity to produce the overall quantity of fabric needed by the men's tailored clothing industry. However, the available information also suggests that despite this capacity, domestic fabric producers may not be able to meet the needs of the tailored clothing industry for all fabric styles, particularly fancy fabrics for use in men's sport coats.

• Although price data currently available to the Commission on domestic and imported worsted wool fabrics have limited comparability, the prices of a few domestic fabrics that are representative of domestic production fall well within the reported range of prices for fabrics imported from Italy, the major foreign supplier of worsted wool fabrics by value.

• Representatives of the domestic fabric industry stated that it is impossible to measure the impact of the temporary duty reductions on the worsted wool fabrics at this time. However, one fabric producer reported that the duty reductions have resulted in significant downward price pressure on U.S. producers.

• U.S. tailored clothing manufacturers stated that they are at a cost disadvantage vis-a-vis their counterparts in Canada and Mexico, whose import tariffs on non-North American (e.g., Italian) fabrics are much lower than U.S. tariffs on wool fabrics outside of the TRQs.

Certain Wool Articles: Interim Report on U.S. Market Conditions (Investigation No. 332-427, USITC Publication 3422, May 2001) will be posted in the Publications section of the ITC's Internet site at www.usitc.gov. A printed copy may be requested by calling 202-205-1809 or by writing to the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington DC 20436. Requests may be faxed to 202-205-1821.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade, and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requestor. General factfinding investigation reports are subsequently released to the public unless they are classified by the requestor for national security reasons.