September 27, 2001
News Release 01-119
Inv. No. 332-427
ITC ISSUES FIRST ANNUAL REPORT ON U.S. MARKET CONDITIONS FOR
CERTAIN WOOL ARTICLES
Imports supply most of the U.S. market for men's wool tailored clothing, according to the U.S.
International Trade Commission (ITC) in its report Certain Wool Articles: First Annual 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 second 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 third report is scheduled to be submitted to USTR by 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) on imports of worsted wool fabrics for
use in men's (and boys') suits, sport coats, and trousers. As requested by 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 annual report follow.
- U.S. consumption of men's wool tailored clothing grew in unit volume during 1996-
2000, as demand for sport coats and trousers generally rose, while demand for suits fell in
1999 and 2000. In 2000, the import shares were estimated at 78 percent for suits,
83 percent for sport coats, and 71 percent for trousers. U.S. production of such clothing
fell during most of 1996-2000.
- The U.S. market for men's worsted wool tailored clothing during 1996-2000 experienced
growing demand for goods made from "fine-micron" fabrics having an average fiber
diameter of 18.5 microns or less (often marketed under such terms as Super 100s).
Industry sources stated the decline in U.S. consumption of wool suits has been
concentrated in those selling for less than $500 each at retail, which tend to be made from
- A number of U.S. tailored clothing manufacturers reported they are experiencing
financial difficulty, mainly because of declining sales, pressure from retailers to reduce
prices, and intense competition. The manufacturers said the overall production decline in
tailored clothing largely reflected insufficient quantities and varieties of cost-competitive
fabrics available in the United States relative to Canada and Mexico, major foreign
suppliers of tailored clothing benefiting from preferential market access under the North
American Free Trade Agreement (NAFTA). The U.S. manufacturers also stated that high
U.S. import tariffs on worsted wool fabrics have put them at a disadvantage vis-a-vis their
competitors in Canada and Mexico.
- Official statistics show U.S. demand for worsted wool fabrics has decreased significantly
in recent years because of reduced domestic production of men's tailored clothing, the
major market for U.S. producers of such fabrics. The decline in fabric demand has been
concentrated in coarse-micron fabrics, the larger of the two markets. In contrast, there
has been little reduction in demand for fine-micron fabrics, because of consumer
preference for clothing made of fine wool fabrics.
- Official statistics show that U.S. worsted wool fabric production fell 51 percent during
1996-2000, while imports rose 24 percent during the same period. U.S. fabric producers
have substantial excess production capacity.
- The Commission estimates that the size of the U.S. market for worsted wool fabrics used
in the manufacture of men's tailored clothing totaled about 19 million square meters in
2000. Coarse-micron fabrics account for the majority of the market, while fine-micron
fabrics account for a comparatively small but growing market share.
- The U.S. fabric industry has sufficient capacity to produce the quantity of worsted wool
fabrics required by the U.S. tailored clothing industry, whether for fine-micron or coarse-
micron fabrics. However, several non-capacity factors, including number and variety of
fabric styles, fabric quality and consistency, minimum order sizes, and diversification of
supplier sourcing, make any significant increased utilization of U.S. fabric capacity
unlikely. U.S. clothing manufacturers claim that they need to purchase fabrics from many
mills worldwide to obtain fabric diversity that will enable them to differentiate their
clothing in the domestic market and to diversify financial risk by minimizing their
reliance on any one supplier.
Certain Wool Articles: Interim Report on U.S. Market Conditions (Investigation No. 332-427,
USITC Publication 3454, September 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.
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