United States Tariff Commission Women's

UNITED STATES TARIFF COMMISSION WOMEN'S DRESS SHOES: BERNIE SHOE CO. HAVERHILL, MASS. Report to the President Firm Investigation No. TEA- F- 20 Under Section 301 (c)(1) of the Trade Expansion Act of 1962 TC Publication 388 Washington, D. C. April 1971 UNITED STATES TARIFF COMMISSION Glenn W. Sutton Bruce E. Clubb Will F,. Leonard, Jr. George M. Moore j. Banks Young Kenneth R. Mason, secretary Address all communications to United States Tariff Commission Washington, D. C. 20436 CONTENTS Page Report to the President 1 Finding of the Commission 2 Views of Commissioners Sutton and Leonard 3 Views of Commissioners Clubb and Moore 4 Information obtained in the investigation: Description of articles under investigation A-1 U.S. Tariff treatment A-5 U.S. consumption, production, and imports A-6 Prices in the U.S. market A-9 Data relating to the Bernie Shoe Co.: * * * * * * 4(- Statistical appendix A-19 APPENDIX TABLES Table 1.--U.S. rates of duty applicable to women's and misses' footwear of types provided for in specified TSUS items, July 1, 1934 and GATT concessions A-20 Table 2.--Nonrubber footwear for women and misses: U.S. rates of duty and imports for consumption, by specified TSUS items, 1965-70 A-21 Table 3.--Bernie Shoe Co.: Comparative statements of profit and loss, 1965-70 Table 14.--Bernie Shoe Co.: Ratios of financial data, 1965-70 *** Table 5.--Bernie Shoe Co.: Comparative statements of financial condition, 1965-70 *3(4 Note.--The whole of the Commission's report to the President may not be made public since it contains certain information the publication of which would result in the disclosure of the operation of an indivi- dual firm. This published report is the same as the report to the President, except that the above-mentioned information has been omitted. Such omissions are indicated by asterisks. REPORT TO THE PRESIDENT U.S. Tariff Commission, April 19, 1971. To the President: In accordance with section 301(f)(1) of the Trade Expansion Act of 1962 (76 Stat.885), the U.S. Tariff Commission herein reports the results of an investigation made under section 301(c)(1) of that act, in response to a petition filed by a firm. On February 18, 1971, Mr. Leslie Brindis, treasurer of the Bernie Shoe Co., of Haverhill, Mass., filed a petition for determination of its eligibility to apply for adjustment assistance. The Commission, accordingly, on March L, 1971, instituted an investigation to determine whether, as a result in major part of concessions granted under trade agreements, articles like or directly competitive with women's dress shoes produced by the aforementioned firm are being imported into the United States in such increased quantities as to cause, or threaten to cause, serious injury to such firm. Public notice of the receipt of the petition and of the institu- tion of the investigation was given by publication in the Federal Register of March 10, 1971 (36 F.R. 4639). No public hearing was requested and none was held. The information in this report was obtained principally from the officials of the petitioning firm and from the Commission's files. 2 Finding of the Commission On the basis of its investigation, the Commission 1/ finds unanimously that articles like or directly competitive with women's dress shoes produced by Bernie Shoe Company, Haverhill, Mass., are not, as a result in major part of concessions granted under trade agreements, being imported into the United States in such increased quantities as to cause, or threaten to cause serious injury to the company. 1/ Commissioner Young did not participate in the decision. 3 Views of Commissioners Sutton and Leonard Our determination in the instant case is negative because the increase in imports of any footwear like or directly competitive with that produced by the Bernie Shoe Company, Haverhill, Mass., is not the result in major part of concessions granted under trade agreements. Our reasoning in support of this determination is set forth in the separate statements of our views in the Commission's report on nonrubber footwear submitted to the President on January 16, 1971. 1/ 1/ Nonrubber Footwear: Report to the President on Investigation No. TEA-I-18 . TC Publication 359, 1971, pp. 25-47. Views of Commissioners Clubb and Moore This investigation relates to a petition filed by the Bernie Shoe Company of Haverhill, Mass., under section 301(a)(2) of the Trade Expansion Act of 1962 for a determination of its eligibility to apply for adjustment assistance. For the reasons set out below, we have made a negative determination. The Bernie Shoe Company produces mainly women's dress 'shoes of cement construction. Since 1966 the firm's output has consisted of shoes with vinyl uppers, the bulk of which retail in the $10 to $11 price range. In 1968, the firm began to sell imported shoes. Under section 301(c)(1) of the Trade Expansion Act, the following four requirements must be met in order for the Commission to make an affirmative determination: (1) Imports of a product like or directly competitive with an article produced by the firm must be increasing; (.2) The increased imports must be a result in major part of concessions granted under trade agreements; (3) The firm must be seriously injured, or threatened with serious injury; and, (4) The increased imports resulting from trade-agreement concessions must be the major factor causing or threaten- ing to cause the serious injury. If any of these four requirements is not met, then a negative determination is necessary. In this case we have determined that the third requirement has not been met. Increased im orts in major wart a result of trade- agreement concessions The footwear produced by the Bernie Shoe Company is similar in type, construction, and price to that involved in other recent investigations conducted by the Commission. We concluded in those investigations that, within the meaning of the statute, like or directly competitive footwear was being imported in increased quanti- 'ides and that the increased imports were in major part the result of trade-agreement concessions. For the reasons set forth in those investigations, 1/ we reach a similar conclusion in the instant case. Thus, the first two requirements of the statute have been met. Serious injury or threat of serious injury The third requirement of the Act is that the firm must be suf- fering serious injury or be threatened with serious injury. We have interpreted serious injury to mean "an important, crippling, or mortal injury; one having permanent or lasting consequences. Such injuries are distinguished from the less important and temporary injuries which domes- tic concerns are expected to absorb without governmental assistance." 2/ * lj Women's and Misses' Dress Shoes with Leather, Vinyl, or Fabric Uppers . TC Publication 323, 1970, at 11-1 , and Nonrubber Footwear: Resort to the President on Investi ation No. TEA-I-18 TC Publication 359, 1971, at 12-13 and 17-19; Dress Louis Shoe Co. Inc. TC Publication /79, 1971, at 4. 2/ Pianos and Parts ThaTIflLe2ort to the Y-riaent on Investiga- tion No. TEA-I-14 TC Publication 3 09D - 6 The company's financial experience, here briefly described, does not meet the test of serious injury. We also conclude that Bernie Shoe Company is not threatened with serious injury. Thus, the third requirement of the statute has not been met and we .are compelled to make a negative determination in the instant case. We would note, however, that under the Trade Expansion Act, Bernie Shoe Company may file a new petition with the Tariff Commission at a future date should the company's condition deteriorate. A-1 INFORMATION OBTAINED IN THE INVESTIGATION Description of Articles Under Investigation In recent years the output of the Bernie Shoe Co., which is still in operation, has consisted almost entirely of women's dress shoes, 1/ mostly with uppers of vinyl, made by the cement process (a small quan- tity of women's boots has also been produced at this plant). The company's production of women's dress shoes are sold at retail prices ranging from $10 to $15 per pair; however, about 75 percent of the output retails in the price range of $10 to $11 per pair. The principal features of women's shoes that determine the activ- ities for which a particular pair is suitable--and thus the trade des- ignations such as "dress;" "casual," and "slippers"--are the cut of the uppers, the style and height of the heels, the material used for the uppers, the kind of ornamentation, and the material and construction of the sole. In general or commercial usage, however, these descriptive terms for footwear may have various meanings. Some of them are specifically defined for tariff purposes in the headnotes (including the statistical headnotes) to part lA of schedule 7 of the Tariff Schedules of the United States (TSUS). 2/ 1/ In this report, as in the Tariff Schedules of the United States (TSUS), the terms "women" and "misses" are used to differentiate size categories of footwear, not age of wearer, as follows: "women" refers to American women's sizes 4 and larger, and "misses" refers to American misses' sizes 12-1/2 and larger but not as large as American women's size 4. 2/ Some of the definitions for tariff purposes of descriptive terms (e.g., "slippers" and "casuals"), however, apply to only a small por- tion of the footwear for which such terms are currently used in retail outlets; see U.S. Tariff Commission, Nonrubber Footwear: Report to the President on Investigation No.

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