Politics

Facing Closure, U.S.'s Largest Sleeping Bag Maker Seeks Relief From Free Trade Loophole

Sen. Jeff Sessions, R-Ala., talks with an acquaintance outside the floor of the Senate on Capitol Hill in Washington Friday, Dec. 17, 2010.(AP)

Sen. Jeff Sessions, R-Ala., talks with an acquaintance outside the floor of the Senate on Capitol Hill in Washington Friday, Dec. 17, 2010.(AP)

The country's largest manufacturer of sleeping bags says new competition from Bangladesh could force it out of business if the U.S. does not level the playing field.

Exxel Outdoors Inc., which employs nearly 70 workers in its Alabama factory and makes about 2 million sleeping bags per year, has been pressing the Obama administration to lift an exemption that lets Bangladesh import sleeping bags into the country without paying a 9 percent tariff.

"You can't leave an American manufacturer at a competitive disadvantage with a foreign worker," Harry Kazazian, chief executive of the company, told FoxNews.com.

But that's apparently what the Obama administration has done, turning down the company's request in an initial ruling and forcing Exxel to submit another request. 

The office of the U.S. Trade Representative, which is reviewing Exxel's request, told FoxNews.com that its review will conclude in the spring and that President Obama would have to sign off on any changes to the list of duty-free products – changes that would go into effect before July 1.

"We take Exxel's concerns seriously," the office said in a statement.

Exxel is also seeking help from Congress.

Sen. Jeff Sessions, R-Ala., has tried to slap a tariff on Bangladesh sleeping bags but he has been unable to sway his fellow lawmakers to change the U.S. Generalized System of Preferences, or GSP, which determines which products third-world countries can import duty free.

So Sessions has placed a hold on the annual GSP bill, making it all but certain that the program will lapse at the end of this month.

"I have supported free trade, probably more than my colleagues," he said on the Senate floor Friday. "But I have worked for two years to try to obtain a simple justice to close a loophole in the tariff laws that has impacted and will close a sleeping bag textile manufacturer in my state."

"They are an independent, hard-working people," he said. "And this bill as written will close that plant. And it should not happen. "

Sleeping bag imports have been on the duty-free list since Czechoslovakia successfully lobbied for it in the early 1990s. But the country, which split soon afterward into the Czech Republic and Slovakia, never followed through with its plan to get into the sleeping bag business, leaving the loophole dormant until Bangladesh took advantage in recent years, an Exxel official told FoxNews.com.

The company says it has been able to compete with China because the communist regime isn't exempt from the tariff on its sleeping bag imports. But the company says in 2009 it began losing major orders from large U.S. retailers because of new sleeping bag operations in Bangladesh flooding the market with their imports.

Exxel says if its factory is forced to move offshore or close down, the economic ripple effect would hurt the company's U.S. vendors, such as suppliers of sewing thread, sleeping bag fill, packaging, as well as suppliers of trucking services and other factory supplies.

Kazazian, said it is ironic to be in this situation after he moved his factory from Mexico to Alabama a few years ago, adding jobs to the economy.

"If the playing field should be tilted, it should be tilted in an American manufacturer's favor," he said, adding that he's not looking for a hand out.

"I want the law to be interpreted the way it should be and the playing field leveled," he said.