Textile Industry Files Comments on Trade Agreement Violations and Abuses

WASHINGTON, DC – The National Council of Textile Organizations (NCTO) filed public comments late yesterday afternoon in response to President Trump’s executive order directing the federal government to investigate violations and abuses of U.S. trade agreements.

“A thorough investigation of trade agreement abuses and violations is long overdue and we appreciate President Trump’s desire to finally review this important matter,” said NCTO President and CEO Auggie Tantillo.

“If America is to fix the systemic problems that plague the international trading structure and stop trade cheats from driving American production offshore, policymakers need a better understanding of the illegal or unfair trade tactics that are being used to hurt U.S. industry, including textiles,” Tantillo finished.

A notice for public comments (82 FR 29622) was issued by the U.S. Department of Commerce and the Office of the U.S. Trade Representative (USTR) on June 29, 2017 pursuant to Executive Order 13796 signed by President Trump on April 29, 2017. Documents associated with this matter are archived under Docket USTR-2017-0010.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

• U.S. employment in the textile supply chain was 565,000 in 2016.
• The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase since 2009.
• U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016.
• Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.

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CONTACT: Lloyd Wood
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NCTO CEO Testifies at USTR NAFTA Hearing, Outlines U.S. Textile Renegotiation Objectives

WASHINGTON, DC – National Council of Textile Organizations (NCTO) President & CEO Auggie Tantillo testified at the U.S. Trade Representative’s (USTR) hearing on Negotiating Objectives Regarding Modernization of North American Free Trade Agreement (NAFTA) with Canada and Mexico held in Washington, DC on Tuesday, June 27.

In his remarks as prepared for delivery, Tantillo outlined the U.S. textile industry’s NAFTA negotiating objectives:

“On behalf of the National Council of Textile Organizations, thank you for the opportunity to provide input as USTR develops its objectives for modernizing NAFTA.  NCTO represents the full spectrum of the U.S. textile sector, from fibers to yarns to fabrics to finished products, as well as suppliers of machinery, chemicals, and other products and services with a stake in the prosperity of our industry.  The entire U.S textile manufacturing chain, from fiber through finished sewn products, employs 565,000 workers nationwide.  In 2016, the industry manufactured over $74 billion in output, while exporting more than $26 billion of our production.

We strongly support President Trump’s intention to reopen NAFTA and agree that it can be updated and improved to significantly enhance U.S. textile production, exports, and employment.  The NAFTA region enjoys vibrant fiber, yarn, and fabric sectors in addition to cut and sew capabilities.  As a result, NCTO supports building on the successes of NAFTA through seeking reasonable improvements to the agreement, but not a cancellation thereof, due to the high level of supply chain integration that exists today.

This partnership is evidenced by robust trade flows.  The U.S. textile sector has a demonstrated capability of developing export markets within the NAFTA region.  In fact, Mexico and Canada are our two largest export markets, where U.S. textile and apparel exports topped $11 billion in 2016.  Furthermore, we maintain a positive trade balance in the sector with our NAFTA partners, achieving a $3.5 billion surplus last year.

NCTO does not foresee a need to reinstate tariffs on NAFTA-qualifying trade.  Instead, we recommend a thorough review of the rules of origin to ensure that lucrative tariff benefits are appropriately reserved for manufacturers within the region.  NAFTA is based on a yarn-forward rule of origin for textile and apparel trade, a main driver for the integration that has developed among the three countries.  Yarn forward was originally devised under NAFTA and is the accepted rule for the industry and the U.S. government in every free trade agreement (FTA) since because it reserves key benefits for manufacturers within the signatory countries.  It is also easier to enforce than a value-added rule.

Despite the logic of the yarn-forward structure, most U.S. FTAs, including NAFTA, also contain damaging loopholes in the textile rules of origin.  The most egregious example is tariff preference levels.  Tariff preference levels (TPLs) allow for products to be shipped duty free despite their components, representing the bulk of the value, being sourced from outside countries.  For example, a cotton top, made from Chinese yarn and fabric, can be cut and sewn in Mexico and shipped duty free to the United States.  Consequently, TPLs undermine benefits for NAFTA textile manufacturers, transferring them to non-signatories, such as China, who often use predatory trading practices and have made no market-opening concessions themselves.

Altogether, Mexico and Canada may ship nearly 236 million square meter equivalents of apparel, made-ups, and fabric and 12.8 million kilograms of yarn containing third-party inputs annually under the TPLs.  It is our strong recommendation that the NAFTA TPL regime be eliminated.

Beyond TPLs, there are other yarn-forward derogations, including assembly-only rules for certain garments.  These additional loopholes warrant analysis to determine whether they should be eliminated or adjusted to enhance the benefits for U.S. textile manufacturers under the agreement.   We also believe that there should be a review of certain buy-American concessions that were unnecessarily granted to our NAFTA partners.

As a final point, it is our view that there has been a systematic deemphasis of commercial fraud enforcement at U.S. Customs and Border Protection (CBP) over the past 30 years.  CBP suffers from both a lack of resources and focus particularly considering the layering of new trade agreements and significant increase in imports over this time.  As a result, the benefits of NAFTA are being siphoned off by those willing and able to circumvent U.S. trade laws.  Our sector is especially prone to fraud, noting that textiles and apparel represent 40 percent of all U.S. duties collected, or $14 billion a year.  Clearly, improving NAFTA customs enforcement should be a major focus of this renegotiation.

In conclusion, we fully agree with President Trump that NAFTA can be improved through a set reasonable adjustments to the current text designed to enhance U.S. textile manufacturing and exporting.  Further, we believe that by closing unnecessary loopholes in the agreement and placing a greater emphasis on customs enforcement, all parties throughout the NAFTA region will benefit.  Doing so will help to build on the vibrant textile and apparel production chain in North America that has evolved under NAFTA.

Thank you for your consideration of our views, and NCTO looks forward to working with the Trump administration as the NAFTA modernization effort progresses.”

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CONTACT:  Lloyd Wood
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U.S. Textile Industry Files Public Comments on NAFTA Renegotiation Objectives; Eager to Work with President Trump to Improve Deal

WASHINGTON, DC – Today, the National Council of Textile Organizations (NCTO) filed public comments with the Office of the U.S. Trade Representative (USTR) outlining the U.S. textile industry’s priorities in the forthcoming renegotiation of the North American Free Trade Agreement (NAFTA).  (The comments are pasted at the bottom of this release.)

“The U.S. textile industry welcomes President Trump’s decision to renegotiate NAFTA,” said NCTO Chairman William V. McCrary Jr., Chairman and CEO of William Barnet & Son, LLC, a synthetic fiber/yarn/polymer firm headquartered in Spartanburg, South Carolina.

“It is in America’s national interest to modernize the agreement and NCTO is eager to work with President Trump to make it even better,” McCrary continued.

“Let me be clear: NAFTA is vital to the prosperity of the U.S. textile industry, and NCTO steadfastly supports continuing the agreement.  With that said, NAFTA can be improved to incentivize more textile and apparel jobs and production in the United States, Canada, and Mexico,” McCrary added. 

“Eliminating loopholes that shift production to third-party countries like China and devoting more customs enforcement resources to stop illegal third-country transshipments are two changes that would make the agreement better,” McCrary said.

“We look forward to working with our industry partners throughout the NAFTA region to improve this agreement for all,” McCrary finished.   

U.S. Trade Representative Robert Lighthizer formally notified Congress on May 18, 2017 that President Trump intended to renegotiate NAFTA.  This action triggered a request for public comments found at 82 FR 23699 and dated May 23, 2017 (Docket: USTR–2017–0006).  That public comment period closes today. 

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

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CONTACT: Lloyd Wood
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lwood@ncto.org

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NCTO Pays Tribute to Late AFMA President Paul O’Day

WASHINGTON, DC – Paul O’Day, President of the American Fiber Manufacturers Association (AFMA) since 1984, died on June 1.  He was 82.

“It is a sad day for the U.S. textile industry,” said National Council of Textile Organizations (NCTO) Chairman William V. McCrary Jr., Chairman and Chief Executive Officer of William Barnet & Son, LLC, a synthetic fiber/yarn/polymer firm with plants and/or offices in the Americas, Europe, and Asia headquartered in Spartanburg, South Carolina.

“I’ve been proud to call Paul a friend for decades and worked with him closely during my two-year stint as AFMA chairman.  He was a strategic thinker who safeguarded the U.S. fiber industry’s interests in Washington during very tumultuous times,” McCrary continued.

“Many important policy issues arose during Paul’s three decades as president at AFMA that would not have been resolved favorably without his wise counsel and resolute, steady leadership,” McCrary added.

NCTO President and CEO Auggie Tantillo, who worked directly with O’Day since the early 1980s said, “For 33 years, Paul O’Day exhibited an unmatched dedication to AFMA and the industry he loved.”

“Paul represented his constituency with a style and level of decorum virtually unheard of in the current Washington environment.  Famously courteous and humble, Paul won heated policy debates through the power of his extraordinary intellect, his expansive institutional knowledge and his total command of the subject matter at hand.  Completely secure in his role and the critical contribution he made to every project, Paul was always quick to defer credit and to shower praise on his colleagues,” Tantillo added.

“Fiber manufacturers and the U.S. textile industry lost a priceless asset who will be greatly and deservedly missed,” Tantillo finished.

AMFA’s press statement on Paul O’Day’s passing is at this link, and his obituary can be found here. 

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers. 

 ·       U.S. employment in the textile supply chain was 565,000 in 2016. 

·       The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase since 2009. 

·       U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016. 

·       Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.

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CONTACT:  Lloyd Wood
(202) 822-8028
lwood@ncto.org

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NCTO Welcomes Trump Decision to Renegotiate NAFTA

WASHINGTON, DC – Today, U.S. Trade Representative Robert Lighthizer formally notified Congress that President Trump intends to renegotiate the North American Free Trade Agreement (NAFTA), a trilateral free trade agreement between the United States, Canada, and Mexico.

“The U.S. textile industry welcomes President Trump’s decision to renegotiate NAFTA,” said National Council of Textile Organizations (NCTO) President and CEO Auggie Tantillo.

“It is in America’s national interest to modernize the agreement,” Tantillo continued.

“Let me be clear: NAFTA is vital to the prosperity of the U.S. textile industry, and NCTO steadfastly supports continuing the agreement.  With that said, NAFTA can be improved to incentivize more textile and apparel jobs and production in the United States, Canada, and Mexico,” Tantillo added.

“Eliminating loopholes that shift production to third-party countries like China and devoting more customs enforcement resources to stop illegal third-country transshipments are two changes that would make the agreement better,” Tantillo said.

“We look forward to working with our industry partners throughout the NAFTA region to improve this agreement for all,” Tantillo finished.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

  • U.S. employment in the textile supply chain was 565,000 in 2016.
  • The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase since 2009.
  • U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016.
  • Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.

NAFTA Textile and Apparel Trade Flows

U.S. Textile and Apparel Exports – In Thousand Dollars
2014 2015 2016
To Mexico $6,208,045 $6,510,071 $5,936,873
To Canada $5,595,784 $5,246,776 $5,160,422
NAFTA Total $11,803,828 $11,756,847 $11,097,296

 


U.S. Imports of Textiles and Apparel – In Thousand Dollars
2014 2015 2016
From Mexico $5,875,311 $5,776,274 $5,656,997
From Canada $2,103,254 $2,041,965 $1,991,173
NAFTA Total $7,978,565 $7,818,239 $7,648,170

 

U.S. Textiles and Apparel Trade Balance – In Thousand Dollars
2014 2015 2016
With Mexico $332,734 $733,797 $279,876
With Canada $3,492,530 $3,204,811 $3,169,249
NAFTA Total $3,825,263 $3,938,608 $3,449,126

Source for data in table: U.S. Department of Commerce, Office of Textiles and Apparel

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CONTACT:  Lloyd Wood
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lwood@ncto.org

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NCTO Praises Senate Confirmation of Lighthizer to USTR Post

WASHINGTON, DC – The United States Senate confirmed Robert Lighthizer as United States Trade Representative (USTR) by an 82-14 vote on May 11, 2017.

“In my estimation, Ambassador Lighthizer is likely the most qualified individual ever to be confirmed to this important post,” said National Council of Textile Organizations (NCTO) President and CEO Auggie Tantillo as he noted Lighthizer’s previous service as Staff Director of the Senate Finance committee and as Deputy USTR, as well as his distinguished legal career specializing in international trade law.

“Between Ambassador Lighthizer and U.S. Department of Commerce Secretary Wilbur Ross, President Trump has assembled a first-rate team to handle trade and manufacturing matters,” Tantillo continued.

“The U.S. textile industry is excited to work with Secretary Ross and Ambassador Lighthizer to fashion policy that will lead to more U.S. textile production, investment and jobs,” Tantillo added.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers. 

·       U.S. employment in the textile supply chain was 565,000 in 2016. 

·       The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase since 2009. 

·       U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016. 

·       Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.

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CONTACT:  Lloyd Wood
(202) 822-8028
lwood@ncto.org

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Textile Industry Comments on Causes of Significant U.S. Trade Deficits; Urges Trump Administration to Take Remedial Action to Boost...

WASHINGTON, DC – Four U.S. textile trade associations – the National Council of Textile Organizations (NCTO), American Fiber Manufacturers Association (AFMA), Narrow Fabrics Institute (NFI), and United States Industrial Fabrics Institute (USIFI) – outlined causes of the $95 billion U.S. trade deficit in textiles and apparel and suggested remedial actions for the Trump administration to boost U.S. production and jobs in joint comments submitted to the U.S. Department of Commerce (DOC) on May 10, 2017.

In addition, NCTO’s Upholstery Fabrics Committee (UFC) submitted a separate statement detailing the reasons for the U.S. trade deficit in upholstery fabrics, focusing on the imbalance with China in particular.

“A trade deficit study like this should have been initiated years ago,” said NCTO President and CEO Auggie Tantillo as he praised President Trump for ordering the review.

“If America is to reverse its trade-related red ink and create more jobs, policymakers must have a better understanding of the policies and economic factors responsible for driving production offshore,” Tantillo added.

The joint NCTO, AFMA, NFI, and USIFI comments as well as the separate UFC statement were submitted in response a notice for public comments issued by the DOC and the Office of the U.S. Trade Representative (USTR) pursuant to Executive Order 13786 signed by President Trump on March 31, 2017.  The order directed those agencies to prepare an omnibus report on significant trade deficits.  The Federal Register notice for public comments is at 82 FR 16721 and is dated April 5, 2017 (DOC 2017-0003). 

NCTO, AFMA, NFI, and USIFI also were signatories to comments submitted by the Manufacturers for Trade Enforcement (MTE) to DOC urging the United States to continue to treat the People’s Republic of China (PRC) as a nonmarket economy (NME) country under U.S. antidumping and countervailing duty law. 

“China’s widespread use of nonmarket economic activities is one of the biggest drivers of America’s trade deficit,” Tantillo said.

DOC’s notice for the NME comments (ITA-2017-0002) was issued as part of the its less-than-fair-value investigation of certain aluminum foil imports from the PRC.

For more information about the U.S. textile industry, please consult the 2017 State of the U.S. Textile Industry address delivered by 2016 NCTO Chairman Robert “Rob” H. Chapman, III at NCTO’s 14th Annual Meeting on March 23, 2017 at the Capital Hilton in Washington, DC.  Chapman’s speech outlined (1) U.S. textile supply chain economic, employment and trade data as well as (2) the 2017 policy priorities of NCTO members. 

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers. 

·       U.S. employment in the textile supply chain was 565,000 in 2016. 

·       The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a nearly 11% increase since 2009. 

·       U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016. 

·       Capital expenditures for textile and apparel production totaled $2 billion in 2015, the last year for which data is available.

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CONTACT:  Lloyd Wood
(202) 822-8028
lwood@ncto.org

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Denim One of Hottest Items in Global Wardrobe Fashion

WASHINGTON, DC – With fall fashion shows in New York and Paris in the rearview mirror, denim has emerged has one of the hottest wardrobe items in the fashion industry, both on the runways and sidewalks.

Elle magazine reports that designer denim was among the “best looks” of the 2016 Paris Fashion Week, which ended Oct. 5. Meanwhile, Racked.com, an online source for style and shopping, cited denim as the reason “the New York Fashion Week crowd was noticeably casual” at this month’s show.

“Denim is a wardrobe staple that never goes out of style, and as we saw during fall shows in the fashion capitals of the world, denim is changing the way we dress in the new season like no other,” said Dale McCollum, vice president for denim merchandising for Mount Vernon Mills, a manufacturer of denim products. “Denim is a timeless classic and the fall and spring seasons are peak production times for global denim manufacturers like Mount Vernon Mills.”

McCollum added that denim’s popularity in the U.S. can be traced to its iconic status alongside baseball, apple pie and other iconic brands. “Denim is ingrained in our culture and is a fabric that transcends time,” he said. “It subtly reminds us of the past, makes us feel good in the present and eases our anxiety concerning the future.”

Mount Vernon Mills’ Apparel Fabrics group operates one of the largest denim manufacturing facilities in the world and produces a wide variety of denim including washed, over-dyed and stretch fabrics. The company also is on the forefront of the innovation behind a fabric constantly evolving to meet customer styles and tastes.

“Advances in technology over the years have led to denim that is more wearable and stretchable, which results in more fashion options,” McCollum said. “Our business is focused on sharing our passion and inspiring how to make denim your own. Denim is always in style because it never goes out of style.”

Cone Denim, a leading supplier of denim fabrics to top denim apparel brands, has established a brand focused on core principles – innovation, art and American heritage – that drive denim fashion styles.

“The dichotomy of old alongside new is something distinctive to Cone Denim,” said Kara Nicholas, vice president of product design and marketing for Cone Denim. “Our 110-year-old White Oak plant runs a 1940s loom next to the modern looms, the next generation works alongside operators with 60 years of experience, and we still use a long-chain dyeing process developed by our employees in the 1920s that has become the gold standard in indigo dyeing. Thanks to our rich history, we are able to provide people with iconic denim.”

Denim, she added, also excites, inspires and gives wearers a feeling that you can’t quite pinpoint.

“Denim is something we talk about as being extremely personal. It’s unlike any other fabric, because it can adopt the characteristics of the person wearing the jeans,” Nicholas said. “People create a bond with their favorite pair of jeans. More than any other item in a closet, jeans tell your story.”

Denim enthusiasts worldwide recognize Cone Denim for its place in history as the creator of long-chain indigo dyeing, denim sanforization and Cone’s Deeptone Denim, introduced in 1936. Newer innovations in performance and sustainable denims continue under Cone’s R&D incubator, Cone® 3D. In addition, the White Oak mill is recognized for its re-creation of vintage selvage denim. Cone was also recently cited by Esquire magazine for its role in updating the iconic Levi 501 jeans to include stretch denim.

“It’s about connecting with people and meeting them wherever their love of denim lies – vintage or contemporary, light or dark, worn or like new,” Nicholas said. “No other fabric moves so easily from the New York City runway to rugged cowboy to workwear. Other fabrics don’t speak to people like denim.”

Denim’s importance in the fashion industry comes as the global popularity of the fabric continues its upward trajectory.  According to the Statistic Brain Research Group, the global denim market is a $56 billion industry, while in the United States alone, it is a $14 billion industry.

“As these numbers illustrate, denim is known the world over and they also speak to the fabric’s rightful place in the fashion industry,” said Augustine Tantillo, President and CEO of the National Council of Textile Organizations (NCTO), a trade association representing textile makers in the United States.

  • To learn more about the U.S. textile industry and its innovative, world-class products, visit www.wemakeamzing.org.
  • There is a one minute American Textiles: We Make Amazing video about the industry.
  • Follow U.S. textile industry news and other happenings on Twitter @NCTO and by checking out the hashtag #WeMakeAmazing.

This release was posted on PR Web earlier today.
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CONTACT:  Lloyd Wood
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lwood@ncto.org

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National Manufacturing Day Alert: U.S. Textile Industry Reinvents Itself

To celebrate National Manufacturing Day 2016, the National Council of Textile Organizations is publishing a list of “Did You Know” items to let Americans know about the industry’s resurgence.

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NCTO: China Has Not Earned Market Economy Status

WASHINGTON, DC – The National Council of Textile Organizations (NCTO) continued its call for the Obama administration to reject China’s request that it should be designated a market economy under the World Trade Organization (WTO).  China is seeking a formal designation as a market economy on December 11, 2016, the 15th anniversary of the country’s accession to the WTO.  Currently, the U.S. Commerce Department treats China as a non-market economy when calculating anti-dumping margins and other trade remedies.

“Treating China as a market economy would defy logic,” said NCTO President & CEO Augustine Tantillo.

“China’s chronic misallocation of investment to expand its state-owned enterprises in the textile supply chain and in other industrial sectors where there is an excess of global capacity invariably leads to Chinese dumping and other non-free-market economic practices,” Tantillo continued.

“Those actions hurt the global economy and should not be rewarded by the United States,” Tantillo added.

Tantillo also noted NCTO’s support for recent statements by the Obama administration at the WTO expressing the fact that China’s market reforms since joining the WTO have fallen short of expectations.

NCTO is a member of the Manufacturers for Trade Enforcement (MTE) coalition.

On July 11 and 12, MTE held briefings on Capitol Hill to explain why China does not meet the standard of a market economy.  The PowerPoint accompanying those events may be found here.

To learn more about why China should not be granted market economy status, visit MTE’s website at www.tradeenforcement.org.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.  Visit our website at www.ncto.org.

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CONTACT:  Lloyd Wood
(202) 822-8028
lwood@ncto.org

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