THE MINISTER OF FINANCE
REQUEST FOR TARIFF RELIEF BY
VENTURE III INDUSTRIES INC.
CERTAIN WOVEN FABRICS
OF SYNTHETIC FILAMENT YARNS
JANUARY 31, 1997
TABLE OF CONTENTS
Tribunal Members: Anthony T. Eyton, Presiding Member
Desmond Hallissey, Member
Lyle M. Russell, Member
Research Director: Réal Roy
Research Manager: Anis Mahli
Counsel for the Tribunal: Heather A. Grant
Distribution Officer: Claudette Friesen
Address all communications to:
Canadian International Trade Tribunal
Standard Life Centre
333 Laurier Avenue West
On July 14, 1994, the Canadian International Trade Tribunal (the
Tribunal) received terms of reference  from the Minister of Finance (the Minister)
pursuant to section 19 of the Canadian International Trade
Tribunal Act. 
The Minister directed the Tribunal to investigate requests from
domestic producers for tariff relief on imported textile inputs for
use in their manufacturing operations and to make recommendations
in respect of those requests to the Minister.
Pursuant to the Minister’s reference, on April 11, 1996, the
Tribunal received a request from Venture III Industries Inc.
(Venture) of Toronto, Ontario, for the indeterminate removal of the
customs duty on importations of certain woven fabrics of synthetic
filament yarns for use in the manufacture of women’s blouses (the
On August 27, 1996, the Tribunal, being satisfied that the
request was properly documented, issued a notice of commencement of
investigation, which was distributed and published in the September
7, 1996, edition of the Canada Gazette, Part I. 
As part of the investigation, the Tribunal’s research staff sent
a questionnaire to two potential producers of identical or
substitutable fabrics. A questionnaire was also sent to firms
identified as potential importers and users of the subject fabrics.
A letter was sent to the Department of National Revenue (Revenue
Canada) requesting information on the tariff classification of the
subject fabrics, and samples were provided for laboratory analysis.
Letters were also sent to a number of other government departments
for information and advice.
A staff investigation report, summarizing the information
received from these government departments, Venture and firms that
responded to the Tribunal’s questionnaires, was provided to
interested parties that had filed notices of appearance for this
investigation. The parties to the investigation are Venture, P.
Singh Impex Inc., Doubletex and the Canadian Textiles Institute
A public hearing was not held for this investigation.
In the notice of commencement of investigation, the subject
fabrics were defined as woven crepe fabrics, namely, faille,
georgette and crepe de Chine, solely of polyesters, of single yarns
measuring not less than 50 decitex but not more than 180 decitex,
weighing not less than 90 g/m2 but not more than 120
g/m2, for use in the manufacture of apparel.
Revenue Canada analyzed the samples of the subject fabrics
provided by Venture and concluded that, on the basis of the
laboratory analysis, they are woven fabrics made from high-twist
polyester yarns (over 800 twists per metre in the warp or the weft)
and that, for customs purposes, the subject fabrics are classified
under tariff item No. 5407.61.90 of Schedule I to the Customs
During the course of the investigation, following a request by
Consoltex Inc. (Consoltex) to include in the product definition the
yarn twist factor and a narrower end use, which changes were agreed
to by Venture, it was indicated in the staff investigation report
that, “[i]n making recommendation[s] to the Minister of Finance,
the Tribunal will be examining the evidence and submissions
relating to the following product description: Woven fabrics,
namely, faille, georgette and crepe de Chine made entirely of
single, non-textured high-twist yarns (in excess of 1,000 turns per
meter), measuring not less than 50 decitex but not more than 180
decitex, weighing not less than 90 g/m2 but not more
than 120 g/m2, for use in the manufacture of ladies’
blouses and matching skirts.”
Under tariff item No. 5407.61.90, the subject fabrics were
dutiable in 1996 at 19.0 percent ad valorem under the MFN
tariff and the GPT; at 20.2 percent ad valorem under the
BPT; at 5.0 percent ad valorem under the US tariff; and at
17.5 percent ad valorem under the Mexico tariff.
In 1995, total imports of woven fabrics containing 85 percent or
more by weight of non-textured polyester filaments, which are
classified under tariff item No. 5407.61.90, were reported by
Statistics Canada to have amounted to 2.9 million kg, with an
estimated value of about $41 million. Because the major proportion
of this volume was imported for the manufacture of apparel other
than women’s blouses and matching skirts, Venture’s share of this
total volume was negligible. The majority of these imports
originated in the Republic of Korea, Japan, Indonesia and the
Venture is one of five major women’s blouse manufacturers in
Canada.  In
addition to manufacturing women’s blouses at its plant located in
Toronto, Venture manufactures other women’s soft sportswear (pants,
skirts and jackets). As well, Venture imports silk blouses from the
Venture claims that tariff relief for an indeterminate period
would increase production as a result of lower material costs,
create additional jobs and allow it to pass on some of the cost
savings to the consumer.
Venture submits that neither Consoltex nor Doubletex can supply
a fabric identical to or substitutable for the subject fabrics and
that, in June 1995, Consoltex indicated that it could not supply
Venture with any 100 percent non-textured polyester fabrics for use
in the manufacture of women’s blouses. 
Venture further submits that it heard from Doubletex, for the
first time, only after the Tribunal had commenced its
investigation. Subsequent to the commencement of the investigation,
the President of Doubletex contacted Venture to explore the
prospects of establishing a business relationship between their
companies. Venture submits that, because Doubletex did not produce
printed fabrics, Doubletex was willing not to oppose the request
for tariff relief on printed fabrics and offered Venture the option
of either buying fabrics that had been imported, dyed and finished
by Doubletex or having Doubletex do custom dyeing and finishing of
greige fabrics imported by Venture. According to Venture, the offer
was turned down because: (1) Doubletex’s fabrics did not drape nor
were they suitable for blouses; and (2) as a small manufacturer,
Venture did not have the expertise and time to get involved in the
business of importing and finishing greige fabrics.
In response to submissions by the parties, Venture agrees with
the CTI and Doubletex that the product definition as stated in the
notice of commencement of investigation should be amended to
include the twist factor of the yarn.
With respect to the end-use restriction suggested by the CTI
(i.e. that the tariff relief be limited to fabrics for use in the
manufacture of women’s blouses or blouse and skirt ensembles),
Venture objects to the term “ensemble  ” because, as it is presently defined in Note 3
(b) to Chapter 62 of the Customs Tariff, it appears to be
too restrictive. Instead, Venture suggests the use of the phrase
“coordinated skirt,” which, it argues, is adequately defined in the
Blouses and Shirts Remission Order. 
Venture states that Doubletex does not produce printed fabrics
and does not sell, to Canadian blouse manufacturers, fabrics which
are identical to or substitutable for the subject fabrics because,
if it did, it would have provided production and sales data as
required in the producers’ questionnaire.
Venture is also opposed to the suggestion by Doubletex that
there be a price point restriction of $5/m2 or more
introduced into the end-use definition, as there is no basis to
support such a measure.
With respect to Doubletex’s request to include greige fabrics
within the scope of the investigation, although Venture does not
specifically object to this addition, it submits that such a
request would be best served by a separate request for tariff
relief to the Tribunal.
Finally, Venture submits that it is still willing to consider,
for sampling, any fabric that Doubletex produces.
JMS International Fashions, Como Diffusion Inc. and Chagall, of
Montréal, and Elite Blouse, of Toronto, are the other major women’s
blouse manufacturers in Canada.
These importers/users are unanimous in their support of
Venture’s request for tariff relief because, they argue, the
domestic fabric producers do not manufacture identical or
substitutable fabrics in the light weights that they require in the
manufacture of blouses. They contend that the tariff relief would
help them to offer prices that would attract domestic consumers
back to Canadian-made apparel.
The CTI submits that Consoltex does not oppose Venture’s request
for tariff relief, provided the product description is modified to
indicate that the high-twist yarns are used either in the warp or
in the weft and to specify the number of turns per metre (i.e. in
excess of 1,250 turns per metre). In addition, the CTI would prefer
that the end use be limited to “the manufacture of ladies’ blouses
or blouse and skirt ensembles” or, more narrowly, to women’s
Doubletex claims that it produces identical or substitutable
fabrics which have the main defining characteristics of the subject
fabrics (easy care, easy wear and easy styling), as described in
Venture’s request. Doubletex submits that, because Venture claims
that the subject fabrics are used to manufacture higher-end
blouses, a price point restriction of $5/m2 or more
should be inserted into the end-use definition. With respect to the
twist factor, Doubletex suggests that the turns per metre of the
yarn should be specified in the product definition.
Doubletex questions the incompatibility between the description
of the end use in the notice of commencement of investigation where
“apparel” was used and that in the staff investigation report where
“ladies’ blouses and matching skirts” was used. Doubletex suggests
that the end use should be confined to the manufacture of “ladies’
Doubletex further submits that it does not oppose the removal of
duty on printed fabrics meeting the specified definition, but
opposes the removal of duty on dyed fabrics.
In conclusion, Doubletex submits that the Tribunal should
recommend tariff relief on printed fabrics, on identical bleached,
unbleached or prepared-for-dyeing fabrics and on woven fabrics
which command a value of $5/m2 or more for use in the
manufacture of women’s blouses only.
The terms of reference direct the Tribunal to evaluate the
economic impact that tariff reduction, or removal, would have on
domestic fabric producers and downstream apparel manufacturers.
Consequently, the Tribunal’s decision to recommend tariff relief is
based on the extent to which it considers that such tariff relief
would provide net economic gains for Canada.
In this case, during the early phase of the investigation, the
Tribunal’s task was simplified by an agreement between Venture and
the CTI on the description of the subject fabrics.
Doubletex was the only domestic textile producer that opposed
the request for tariff relief on non-printed finished fabrics.
However, it has not provided any information on its production and
sales to blouse manufacturers of allegedly identical or
substitutable fabrics, and the Tribunal is unable to conclude that
it has demonstrated an ability to serve this manufacturing sector
with fabrics that are identical to or substitutable for the subject
Therefore, the Tribunal gives little weight to Doubletex’s
opposition to Venture’s request because Doubletex has not
demonstrated that it is, or will become, an active supplier of
identical or substitutable fabrics to the end-use market specified
in the request for tariff relief. The Tribunal also notes that
Doubletex did not provide any evidence to quantify the extent of
its alleged costs or losses should tariff relief be granted.
The Tribunal notes that Consoltex was the only domestic producer
of an allegedly identical or substitutable fabric to provide
comments on Venture’s request. Consoltex does not oppose Venture’s
request, as long as the twist factor of the yarn and a narrower
definition of the end use is specified in the Tribunal’s
recommendation for tariff relief.
The CTI proposed that the term “matching skirt” be replaced by
“skirt ensemble,” whereas Venture suggested the use of the term
“coordinated skirt,” based on the definition of “coordinated
apparel” set out in the Blouses and Shirts Remission Order.
Having considered the definitions of the two terms, the Tribunal
considers the phrase “ladies’ blouses and coordinated skirts” to be
the most appropriate end-use description of the subject fabrics to
provide the scope of tariff relief desired by Venture, such that
the blouses and skirts are linked by colour, shape or detail “with
the express purpose of being sold and worn together.”
In assessing the net economic gains for Canada, the Tribunal
notes that granting tariff relief would provide the five blouse
manufacturers with significant benefits as a result of lower costs
of production. The projected duty savings in 1997 were estimated to
be in excess of $250,000. The duty savings should assist the blouse
manufacturers in offering prices that would attract domestic
consumers back to Canadian-made apparel, help them develop an
export market in the United States and ensure their long-term
Because the removal of the tariff provides benefits to Venture
and other blouse manufacturers without any costs to the domestic
industry, the Tribunal believes that tariff relief would provide
net economic gains for Canada. Accordingly, the Tribunal is of the
view that tariff relief should be granted.
Doubletex indicates that it would not oppose the recommendation
for tariff relief, provided the Tribunal imposed a value of
$5/m2 or more on the subject fabrics and extended the
recommendation to include identical bleached, unbleached or
In assessing the economic impact of granting tariff relief, the
Tribunal normally compares the domestic prices at which the
allegedly identical or substitutable fabrics made by national
producers are sold with the landed, duty-paid value of the imported
fabrics under consideration. However, as the Tribunal has not found
that the domestic industry produces identical or substitutable
fabrics, it does not consider it appropriate to impose a price
point restriction on the subject fabrics.
With respect to the inclusion of greige fabrics in its
recommendation for tariff relief, the Tribunal considers that these
fabrics were fully covered in a previous report. 
In light of the above information and evidence before the
Tribunal in this matter, the Tribunal hereby recommends to the
Minister that the customs duty on importations, from all countries,
of woven fabrics, namely, faille, georgette and crepe de Chine,
made solely of single, non-textured polyester yarns, with a twist
exceeding 1,250 turns per metre in either the warp or the weft,
measuring not less than 50 decitex but not more than 180 decitex,
weighing not less than 90 g/m2 but not more than 120
g/m2 of tariff item No. 5407.61.90, for use in the
manufacture of women’s blouses and coordinated skirts, be removed
for an indeterminate period.
The Tribunal further recommends that the tariff relief be
effective as of the date of this report.
Anthony T. Eyton
Anthony T. Eyton
Lyle M. Russell
Lyle M. Russell
1. On March 20 and
July 24, 1996, the Minister revised the terms of reference.
2. R.S.C. 1985, c. 47
3. Vol. 130, No. 36 at
4. R.S.C. 1985, c. 41
5. The remaining four
are: JMS International Fashions, Como Diffusion Inc. and Chagall,
of Montréal, Quebec, and Elite Blouse, of Toronto.
6. In its response to
the producers’ questionnaire, Consoltex provided data on sales from
domestic production for domestic consumption of fabrics woven from
textured polyester yarns, with a minimum weight of 130 g/m 2 ,
whereas the subject fabrics are made of high-twist, non-textured
polyester yarns whose maximum weight is 120 g/m 2 .
7. The term "ensemble"
is defined in Note 3 (b) to Chapter 62 of Schedule I to the Customs
Tariff as follows: The term "ensemble" means a set of garments
(other than suits and articles of heading No. 62.07 or 62.08)
composed of several pieces made up in identical fabric, put up for
retail sale, and comprising: - one garment designed to cover the
upper part of the body, with the exception of waistcoats which may
also form a second upper garment, and - one or two different
garments, designed to cover the lower part of the body and
consisting of trousers, bib and brace overalls, breeches, shorts
(other than swimwear), a skirt or a divided skirt. All of the
components of an ensemble must be of the same fabric construction,
style, colour and composition; they also must be of corresponding
or compatible size. The term "ensemble" does not apply to track
suits or ski suits, of heading No. 62.11.
8. SOR/88-332, June
23, 1988, Canada Gazette Part II, Vol. 122, No. 14 at 2855, in
which the term "coordinated apparel" is defined as follows:
"'coordinated apparel' means a woman's or girl's jacket that is
coordinated with a skirt or pants or a coordinated two-piece dress,
linked by colour, shape or detail with the express purpose of being
sold and worn together, but does not include such apparel as an
athletic suit, outerwear apparel, coordinated denim apparel and
coordinated apparel made on order for a department of the
Government of Canada."
9. See Report to the
Minister of Finance: Requests for Tariff Relief by Doubletex
Regarding Unbleached or Bleached Woven Fabrics , Request Nos.
TR-95-057 and TR-95-058, October 24, 1996.
[Table of Contents
Initial publication: January 31, 1997