Conclusion. --We believe the foregoing clearly reveals the superficiality of the majority's conclusion that all these types of footwear are directly competitive with the canvas footwear produced at Woonsocket. Indeed, we consider that this position strains one's sense of logic, and perverts the law itself. To be regarded as directly competitive, types of footwear which differ substantially from one another in material, construction, and styling ought to be, substantially equivalent for commercial purposes. In a practical or realistic sense, this means--with respect to types of footwear such as those under consideration which the consumer purchases primarily on the basis of price and his intended use--that such types of footwear, to be regarded as directly competitive, ought to be interchangeable throughout the range of their uses. Such is not the case with the types of footwear under consideration. Although all such types are worn for some of the same purposes, the canvas footwear is worn extensively for a variety of athletic and physical activities for which the leather sandals, vinyl shoes, zories, etc., are not particularly suitable, and, therefore, are seldom worn. In view of the major differences in use, the latter types of footwear cannot be regarded as directly competitive with canvas footwear. 1/ Lack of Increasing Imports Looking, then, at imports of canvas footwear only, we have concluded that entries of such footwear are not increasing. The only U.S. imports of such U.S. trade-agreement concession on canvas footwear was made in 1955. Annual U.S. imports of the product increased in the late 1950's; they peaked in 1962, and then declined substantially. footwear in 1969 were about a sixth smaller than entries in the 2 preceding years and only a little more than half those in 1962. Imports supplied about 15 percent of U.S. consumption of canvas footwear in each of the years 1967-69, but they had supplied about 25 percent in 1962. Because of the decline in imports over much of the past decade, we have found that canvas footwear is not being imported in increased quantities. Of special interest--because of the principal reliance by the majority on imports under item 700.55 to sustain their affirmative determination--is the statement in the Explanatory Notes for Schedule 7, Part 1, of the Tariff Classification Study (1960) wherein the Commission stated (at p. 24) as follows: Item 700.55 is a "key" provision in that it bears the This statement reflected also the views of domestic producers and Factors Affecting Imports During the past two decades, U.S. imports of canvas footwear have been influenced by a variety of commercial practices and governmental rulings. As noted above, the single U.S. trade-agreement concession on this product was placed in effect some 15 years ago; the U.S. rate of duty was reduced in 1955 from 35 percent to 20 percent ad valorem, subject to the American selling price provisions (ASP). Both before and after the concession, various innovations were made in the construction of imported canvas footwear to avoid assessment of the duty on the ASP valuation. In the 1950's, pieces of high-value leather were used in the soles and uppers to "avoid" the substantially higher duties imposed under the ASP provision. Subsequently, various plastics were used in the soles or uppers, iron powder in the midsole, and leather in the outersole to avoid the ASP valuation. Many of these practices are now terminated because of the effect of legislation or customs rulings, but they had a great influence on the volume of imports of canvas footwear in most of the years since the tradeagreement concession was granted. In more recent years, a change in an administrative practice by the Bureau of Customs has had a marked effect on the burden of the U.S. duty on canvas footwear. Under guidelines adopted in February like or similar domestic article closest in price to that of the imported article, whereas previously it had been made at the value of the highest priced like or similar domestic article. 1/ Based on trade data of 1965, the duties assessed on the basis of the old guidelines would have averaged about 95 percent of the export values, while those assessed on the basis of the new guidelines, 60 percent. Hence, as a result of administrative governmental action (and not a trade-agreement concession), the burden of the U.S. duty on canvas footwear was substantially reduced. The effect of the modification, of course, came during a period when imports of canvas footwear were not increasing--largely because of the competition afforded by machinemade domestic canvas footwear (see following section). However, even if we had been able to find in this case that imports of canvas footwear were increasing, we would necessarily have concluded, in the light of the effects of the avoidance practices and administrative rulings, that the increase was not in major part the result of the trade-agreement concession. Reasons for the Closing of the Woonsocket Plant Uniroyal, Inc., is in the process of shifting its production of canvas footwear from old plants located in northern States --Rhode 1 Appraisement of canvas footwear had been withheld since February 1963 while the Bureau of Customs considered the possible change. Island, Connecticut, and Indiana--to new plants in Georgia. plant was opened in Georgia in 1964 and a second, in 1968. Another plant had been opened earlier in Puerto Rico. In 1969 nearly twofifths of Uniroyal's output of canvas footwear was in Georgia and Puerto Rico, where virtually none had been in 1962. The company appears to have made its decision to undertake this major relocation of its production facilities in response to several factors--one of which, but not the major factor, was the competition from imported footwear. During the 1960's, in response to a strong demand in the United States for low-priced canvas footwear, the U.S. industry widely instituted new production methods. In the traditional method, the shoe components of canvas footwear were assembled largely by hand, and the assembled shoe then vulcanized. In the newer methods (injection- and compression-molding), the upper is still assembled largely by hand, but the sole is formed and attached by machine--thus obviating the need for much of the hand assembly, as well as the vulcanizing process. Footwear made by the newer methods accounted for about half of the U.S. output in 1969, whereas it had been only a small share of the total in 1960. Injection-molded shoes are generally retailed for less than $2 per pair, and compression-molded shoes, at about $3 per pair; canvas shoes made by the traditional methods, generally regarded as being of higher quality, are largely retailed at $3 to $7 per pair, |