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Is a Halloween costume a piece of apparel or a toy? The U.S. Court of International Trade is being asked to decide. The court's decision will affect millions of dollars a year worth of goods, and will have an impact on importers, manufacturers and retailers. The costume, a flimsy witch's outfit worn by children (and sometimes adults) at Halloween, is the subject of a test case in a protracted and widely watched dispute between a U.S. costume manufacturer and an importer. The manufacturer, Rubie's Costume Co., Queens, N.Y., says the costume is made of polyester fabric and therefore must be classified as apparel. The importer, Franco American Novelty Co., Glendale, N.Y., says the item should be classified as a non-durable "festive article", and exempted from apparel import limitations and duties. Though the case involves only the culture of the Halloween costume, the Court's decision could affect numerous other makers and importers of apparel and costumes.
Halloween, or Allhallows Eve, is a festival celebrated on 31 October, the evening prior to the Christian Feast of All Saints (All Saints' Day). Halloween is the name for the eve of Samhain, a celebration marking the beginning of winter as well as the first day of the New Year within the ancient Celtic culture (see The Celts) of the British Isles. The time of Samhain consisted of the eve of the feast and the day itself (31 October and 1 November ). This event was a crucial seam in the social and religious fabric of the Celtic year, and the eve of Samhain set the tone for the annual celebration as a threatening, fantastic, mysterious rite of passage to a new year.
The religious belief of the Celts emphasized pastoral deities, and Celtic festivals stressed seasonal transitions. Beltane, the beginning of summer, was celebrated at the end of April and the beginning of May. Samhain signaled the commencement of winter and, together with Beltane, divided the year into cold and hot seasons. Samhain marked the end of preparations for winter, when flocks and herds had been secured and harvested crops had been stored.
The eve of this festival brought with it another kind of harvest. On this
occasion, it was believed that a gathering of supernatural forces occured
as during no other period of the year. The eve and day of Samhain were characterized
as a time when the barriers between the human and supernatural worlds were
broken.
Otherworldly entities, such as the souls of the dead, were able to
visit earthly inhabitants, and humans could take the opportunity to penetrate
the domains of the gods and supernatural creatures. Fiery tributes and sacrifices
of animals, crops, and possibly human beings were made to appease supernatural
powers who controlled the fertility of the land. Not a festival honoring any
particular Celtic deity, Samhain acknowledged the entire spectrum of nonhuman
forces that roamed the earth during that period.
Given the upheaval of normal human activities and expectations on the eve and day of Samhain, it was also thought to be an especially propitious time for ascertaining information about the future course of one's life. Various methods of divination were used by individuals attempting to discover their fortunes, good or ill, and to foretell events such as marriage, sickness, or death.
Samhain remained a popular festival among the Celtic people throughout the christianization of Great Britain. The British church attempted to divert this interest in pagan customs by adding a Christian celebration to the calendar on the same date as Samhain. The Christian festival, the Feast of All Saints, commemorates the known and unknown saints of the Christian religion just as Samhain had acknowledged and paid tribute to the Celtic deities. The eve of the Celtic festival was also christianized, becoming the Vigil of All Saints or Allhallows Eve (with special offices existing in both the Anglican and Roman churches). The medieval British commemoration of All Saints' Day may have prompted the universal celebration of this feast throughout the Christian church.
The customs of Samhain survived independently of the Christian holy day. Gradually, the eve of Allhallows (Halloween) lost much of its Celtic religious significance for the masses, and it became a secular observance, although many traditionally Celtic ideas continued to be associated with the evening. Divination activities remained a popular practice. Adults, dressed in fantastic disguises and masks, imitated supernatural beings and visited homes where occupants would offer tributes of food and drink to them. A fear of nocturnal creatures, such as bats and owls, persisted, since these animals were believed to communicate with the spirits of the dead. See Guambat case and Timowl case .
Halloween was celebrated only in the Celtic areas of Great Britain: Ireland, Scotland, Wales, and northern rural England. In non-Celtic England, many of the customs of Halloween were assimilated into a commemorative festival that arose in the seventeenth century as the celebration of Guy Fawkes Day (5 November). English Protestant settlers in the New World did not bring the custom of Halloween with them. Irish and Scottish immigrants introduced scattered Allhallows Eve observances to America, but it was only in the years after the massive immigration of the Irish to the United States during the potato famine (1845-1846) that Halloween became a national event (see Potato case ).
Modern Halloween activities have centered on mischief making and masquerading
in costumes, often resembling otherworldly characters. Folk customs, now treated
as games (such as bobbing for apples), have continued from the various divination
practices of the ancient celebrants of this occasion. Supernatural figures
(such as the ghost, the witch, the vampire, the devil) lay a key role in supplying
an aura of the myserious to the evening, whether or not they originally had
an association with the festival. Children are particularly susceptible to
the imagery of Halloween, as can be seen in their fascination with the demonic
likeness of a carved and illuminated pumpkin, known as the jack-o'-lantern.
In recent times, children have taken up the practice of dressing in Halloween
cosumes and visiting homes in search of edible and monetary treats, lightly
threatening to play a trick on the owner if a treat is not produced. Some kids would collect money for UNESCO, thus giving the holiday a unique benevolent flavor. There
also has been renewed interest in Halloween as a time when adults can also
cross cultural boundaries and shed their identities by indulging in an uninhibited
evening of frivolty. Thus, the basic Celtic quality of the festival as an
evening of annual escape from normal realities and expectations has remained
into the twentieth century.
Halloween - 2.5 BILLION DOLLAR industry! The twentieth century, however, has turned Halloween into a huge industry. American Express Travel Related Services Co. says shoppers plan to spend an average of $81 on everything from candy to costumes in order to celebrate Halloween this year(1998). Last year, American consumers spent about $950 million just on candy for the All Hallows Eve party.
Already a $2.5 billion industry, spending in 1998 is likely to rise above past years, as 85 percent of those polled say they will spend at least the same amount or more on Halloween-related purchases this year over last. Whether hosting a costume party or dressing up to go trick-or-treating with the kids, adults say Halloween is growing in popularity. Activities have increased so much in recent years that 45 percent of the 1,000 consumer questioned report celebrating the holiday on a level that is at least equal to or greater than New Year's Eve.
In fact, American Express said its poll showed 48 percent of those questioned feel that Halloween is becoming as much a holiday for adults as for kids. Where spending is concerned, of those adults who plan to spend more money on Halloween this year, 59 percent will spend up to 25 percent more, while 29 percent will spend up to 50 percent more on such items as costumes, candy, decorations and entertainment.
``The growing popularity of Halloween among adults has created a new opportunity for retailers who are capitalizing on a holiday once celebrated primarily by children,'' said Emelie Smith, vice president of Retail Industries Marketing, American Express Travel Related Services Company Inc. ``This growth may be attributed to the recent surge in retail, restaurant and entertainment industry Halloween tie-ins and promotions targeting adults,'' Smith added.
Halloween revelers will be dividing their budgets among a variety of purchases this year, including candy, costumes and decorations. But, American Express said candy is still the number one item on the shopping list, with 26 percent of those polled using their total budget toward the purchase of sweet treats.
| 23% of their budget on costumes |
| 17% of their budget on pumpkins |
| 15% of their budget on in-home entertaining |
| 10% of their budget on spooky decorations |
| 9% of their budget on attending spooky parties or events. |
As we can see from the table, shoppers spend almost a quarter of their budget on Halloween costumes. They also spend much on pre- Halloween preparations, such as decorations and pumpkins. The holiday seems indeed very profitable for related manufacturers.
Is a Halloween costume a piece of apparel or a toy? The U.S. Court of International
Trade is being asked to decide. The court's decision will affect millions
of dollars a year worth of goods, and will have an impact on importers, manufacturers,
and retailers. The costume, a flimsy witch's outfit worn by children at Halloween,
is the subject of a test case in a protracted and widely watched dispute between
a U.S. manufacturer and an importer.
The manufacturer, Rubie's Costume Co., Queens, N.Y., says the costume is made of polyester fabric and therefore must be classified as apparel. The importer, Franco American Novelty Co., Glendale, N.Y., says the item should be classified as a non-durable "festive article", and exempted from apparel import limitations and duties.
To find out the Court of International Trade Receipt of Domestic Interested Party Petition Concerning Tariff Classification on Textile Costumes, click on CIT rule
The dispute over the Halloween costume classification is not a surprise: textiles is one of the hardest-fought issues in the WTO, as it was in the former GATT system. It is now going through fundamental change under a 10-year schedule agreed in the Uruguay Round. The system of import quotas that has dominated the textile trade since the early 1960s is being phased out. From 1974 until the end of the Uruguay Round, the trade was governed by the Multifibre Arrangement (MFA), a framework for bilateral agreements or unilateral actions that established quotas limiting imports into countries whose domestic industries were facing serious damage from rapidly increasing imports.
The quotas were the most visible feature. They conflicted with GATT's general preference for customs tariffs instead of measures that restrict quantities. They were also exceptions to the GATT principle of treating all trading partners equally because they specified how much the importing country was going to accept from individual exporting countries.
Since 1995, the WTO's Agreement on Textiles and Clothing (ATC) has taken over from the Mulltifibre Arrangement. By 2005, the sector is to be fully integrated into normal GATT rules. In particular, the quotas will come to an end, and importing countries will no longer be able to discriminate between exporters. We observe the agreement in work in our case: the costume import floats easily into the U.S. without any quantitative restrictions.
However, in our case we see that the free flow of the import seriously affects the domestic manufacturer. For such kind of cases, the agreement allows additional restrictions to be imposed temporarily under strict conditions(US Law, section 201). These “transitional safeguards" are not the same as the safeguard measures normally allowed under GATT because they can be applied on imports from specific exporting countries. But the importing country has to show that its domestic industry is suffering serious damage or is threatened with serious damage. And it has to show that the damage is the result of two things: increased imports of the product in question from all sources, and a sharp and substantial increase from the specific exporting country. The safeguard restriction can be implemented either by mutual agreement following consultations, or unilaterally. It is subject to review by the Textiles Monitoring Body.
In our case the import does not damage the whole industry, but a small segment of it - costume production. Let’s imagine Rubie’s has managed to have the costumes reclassified. Would it be a victory? Would it be a happy ending? Unlikely. In the hypothetical scenario that I foresee, the dissatisfied importers may apply to WTO to settle the dispute. Let us see what could happen of it, had the scenario come true.
First, address the relevant cases and see how they were settled in WTO.
The cases I have chosen for the table deal with quantitative restrictions (read: quota) or specific duties, in other words, our case could have been similar to these cases had Rubie’s got the costumes reclassified. As we can see from the table above, all the disputes were settled not to the benefit of the country that wanted to preserve quantitative or other trade restrictions. The situation of such a country is understandable: it wants to defend its economy from import invasion (it is also the main Rubie’s concern). However, GATT and ATC requirements with their pursuit to eliminate quotas in the long run do not support such politics.
So, had Rubie’s won the dispute with the costume reclassification, they would have hardly been able to win the dispute in the WTO.
Meanwhile, however, Rubie’s is seeking costume reclassification and vehemently criticizing the importers for taking advantage of a loophole that Customs created with its 1994 decision. In that decision, Customs reversed previous regulations classifying all costumes with textiles as wearing apparel, meaning they could get hit with duties of up to 30%.
Domestic players such as Rubie’s believe the retailers importing the flimsy costumes without duties have an unfair advantage, while the domestics have to pay tariffs on the fabric, thread and other supplies used to make a costume in the United States. On the other hand, importers and retailers say the introduction of tariffs and quotas will make the costumes, which are usually thrown away after one wearing, too expensive.
In -mid 1997, Rubie’s petitioned Customs to clarify a 1994 ruling that certain costumes could be classified as festive articles or toys. In 1998, Customs answered Rubie’s petition by issuing a split decision. The agency classified most of the articles it inspected as festive articles, and decided not to change the way it classifies the goods. After Customs published its decision in the Federal Register late 1998, Rubie’s waited until the next shipment of the imported costumes arrived in the United States. When Franco - American’s shipment arrived at the Port of New York and New Jersey, Rubie’s sued in the Court of International Trade (Which is witch? Costume case goes to Court, by Paula Green//The Journal of Commerce, July 15, 1999).
V. James Adduci II, outside counsel for Rubie’s, said the case probably
will take 12 to 15 months to settle.
So far, the dispute has not made any progress.
a. Geographic Domain: North America
b. Geographic Site: Eastern North America
c. Geographic Impact: US
a. Directly Related to Product: YES, TEXTILES
b. Indirectly Related to Product: NO
c. Not Related to Product: NO
d. Related to Process: YES, CULTURE
See Children and Adult Costumes
The trade product of the case study is costumes. The sector is textiles.
The domestic manufacturer of the product is Rubie’s Costume Co., Queens, N.Y. Rubie’s is also an importer as well as a domestic manufacturer, but imports account for only a small portion of the company’s $50 million in annual sales.
The key importer is Franco American Novelty Co., Glendale, N.Y.
The manufacturer, Rubie’s Costume Co. contends that Customs is incorrect in classifying textile costumes which are flimsy, not durable, and not normal articles of wearing apparel, as “Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Other: Other”. The provision is duty free and costumes classifiable under this provision are not subject to quota or visa restrains.
Rubie’s contends that all imported textile costumes should be classified as apparel and thus be subject to quota and visa restrains. Rubie’s says its domestically produced costumes are at a disadvantage in competition with imports that enjoy the lower duties applied to toys.
The importer, Franco American Novelty Co., says the item should be classified as a non-durable “festive article”, and exempted from apparel import limitations and duties.
None of the importers could estimate the total value of the imported costumes. Marc Beige, however, president of Rubie’s Costumes, said imports of costumes from China alone jumped by 100% to 100 million for the two-year period ending in 1996. Mr. Beige estimates imports of costumes to be $150 million a year, mostly from China.
All U.S. importers and retailers say the reclassification of the costumes as apparel rather than toys sought by Rubie’s would result in tariffs of up to 30% as well as quotas or import limits - and would kill imports of the costumes, which now retail for between $9 and $30.
To help the reader better understand the importers’ concerns, I will address the main notions that are being discussed: tariff and quota.
Tariff. A tariff is a tax upon imports. Historically tariffs have been a favored way of raising revenue. As such they can be extremely lucrative and viable, particularly if the goods and services subject to such charges are demand inelastic. More recently tariffs have been used as a means of protectionism by the authorities of states. Historically the United States was among the first industrialized countries to eschew free trade for tariff protection. In the post 1945 system of economic relations tariffs have been an important instrument in the formation of common markets and free trade areas. A common external tariff (cet) is the principal means whereby participating states can shelter behind a “tariff wall” thereby instituting protectionism upon a regional basis. Tariffs may be used as a foreign policy instrument, usually by a dominant state, either as a punitive retaliatory measure or to establish an economic sphere of influence. In the latter context, the institution of preferential arrangements is the usual method of creating such a sphere. The dominant state usually exchanges tariffs preferences upon a bilateral basis with a number of target participants. The latter may exchange preferences with each other but that is not a requirement of the preferential system. The best known of these arrangements was the Imperial Preference system instituted in 1932 at Ottawa with the United Kingdom as the “hub” of the scheme.
Non- tariff barriers (NTB); Quota.
Non-tariff barriers to trade fall into two categories. First, there are quotas, quantitative restrictions deliberately designed to protect domestic interests. The secondary category of NTBs is not always or intentionally a form of trade restriction, e.g. it can be technicalities, red tape, etc. In our case, we are interested in quotas as a form of trade restriction.
Having cleared up the notions of quota and tariff and the way they operate, let’s go back to our case. What is the point of the dispute? Why does Rubie’s want the costumes to be reclassified as apparel and importers want it to be remained as toys? The answer is simple: Rubie’s wants to defend themselves as a manufacturer who faces a lot of competition with the importers. If Rubie’s wins the argument and the costumes are reclassified, the importers will have to pay tariffs of up to 30% and the costumes will be subject to quotas. As it can be easily foreseen, the import of the costumes will turn out to be non - beneficial and, as a result, the import of the costumes will cease to exist.
Rubie’s will become the main (and the only?) U.S. costume giant.
MANY.
The domestic manufacturer of the product is Rubie’s Costume Co., Queens,
N.Y.
Rubie’s is also an importer as well as a domestic manufacturer, but imports
account for only a small portion of the company’s sales.
The key importer is Franco American Novelty Co., Glendale, N.Y.
Top Ten Importers of the Costumes.
Despite the fact that none of the importers could estimate the total value of the imported costumes, the data can be obtained from the US Department of Commerce.
As we can see from the table, the import of the Halloween costumes reached
$ 355,413,000 in 1999.
$343, 839, 000 or 96,74% of all the import was brought to the U.S. from the
top ten importers: China, Mexico, Taiwan, U.K., Hong Kong, Canada, Denmark,
Spain, Germany and Philippines.
Among the top ten importers, China is an overwhelming leader with its 78,67% of all imported costumes. Despite the huge production, Halloween costumes are not allowed to be sold in China. I believe this happens because the Chinese want to preserve their cultural heritage from Western and American influence (they did exactly the same thing when they banned to sell Ken toys with an earing as not to give a bad example to the youth).
Table 3 helps us assess the U.S. export of the costumes, which is estimated at as much as $59,522, 000. The two main importing countries of the costumes are Canada and U.K.
Comparing the costumes’ import and export proportions, one understands why the U.S. costume manufacturers are concerned about the changes in the import policy (the huge value of the costumes’ import certainly threatens the domestic manufacturers' vitality and competitiveness). The current situation justifies domestic manufacturers who seek measures that can disarm the importers in the competition for the sphere of trade influence and can ensure the domestic manufacturers’ security and prosperity.
As I came to the United States in August, the Halloween didn't make me wait
long for it. 
On the Halloween's eve, I have got an e-mail from my friend Ann,
55, a missionary from Texas. "Be careful with the holiday," she wrote in her
e-mail. "I'd advise you to stay indoors. You never know what to expect from
it. Sometimes people get crazy, VERY CRAZY..." And, as I later found out,
some of them did.
The loud celebration was not a problem for me, but we should keep in mind one thing - American culture (and also the holiday, which is a celebration of one's darker or alternative side) is spreading worldwide. Will some cultures ban it some day as dangerous? Most likely.
I think some cultures will try to avoid celebrating the holiday as they may believe that the holiday can threaten their security. Unfortunately, there were cases when the holiday ended up sad. Thus, several year ago, a Japanese student was shot dead in New Orleans. The human nature, released of the social pressure to behave rationally, breaks through in a dangerous way (somehow it reminds me of "The Lord of the Flies" by William Golding). So I think that the holiday will not take root in some countries, especially those where the deference for a person is a central cultural value. For those cultures scaring a neighbor will be equal to showing disrespect for them. However, you cannot predict. Thirty years ago people in Bangladesh did not wear shoes as well as they never went out to night clubs. Well, as for the night clubs, they still do not. But Bangladeshi living in the United States consider going out and drinking as casual as Americans do. Inevitably, this perception will affect Bangladeshi living in the home country as more and more investment and interaction from the former citizens will go to Bangladesh.
The holiday can be another "trap" for Bangladeshi, or people of similar culture. How will the people in these countries cope with another Freedom seduction? Wait and see...
1. "The Folklore of American Holidays" edited by Hennig Cohen and Tristram
Potter Coffin, 1987, pp.309-315.
2. "Holidays, Festivals, and Celebrations of The World Dictionary", compiled
by Sue Ellen Thompson and Barbara W. Carlson. Omnigraphics, Inc, 1994, p.132.
3. "The Encyclopedia of Religion" by Mircea Eliade. McMillan Publishing Company,
1987, p.176.
4. "Encyclopedia of Occultism and Parapsychology" edited by Leslie A. Shepard,
1984. Volume 1, p.24.
5. Which is witch? Costume case goes to Court, by Paula Green//The Journal
of Commerce, July 15, 1999.
6. Trick or treat? A growing dispute, by Paula Green//The Journal of Commerce,
December 14,1998.
7. Ruling on costumes headed for Trade Court, by Paula Green//The Journal
of Commerce, August 5, 1998.
8. Goblins, ghosts yet to scare up higher duties, by Paula Green//The Journal
of Commerce, May 22,1998.
9. A costly Halloween question: Are costumes toys or clothing? by Paula Green//The
Journal of Commerce, March 26, 1998.
10. The Dictionary of World Politics, by Graham Evans and Jeffrey Newnham.
University of Wales, Swansea, 1990.
11.The WTO Agreements in
the Uruguay Round
12.Trade Disputes
13.International
Trade Center
14.MSU statistics
15. Clipart com.
16. Animfactory
