AWA Focuses on Tariffs, Education, and Gray Market

“The year 2002 promises to be an eventful one for the watch industry in Washington, D.C.,” said Robert Filotei, American Watch Association chairman and president and chairman of Piaget USA, in his spring address. The AWA is the lobbying arm of the U.S. watch industry.

Watchmaker education, counterfeiting, tariffs, mercury in batteries, and regulations on products using endangered species (such as watch straps) are the focus of AWA lobbying this year. Many of its initiatives should “come to a head” this year, said Filotei.

Education. AWA and other organizations are trying to help U.S. schools that teach watchmaking attract more and better-qualified students and reduce a shortage of qualified U.S. watchmakers. It is working with Jewelers of America, the American Watchmakers Institute, and individual watch companies on a package of promotional materials, including a video that high school counselors could use to interest students in a career in watchmaking.

Anti-counterfeiting. Congress has appropriated $750,000 for a National Academy of Sciences study on the root causes of counterfeiting, including the role that the gray market (sales of genuine products by unauthorized dealers) plays in fostering counterfeits. The study grew out of an AWA idea offered to the Richemont Group (which owns several prestigious watch brands) and the international Anti-Counterfeiting Coalition.

Endangered species. AWA has launched a campaign to streamline the process by which the U.S. Fish & Wildlife Service regulates the import and export of watches with materials subject to endangered-species legislation, such as alligator, crocodile, or ostrich straps or mother-of-pearl dials. AWA lobbyists have already met with chiefs of FWS’s international and law enforcement divisions to discuss the industry’s concerns.

Watch tariffs. AWA is working with Congress and officials of the Bush administration on reducing watch tariffs, currently about $150 million per year, to zero. It expects the United States will include the issue of watch tariffs in the current round of the World Trade Organization negotiations.

AWA is also “close to having legislation enacted” to compensate U.S. Virgin Island watch assemblers for any potential loss of advantage due to watch tariff elimination,” said Filotei. AWA expects the issue will be addressed in trade legislation this year or next.

Mercury. AWA is working with the National Electrical Manufacturers Association and other industry groups to stop states from outlawing the use of mercury in all consumer products, including button-cell batteries used in watches; requiring labeling of battery-powered watches; and forcing the watch industry to operate a battery disposal program. Mercury is used in silver oxide batteries that many companies must use in thin or less expensive quartz analog watches. So far, the coalition has been able to defeat most state initiatives.