Trans-Pacific Partnership Shaping Up as New Negotiations Scheduled
U.S. clothing makers are eagerly watching how a new free-trade agreement between the United States and eight other countries plays out as negotiators get ready to meet again in March in Australia.
Already, apparel trade groups are lobbying for a more liberal interpretation of the Trans-Pacific Trade Partnership (TPP) that would not require that garments and textiles be made of regional yarns to qualify for duty-free status.
The American Apparel & Footwear Association and the U.S. Association of Importers of Textiles and Apparel (USA-ITA) dispatched letters supporting the more liberal interpretation. In previous free-trade agreements, apparel and textiles are required to be made of regional yarns to eliminate tariffs that are as high as 32 percent of the value of the garment or fabric. This yarn-forward provision means that the yarn used to make clothing or fabric would have to come from one of the pact’s signatory countries.
“As it stands today, textiles and apparel are treated differently than other products. Restrictive rules such as the 'yarn-forward' style rule of origin, which require all the materials that go into a garment to originate and be assembled in a TPP country to receive tariff-free treatment, are unworkable in today’s global value chains,” the USA-ITA wrote.
The group went on to note that past free-trade agreements have shown that such an “all or nothing” approach does not spur new U.S. exports or new apparel trade. “Today’s consumers expect a wide variety of fashionable apparel, and flexibility in sourcing inputs is vital to meet design specifications and consumer demands,” the USA-ITA said.
But groups representing U.S. textile mills and factories are pushing for a “yarn-forward” requirement, saying it saves U.S. jobs in an industry that is increasingly threatened by China and other countries where labor and other costs are lower than in the United States.
"If there is to be a TPP, the benefits accrued should go to the signatories rather than to countries that are not part of the agreement," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. Cass Johnson, president of the National Council of Textile Organizations, believes liberalizing the “yarn-forward” requirement would not only drain potential jobs and investment from the TPP, but it also would "cause the catastrophic loss of textile and apparel jobs in the United States and in its free-trade partner countries.
"The nine Asian and Pacific countries that make up the proposed free-trade pact have established a broad outline for an agreement that would unite mid-size countries on both sides of the Pacific Ocean. The countries currently negotiating the pact are Chile, New Zealand, Brunei, Singapore, the United States, Australia, Malaysia, Vietnam and Peru.
Japanese leaders have indicated they are interested in joining the regional free-trade-pact talks to build a stronger domestic economy. But Japanese farmers fear they would be wiped out by international competition—Deborah Belgum
