California Apparel News

Currently, the United States is negotiating two free-trade agreements that could boost U.S. textile exports to other countries but reconfigure sourcing patterns for apparel manufacturers around the world.

One of those free-trade accords is the Trans-Pacific Partnership, which involves the U.S. and 11 other countries. After three years, member countries are now in their 20th round of negotiations in Bali, Indonesia.

The other free-trade pact is the Trans-Atlantic Trade and Investment Partnership between the United States and the European Union. Negotiations just started in July with the second round slated to begin Oct. 7 in Brussels.

While it might be years before either one of those free-trade agreements takes effect, there is a lot of posturing about whether they should be yarn-forward pacts, which means that all yarn put into a garment must come from the region, or merely a cut-and-sew accord, which means yarns and fabric may come from outside the trade-pact area but cut-and-sewn within the region.

Elise Shibles, an attorney with Sandler, Travis & Rosenberg, said she thought the Trans-Pacific Partnership would stick to a yarn-forward agreement but carve out exceptions for short-supply fabrics that are not manufactured in the area. Those fabrics could include linen, corduroy and silk.

“So far in the TPP negotiations, the thorniest issues have been textiles, footwear, pharmaceuticals, intellectual property and state-owned enterprises,” said Shibles, who gave an Oct. 1 seminar titled “International Treaties: What They Mean to Apparel and Textiles” at the Los Angeles International Textile Show at the California Market Center.

The United States, Mexico and Peru have been pushing for a yarn-forward proposal because they have vibrant textiles industries whose cotton yarn and fabric products would benefit from such a provision.

Pushing for more flexibility are New Zealand, Australia, Singapore, Malaysia, Vietnam, Brunei, Canada, Chile and Japan.

Shibles said she is hoping that the 12 countries that make up the TPP pact conclude their negotiations this year so the process can begin to have the trade agreement approved by each country’s legislative body. It could take anywhere between two and five years before the TPP goes into effect, said the attorney, who specializes in trade regulations and customs law.

On the European front, negotiations are just in their infant stage. “Hopefully, it won’t take 19 rounds in three years to conclude these negotiations,” Shibles said. “But we all have our sensitivities, and it could be a lengthy process.”

On the apparel and textile side, negotiators will shoot for regulatory coherence in things such as testing and labeling of products. “There are issues on what is considered recycled and green,” the attorney said. “Recently, the EU Commission came out with a report that had to do with issues on apparel and textile labeling—country-of-origin markings they thought were okay and don’t need to be changed. New labeling on leather products regarding what is genuine and certain issues about allergies have come up.”

California Fashion Association President Ilse Metchek, who moderated the seminar, noted that exporting apparel to other countries can be a challenge because of non-tariff barriers.

“Try getting a bathing suit on the beaches of Brazil,” she said, noting that Brazil makes it almost impossible for U.S. apparel manufacturers to export to that South American country because there are so many regulations that must be followed.

Growth opportunities, she said, are for “Made in USA” apparel in emerging economies. “The future growth is about China and India,” she said. “Their middle class is growing, but I don’t think in my lifetime I will see people in India buying $300 jeans. The middle class there will not be like our middle class. We need to understand that when we plan and make our products for these countries.”