TPP Should Boost U.S. Textile Exports, DR-CAFTA Directory Unveiled
During the July 2011 USA-ITA Annual Meeting, officials from the Office of the U.S. Trade Representative and the Commerce Department’s Office of Textiles and Apparel gave an update on U.S. trade policy affecting the textile and apparel industry. They discussed the Trans-Pacific Partnership (TPP) negotiations; the short-supply provisions of the pending free trade agreements; announce a new DR-CAFTA1 Sourcing Directory; and provided policy updates on Haiti, Jordan, etc.
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TPP
Expected to Increase U.S. Yarn and Fabric Exports to Member Countries
The USTR official noted that the eighth round of TPP talks will be held in Chicago from September 7-14, 2011. Based on already strong U.S. yarn and fabric exports to Vietnam and Malaysia (which are both TPP negotiating countries) and the trend for FTAs to increase such exports2, USTR believes that the TPP would offer significant new opportunities for the U.S. textile and apparel industry.
Wants Trade Advice on Product-Specific Rules, What’s in Short Supply
At the last round, negotiators worked on product-specific rules of origin, including yarn-forward rules for textile and apparel. This is an on-going process, and USTR is anxious to hear from trade on product categories that might undergo a change, which categories are sensitive for U.S. producers, etc. USTR also wants to be “forward thinking” for products for which there is limited supply, but needs to hear from the trade on the issue.
FTAs
The 3 Pending FTAs Have Short-Supply Process Similar to DR-CAFTA
The OTEXA official noted that the process for dealing with textile and apparel short-supply under the pending FTAs with Korea, Colombia, and Panama is very similar to the short-supply process for DR-CAFTA. This is because DR-CAFTA has a fairly streamlined process, which takes 30-44 business days, in contrast to some other U.S. FTAs like NAFTA, Bahrain, Singapore where there are still many proceedings pending.
New DR-CAFTA Textile/Apparel Sourcing Directory Will Soon Be Launched
USTR, DR-CAFTA countries, and the Inter-American Development Bank are creating a regional sourcing directory for textiles and apparel. Users will be able to search this online directory for companies that fit their criteria. Textile and apparel importers will benefit from having information on production along the entire supply chain, even listing suppliers of short-supply items.
A “beta” version of the new DR-CAFTA sourcing directory will be presented at the MAGIC trade show, August 21-24, 2011 in Las Vegas, at the Sourcing in the Americas Summit and Pavilion, which OTEXA and USTR helped to organize. Information is available here.
Companies with Jordan-FTA Trade Should Watch for Sexual Abuse at Factories w. Dorms
The USTR official stated that there have been widespread reports of alleged sexual abuses at factories in Jordan, particularly those with dormitories. The U.S. government is closely monitoring one in particular to ensure that the case proceeds through the proper channels within the criminal justice system and that the case is investigated in a thorough manner. USTR hopes that companies will also monitor this situation closely, in order to ensure that worker rights are upheld and such abuses do not take place in factories in Jordan closely associated with U.S. companies.
Haiti, AGOA, China
Haiti Textile/Apparel Industry Operating at 98% Capacity
According to the USTR official, Haiti’s textile and apparel industry is now operating at 98% capacity. HAITI HELP continues to draw interest to sourcing in Haiti, and new investments in industrial parks should further increase capacity. The U.S. government is also helping fund a new port that should allow for shipments to arrive in less than four days to Miami. The Commerce Department is also planning a trade mission to Haiti led by Under Secretary Sanchez.
AGOA Third-Country Fabric TPL Extension Bill Expected to Move
The USTR official expects that the bill recently introduced by Representative McDermott (H.R. 2493) that would extend the third-country fabric provision from September 2012 to September 2015 will move forward. The bill would also extend AGOA eligibility to the Republic of South Sudan. (See ITT’s Online Archives or 07/14/11 news, 11071415, for BP summary.)
Know Your Supply Chain in China and Elsewhere
The officials also emphasized the importance of a company knowing its supply chain in general and in particular regarding China. They pointed to a recent Greenpeace report linking well-know footwear and apparel companies with polluting factories in China, reports of Chinese textile plants leaking hazardous chemicals and toxins in the Pearl and Yangtze River Deltas, etc.
(The USTR official also discussed the U.S. position against a December “Early Harvest” World Trade Organization Doha Round agreement that focuses only on providing duty-free, quota free (DFQF) access to least developed countries. Among other things, the Administration is concerned that if not done properly, DFQF could be very disruptive to current U.S. preference partners and developing country partners under existing U.S. FTAs. See ITT’s Online Archives or 07/26/11 news, 11072642, for BP summary of a USTR official saying that an “Early Harvest” agreement would not happen.)
1Dominican Republic-Central America-U.S. Free Trade Agreement, also called CAFTA-DR.
2The officials state that one of the best examples of this trend is DR-CAFTA, since U.S. yarn exports to DR-CAFTA partners have increased from $189 million to $1.5 billion; and fabric exports grew from $571 million to $1 billion.