Textile, Apparel Groups Weigh In On TPP

The seventh round of negotiations on the Trans-Pacific Partnership (TPP) Agreement recently concluded in Ho Chi Minh City, Vietnam, and U.S. textile and apparel organizations are setting forth their respective positions with regard to how textiles and apparel should be treated in the trade agreement that is expected to result from the negotiations.

The TPP Agreement is a regional trade agreement covering the interests of the United States and eight other countries in the Asia-Pacific region including Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. U.S. Trade Representative (USTR) Ron Kirk announced the Obama administration's intentions to enter into negotiations in December 2009, and seven rounds have been held to date, with two more rounds scheduled to take place in San Francisco September 6-11—at which time a focus on textile rules is expected—and in Lima, Peru, October 24-28. It is hoped that agreement outlines will be reached during a meeting of Asia-Pacific Economic Cooperation leaders scheduled to take place in Honolulu, Hawaii, November 8-13.

At the end of the most recent round in Vietnam, the USTR reported continuing progress across all negotiating groups (See " Steady Progress At The Seventh Trans-Pacific Partnership [TPP] Round," www. TextileWorld.com, June 28, 2011).

Following the close of the seventh round, the National Council of Textile Organizations (NCTO) issued a statement in support of strong textile rules in the TPP Agreement. Citing recent trade data showing a 41-percent increase in U.S. yarn and fabric exports to the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) region during the first four months of 2011—with that increase valued at $377 million, the council stressed the importance of including a strict yarn-forward rule of origin in the TPP Agreement. NCTO also noted that in the last year, direct employment at U.S. textile mills has grown by 2,500 jobs and indirect employment has grown by 7,500 jobs, with more new jobs coming online in the coming months.

"The outcome of the TPP negotiations will have a profound impact on the U.S. textile industry and the nearly two million workers in the Western Hemisphere textile and apparel supply chain," said NCTO President Cass Johnson. "The CAFTA agreement demonstrates that a strict yarn forward rule which requires that the yarns, fabrics and garments be made in the free trade area can produce powerful benefits for U.S. workers, U.S. exports and for workers in countries close to home. That is why NCTO supports only a strict yarn forward rule in the TPP negotiations and will strongly oppose any deviations to that rule. In addition, the textile rules must be accompanied by stronger, more effective customs rules and enforcement to prevent fraud."

Johnson also noted Vietnam presents a "special case" in the negotiations because of the country's non-market economy and its large state-owned and state-subsidized textile and apparel enterprises. For this reason, he said, "the U.S. government must include special measures in the TPP to ensure that U.S. textile exporters and their customers in the CAFTA region are not put at a competitive disadvantage. By doing so, they will ensure that U.S. textile exports—and U.S. textile jobs—will continue to grow."

The TPP Apparel Coalition—a group of apparel and retail organizations including the American Apparel & Footwear Association, National Retail Federation, Outdoor Industry Association, Retail Industry Leaders Association and United States Association of Importers of Textiles and Apparel—issued a statement that "apparel rules of origin are a key element in the overall success of the Trans-Pacific Partnership," and called for "a solid agreement on apparel that generates new trade and investment opportunities." In a position paper released to TPP negotiators and stakeholders, the coalition advocated the following: integration of textile and apparel products into the market access negotiations without providing a separate chapter or separate provisions such as safeguard processes or customs enforcement measures; liberalization and simplification of the rules of origin, limiting restrictions to individual products for which data show them to be "necessary and appropriate"; immediate and reciprocal implementation of duty-free treatment for qualified products; harmonization and streamlining of customs procedures among participating countries and incorporation of account-based processing; harmonization of rules and regulations; a strengthening of intellectual property rights protections; and creation of an agreement that can evolve as necessary to bring in new members and address emerging textile and apparel issues.