the 14th round of negotiations of the Trans-Pacific Partnership (TPP), the
Trans-Pacific Partnership Apparel Coalition urges negotiators to abandon out of
date apparel trade rules in favor of a 21st Century approach to promote and
sustain apparel value chains that employ millions of American workers. TPP
negotiators wrapped up the 14th round of negotiations Saturday in Leesburg, VA.
Representatives of the TPP Apparel Coalition were on hand in Leesburg to meet
with negotiators and other stakeholders.
“A TPP agreement that preserves rigid and outdated apparel rules
would almost certainly prevent U.S. agriculture exporters from gaining access
to lucrative Asian markets, undermine the overall value of the TPP for American
families, and deny many American industries the job creating growth that would
otherwise result from a successful TPP,” said Sandy Kennedy,
president of the Retail Industry Leaders Association.
TPP is a prospective regional free trade agreement (FTA) between the United
States, Australia, Chile, Peru, Singapore, New Zealand, Brunei, Malaysia, and
Vietnam. Canada and Mexico are expected to join the TPP negotiations next
“We welcome the inclusion of Canada and Mexico in the TPP as both
countries will be able to provide first-hand knowledge of how the
trade-restrictive and outdated “yarn forward rule” undermines the potential
benefits of FTAs. Flexible apparel rules that reflect the commercial
realities of global value chains and stress the importance of market access
will create jobs, trade and investment here in the United States,” said
Kevin Burke, president and CEO of the American Apparel & Footwear
Economic studies reveal that 70-80 percent of the retail value of imported products
is generated in the United States by American workers. In the case of
imported apparel, this translates into 3 million good-paying U.S. jobs.
These American jobs are short-changed by the yarn-forward rule of origin.
yarn forward rule of origin denies duty-free treatment for apparel unless it is
almost entirely manufactured in the FTA country. In fact, if any
component of the item—thread, yarn, elastic strips, or fabric—is sourced
elsewhere, duties are applied on the entire garment. As shown by this chart, the
experience of the U.S. Free Trade Agreement with Central America and the
Dominican Republic (CAFTA-DR) demonstrates that yarn-forward does not promote
trade, U.S. exports, or U.S. Jobs."
apparel rules are a priority for a number of TPP stakeholders, particularly
Vietnam. Apparel is the top export product for Vietnam to the United
States. Last week in a letter to U.S. Trade Representative
Ron Kirk and Secretary of Agriculture Tom Vilsack, 46
organizations representing U.S. agricultural interests said that “Vietnam holds
far and away the greatest market potential for the vast majority of U.S. food
and agricultural products” and to “make every effort to ensure that the
Vietnamese agricultural market is fully liberalized as part of a final
agreement.” Vietnam is unlikely to open its market to U.S. agricultural
products without flexible apparel rules that provide the Vietnamese apparel
industry with meaningful access to the U.S. market.
“The TPP Apparel Coalition remains committed to the successful
conclusion of a comprehensive TPP that promotes trade and investment in all
sectors. Growing evidence suggests that flexible rules for apparel trade will
be a critical component of a successful agreement,” said
Julie Hughes, president of the United States Association of Importers of
Textiles and Apparel.
“Inflexible rules on apparel trade, like yarn-forward, don’t work
because they are not compatible with how business operates in the 21st
Century. Without a more flexible approach, these rules will continue
their record of failure in promoting new trade and investment, and will end up
being a barrier to both U.S. imports and exports,” said
Matt Shay, president and CEO of the National Retail Federation.
Trans-Pacific Partnership (TPP) Apparel Coalition supports negotiation of a
21st Century TPP agreement that generates new trade and investment
opportunities for the benefit of workers, businesses, and families. These
opportunities include buying and selling goods and services, sustaining and
growing well-paying U.S jobs, and providing high added value for the U.S. and