Tuesday, September 18, 2012
TPP Apparel Coalition lobbies for more trade flexibility
The Trans-Pacific Partnership Apparel Coalition urged negotiators to revise "out of date" apparel trade regulations after the 14th round of talks of the Trans-Pacific Partnership in Leesburg, VA.
The TPP is a prospective regional free trade agreement between the United States, Australia, Chile, Peru, Singapore, New Zealand, Brunei, Malaysia, and Vietnam. Canada and Mexico are expected to enter the TPP negotiations in October.
The contended "yarn forward" rule of origin denies duty-free status for clothes unless entirely manufactured in the FTA country. If any component of the item—thread, yarn, elastic strips, or fabric—originates in another country, duties are applied on the entire garment. Opponents assert the yarn forward rule undermines the benefits of free trade agreements.
"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.
TPP stakeholder Vietnam's top export to the U.S. is apparel, but the country is unlikely to open the door to U.S. agricultural exports unless the trade rules loosen up.
Forty-six organizations representing U.S. agricultural interests last week sent a letter last week to U.S. Trade Representative Ron Kirk and Secretary of Agriculture Tom Vilsack, stating that "Vietnam holds far and away the greatest market potential for the vast majority of U.S. food and agricultural products" and requesting that the Vietnamese agricultural market is fully liberalized" in the final agreement.
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