52 Congressmen Want Yarn Forward & Other Textile Rules for the TPP
On June 1, 2011, 52 Congressmen from districts with textile and apparel industry interests sent a letter to the U.S. Trade Representative on the challenges presented by the Trans-Pacific Partnership for the U.S. textile and apparel industry, especially with the inclusion of Vietnam, and recommended yarn forward and other rules to address those challenges.
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The Congressmen express concern that the TPP agreement could dramatically shift global trading patterns, displacing critical U.S. textile and apparel jobs and undermine important trade relationships in the Western Hemisphere.
Especially Concerned with Vietnam Textiles and Apparel
In their letter, the Congressmen express concern about Vietnam’s textile and apparel production, arguing that Vietnam’s textile and apparel production and export model is heavily influenced by its proximity to and its relationship with China.
The letter also states that in terms of trade flows, Vietnam, paying full duties, is already the second largest supplier of textiles and apparel to the United States behind China and 57% of the U.S. merchandise trade deficit with Vietnam is in textiles and apparel.
The Congressmen state that they are encouraged that the USTR has already indicated that textiles and apparel should be handled as a separate negotiating group, noting that the textile and apparel sector has always been treated as an independent chapter under U.S. free trade agreements. (See ITT’s Online Archives or 05/17/11 news, 11051727, for BP summary of USTR testimony that the U.S. is seeking to have a separate textile chapter as part of TPP.)
Yarn Forward Rule, Special Market Access Rules, Etc. Recommended
The Representatives recommend the following negotiating objectives under the TPP textile chapter:
- Yarn-forward rule of origin with no loopholes - The basic yarn-forward rule of origin for textiles and apparel should be adopted under the TPP with no loopholes. Derogations from the yarn-forward rule, including tariff preference levels (TPLS) and single transformation, should not be allowed.
- Special market access rules - Noting Vietnam’s non-market economy status and the subsequent inherent advantages provided to its textile and apparel sector, special market access rules should be negotiated under TPP. Various approaches for sensitive products should be considered such as excluding certain tariff lines altogether, negotiating tariff reductions versus phase-outs, and extended duty phase-down/phase-out periods. Furthermore, Vietnam should be required to meet certain transparency and market-based economy benchmarks before gaining benefits.
- Strengthened Customs enforcement rules - Customs enforcement rules must be strengthened. Customs rules should be updated to include effective tracking of yarn and fabric inputs as well as other measures.
Letter available by emailing documents@brokerpower.com.