U.S. import and Peruvian export advocates last week sent a letter to Peruvian Foreign Trade Minister Jose Luis Silva and U.S. Trade Representative Ron Kirk urging elimination of a “yarn forward” rule of origin on apparel as part of the ongoing Trans-Pacific Partnership negotiations.
The Peruvian Associación de Exportadores (ADEX) and members associations of the U.S. Trans-Pacific Partnership Apparel Coalition sent a joint letter on behalf of U.S. and Peru apparel producers, retailers, and brands, saying it’s “time to modernize apparel trade rules and move away from unworkable and outdated rules that limit trade and investment in apparel.”
The TPP is a trade pact between Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. In November, the TPP heads announced the broad outlines of an agreement during the Asia-Pacific Economic Cooperation (APEC) leaders’ summit. They also agreed to try to finish the talks by July, with tough issues and a legal review to follow in the second half of 2012. The next full TPP negotiating round is expected in March 2012 in Australia.
“Now is the time to revisit rules on a key component to a successful TPP – the trade rules on apparel,” said Julie Hughes, president of the U.S. Association of Importers of Textiles and Apparel. “Nearly 70 percent of all duties collected by the United States from the TPP nations are levied on apparel imports. The yarn forward style rule of origin is outdated and unworkable and does not reflect the commercial realities of global value chains.”
In September, Ron Wyden, D-Ore., chairman of the Senate Finance Committee's international trade, Customs and global competitiveness subcommittee, sent a letter
to the Office of the U.S. Trade Representative about why he believes the TPP negotiators should reject yarn-forward rules of origin for apparel in the TPP. In October, U.S. lawmakers sent a letter
to Kirk urging the United States to adopt a new approach on apparel trade in the TPP agreement.
“If continued in the TPP, restrictive yarn forward rules of origin would needlessly raise costs for consumers and fail to entice reciprocal concessions beneficial to U.S. exporters, such as significant new market access for U.S. exporters of industrial goods, services and agricultural products, and strong protections for intellectual property rights and investors,” said Sandy Kennedy, president of the Retail Industry Leaders Association.
To view the TPP Apparel Coalition position paper, visit the TPP Apparel Coalition Website
. — Eric Johnson