Trans-Pacific Partnership

Issue Summary

On December 14, 2009, U.S. Trade Representative Ron Kirk announced that the United States would join the TPP negotiations to develop a broad free trade pact in the Asia-Pacific region. The TPP negotiating partners currently include Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. According to the Office of the U.S. Trade Representative, TPP will be an “ambitious, 21^st-century” agreement that will “enhance trade and investment among the TPP partner countries, promote innovation, economic growth, and development, and support the creation and retention of jobs.” The USTR website has more information on U.S. involvement in the TPP negotiations.

TPP represents a significant opportunity to enhance the global value chain for yarns, textiles, and apparel, as well as accessories and footwear. The TPP countries include some of the fastest-growing markets for U.S. exports and U.S. branded apparel products and U.S. yarns, textiles, and other components—which grows U.S. jobs.

The opening offer by the United States on rules of origin for apparel is a “yarn forward” rule of origin, which means that all materials in an item must originate and be assembled in a TPP country in order to receive the preferential treatment.

The Obama Administration’s goal is to complete the TPP negotiations by the end of 2012. On November 30, 2011, U.S. Trade Representative Ron Kirk said in a speech to the U.S. Chamber of Commerce that President Obama will be seeking expedited Trade Promotion Authority from Congress to complete the negotiations. In addition, Kirk discussed the possible addition of other countries—including Japan, Mexico, and Canada, who have all expressed interest in joining TPP—and said that any new participants will need to catch up with current partners if they want to participate.

USA-ITA Position

USA-ITA supports removing barriers to trade with countries in the Asia-Pacific region via the Trans-Pacific Partnership (TPP) and has been involved in stakeholder meetings during the negotiating rounds in the TPP partner countries.

USA-ITA supports an agreement that is flexible and recognizes that companies rely on global value chains to produce and to sell. USA-ITA does not support the restrictive “yarn forward” rule of origin offered by U.S. negotiators, which would require all the materials in an item to originate and be assembled in a TPP country in order to receive the preferential treatment. USA-ITA believes this will hinder trade opportunities within the TPP as well as job growth and sustainability in the United States. A true 21^st century agreement should contain a flexible rule of origin for the majority of products and impose a retroactive yarn forward rule of origin only on those products that are manufactured in the United States. Read more about USA-ITA’s position by downloading the TPP Apparel Coalition one-page position paper here.

Advocacy

On December 14, 2011, USA-ITA filed a statement with the U.S. House Ways & Means Subcommittee on Trade for the December 14th hearing on the Trans-Pacific Partnership. In the statement, USA-ITA said it is time for the U.S. to recognize that the textile and apparel sector does not need special Rules of Origin or special protection in the TPP negotiations. In order for the TPP agreement to be a true 21st-century agreement, it must recognize that U.S. companies manufacture for a global consumer. To achieve this end, the TPP agreement must contain a flexible Rule of Origin for the majority of products and impost a restrictive yarn-forward Rule of Origin only on those U.S.-manufactured products that need special protection. The yarn-forward Rule of Origin would hinder trade opportunities within the TPP, and consequently hinder job growth in the United States. The full USA-ITA statement is available here and the press release is available here.

On January 13, 2012, USA-ITA filed comments with USTR to support the expansion of the TPP talks to include Japan, Mexico, and Canada. Similar to the comments filed with the House Ways and Means Committee, the comments emphasized the potential benefits of expanding TPP and also mentioned some of the special concerns for members doing business in Japan, Mexico, and Canada. The

USA-ITA is actively involved in two coalitions that advocate for a flexible, liberal, high-standard, 21^st century agreement that would open textile and apparel trade among the TPP partners.

The Trans-Pacific Partnership (TPP) Apparel Coalition

http://www.tppapparelcoalition.org

USA-ITA is an active member of the TPP Apparel Coalition, along with the American Apparel & Footwear Association (AAFA), National Retail Federation (NRF), Outdoor Industry Association (OIA), and the Retail Industry Leaders Association (RILA). The TPP Apparel Coalition includes American retailers, apparel brands, apparel manufacturers, and importers who design, market, and retail products manufactured in and imported to the United States, as well as market and retail products throughout the TPP partner countries.

The Coalition supports the negotiation of a 21^st-century agreement, which offers a potential growth platform for economic integration, trade and investment that could provide tremendous new opportunities for our members to buy and sell goods and services and to sustain and grow well-paying U.S. jobs and provide high value add for the US and TPP economies.

The TPP Apparel Coalition has produced a number of resources on TPP, including:

For more information on the TPP Apparel Coalition, visit http://www.tppapparelcoalition.org.

The U.S. Business Coalition for TPP/Emergency Committee for American Trade (ECAT)

http://www.tppcoalition.org

http://www.ecattrade.com

USA-ITA supports the U.S. Business Coalition for TPP and is a member of the Emergency Committee for American Trade (ECAT), which co-chairs the coalition.

The U.S. Business Coalition for TPP supports the negotiation of a high-standard TPP agreement that will open markets for U.S. farmers, manufacturers, and service providers, and increase U.S. exports and support and create American jobs. The TPP agreement should also advance security, stability, and prosperity throughout the Asia-Pacific region. The U.S. Business Coalition for TPP is co-chaired by the Emergency Committee for American Trade (ECAT), founded in October 1967 by a number of U.S. business leaders concerned about a worldwide trade war resulting from pending proposals in Congress to restrict imports into the United States. These business representatives felt that a combination of restrictions and retaliations could destroy two decades of progress in the expansion of trade and investment and would consequently damage other areas of international cooperation.

USA-ITA has joined the U.S. Business Coalition for TPP in signing a number of letters and statements, including:

United States Association of Importers of Textiles and Apparel

Trans-Pacific Partnership

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