U.S. Textile and Apparel Trade Policy Update

Transcription

1 U.S. Textile and Apparel Trade Policy Update Kim Glas Deputy Assistant Secretary for Textiles and Apparel International Trade Administration U.S. Department of Commerce USA-ITA January 9, 2013

2 Agenda Trans-Pacific Partnership CAFTA-DR Fixes/AGOA 3 rd Party Fabric Extension Free Trade Agreements National Export Initiative Argentina, Brazil, and Mercosur

3 Trans-Pacific Partnership Agreement Successful completion of 15 th negotiating round in Auckland, New Zealand: December 3 12 th Mexico and Canada join TPP negotiations Target completion the end of 2013

4 TPP: A 21 st -Century Agreement that Promotes Jobs and Sourcing Opportunities Labor and Environmental provisions Promotes trade and investment among member countries and ensures benefits are shared among signatories Forward-looking agreement with aim of future expansion to other partners in the region

5 TPP Region Has Substantial Textile and Apparel Production Total TPP textile exports - $25.7 billion Total TPP apparel exports - $32.7 billion The four largest TPP textile exporters the U.S., Vietnam, Mexico and Malaysia represent over 80 percent of total TPP textile exports

6 Exports by TPP Country Textiles Apparel Total United States: $13.8 B $5.2 B $19.0 B Vietnam: $3.8 B $13.2 B $17.0 B Mexico: $2.1 B $4.6 B $6.7 B Malaysia: $2.0 B $4.6 B $6.6 B Canada: $2.0 B $1.3 B $3.3 B Singapore: $851 M $1.2 B $2.1 B Peru: $374 M $1.5 B $1.9 B Chile: $213 M $441 M $654 M New Zealand: $297 M $206 M $503 M Australia: $253 M $235 M $488 M Brunei: $2 M $224 M $226 M Source:: WTO Statistics Database, Time Series on International Trade.

7 TPP: Textiles and Apparel The Product Specific Rule of Origin (PSR) for textiles is based on the yarnforward concept, where a good qualifies for duty preferences if production occurs in one or more parties to the FTA from the yarn manufacturing stage forward to the end product, however we realize that some products may not be available from TPP partners. Thus, in order to maximize the eligibility of textile and apparel products for duty preference, flexibilities will be considered, such as short supply. A short supply list (SSL) would be structured to identify inputs not available in TPP countries and eligible for use from third countries. The SSL would be structured on a permanent and temporary (3 years) basis.

8 Current Short Supply Process under NAFTA/CAFTA After FTA implemented, Interested Entities submit requests for review by U.S. Government. NAFTA style: request rule of origin change for specific product that allows sourcing of fiber, yarn, or fabrics from outside region. U.S. first vets domestically, then consults with trading partners. CAFTA style: request that a specific fiber, yarn, or fabric be placed on a list that can be used in any product. Request/offer between businesses with U.S. Government determining based on submitted information whether product is available.

9 NEW for TPP: Negotiated Short Supply Governments will agree to shorts supply lists of fibers, yarns, and fabrics that can be sourced from outside the region for qualifying products. These lists will be part of the agreement when implemented. There will be NO PROCESS after implementation. No voluminous request/offer communications need be provided. Governments will vet proposed products with their industries and discuss concerns to reach a resolution on which products will be included on the short supply lists.

10 Changes under TPP Short Supply Simplified Consolidated Logical Efficient

11 Types of Product Descriptions for TPP Entire HTS classification Example acrylic or modacrylic synthetic staple fiber, carded. Subset of HTS classification Example percent cotton yarn-dyed woven flannel fabrics, made from 14 through 41 NM single ring-spun yarns, classified in , weighing 200 grams per square meter or less. Product with a specified end-use Example Fabrics of average yarn number exceeding 93 metric, classified in tariff items , , and , for use in dress shirts classified in HTS headings 6205 and Composite product with a specified enduse Example 3-layer laminated fabric; waterproof and breathable with DWR coating and laminated with eptfe membrane classified in tariff item ; face: weave, twill or plain; back: tricot knit, Warp face: d; Warp back: 20-40d; Filling face: d; Filling back: 15-30d; face and back: flat or textured continuous filament. Face g/m2; Back: 28-40g/m2 for use in outdoor apparel

12 Implementation of AGOA 3 rd Party Fabric Extension and CAFTA Fixes! Passed US Congress on August 2, 2012 Signed by the President on August 10, 2012 Fixes took effect on October 13, 2012

13 The African Growth and Opportunity Act (AGOA) Expires September 30, 2015 Administration committed to working with Congress to extend AGOA beyond rd country fabric provision extended through September 30, 2015 Trade (YTD 2012) - U.S. imports of textiles and apparel from SSA totaled $919.5 million in 2011 (+14.5% from 2010) - Almost 90% of imports receive preferential access to US market under AGOA

14 CAFTA-DR Update: Technical Fixes 1. Women s and girls woven sleep bottoms 2. Treatment of knit to shape components 3. Clarification of Chapter notes to the short supply list for sewing thread, pocketing fabrics, and visible lining fabrics 4. Treatment of elastomeric yarn in fabrics on the short supply list 5. Classification of knit waistband ribs 6. Monofilament sewing thread

15 Implementation of Three New FTAs In 2012, 3 FTAs implemented: Korea (March 15, 2012); Colombia (May 15, 2012) and Panama (October 31, 2012) Rule of origin: yarn-forward immediate duty-free if product meets rules of origin Textiles-specific safeguard Customs enforcement provisions Streamlined commercial availability provisions Combined, US exports of textiles and apparel to these markets grew by 13% between 2010 and 2011, to $646.1 million

16 National Export Initiative (NEI) President Obama announced the National Export Initiative (NEI) in his 2010 State of the Union address, and set the ambitious goal of doubling U.S. exports in the next five years to support millions of jobs here at home.

17 ($Millions) U.S. Textile & Apparel Trade with CAFTA-DR,

18 U.S. Exports of Yarns and Fabric to CAFTA-DR

19 Top 10 Markets for U.S. Exports of Textiles and Apparel Ranked by 2011 Value ($Billions) Country % change Canada $4.5 $ Mexico $4.3 $ Honduras $1.5 $ China $1.2 $ Dominican Republic $0.672 $ Japan $0.589 $ El Salvador $0.435 $ United Kingdom $0.543 $ Belgium $0.417 $ Hong Kong $0.390 $ World $19.7 $ Source: Office of Textiles and Apparel, Export Market Report.

20 Export Promotion Success Unprecedented Success! Sourcing in the Americas Summit & Pavilion was featured at MAGIC Sourcing in August of 2011 and 2012 Sourcing in the Americas 2011 and 2012 brought together regional businesses from all industries in the supply chain fiber, yarn, fabric, apparel manufacturers, brands and retailers

21 Successful Partnerships Sourcing in the Americas Events were a collaborative effort between the Office of Textiles and Apparel (OTEXA), the Office of the U.S. Trade Representative (USTR), multiple major domestic and international trade associations, and various domestic trade show organizers 2011 and 2012 DOC Americas Pavilion featured over 100 companies from the U.S., CAFTA-DR, Colombia, Haiti, Mexico, and Peru

22 Argentina Trade Restrictions August 21, U.S. requested consultations with Argentina concerning measures imposed on imported goods Argentina accepted requests of Australia, Canada, the EU, Guatemala, Japan, Mexico, and Turkey to join the consultations Consultations did not lead to resolution of concerns December 6, U.S. requested establishment of WTO Dispute Settlement Panel Specific concerns raised in the dispute: Non-transparent licensing requirements Importers must agree to export products of equal or greater value, invest in production facilities in Argentina, increase Argentinean content in their products, control prices and/or agree not to repatriate profits

23 Brazil s New Tax Breaks for the Textile Industry On April 3, 2012 the Brazilian government announced tax incentives for the textile sector (and 14 other sectors). The current 20 percent payroll tax will be replaced by a tax on gross revenues that was set at 1 percent for industries. Exports will be excluded from the calculation of revenues.

24 MERCOSUR Members Allow Duty Rate Increases On December 20, 2011, MERCOSUR 1 Member countries agreed that each member country is allowed to increase import duty rates temporarily to a maximum rate of 35 percent on up to 100 tariff items per member country Effective January 2012; to remain in effect through the end of 2013, with the possibility of extension through the end of MERCOSUR: Argentina, Brazil, Paraguay and Uruguay

25 OTEXA Website

26 Thank You Kim Glas Deputy Assistant Secretary Office of Textiles and Apparel Telephone: (202) OTEXA website: otexa.ita.doc.gov