The National Retail Federation today welcomed a bipartisan letter from members of the House asking U.S. Trade Representative Ron Kirk to avoid restrictions on textiles and apparel in the Trans-Pacific Partnership trade agreement currently under negotiation.


“Restrictions such as the 'yarn forward' rule have severely undermined benefits that could otherwise be reaped from recent free trade agreements and should not be repeated now that a major new agreement is under negotiation,” NRF Vice President and International Trade Counsel Erik Autor said. “These restrictions make it difficult for retailers to use these agreements and thereby provide American families with the products they need at prices they can afford.”


“Removing these restrictions would help promote new trade and investment, thereby creating U.S. jobs and export opportunities while holding down prices for American consumers. That's a win-win that's good for the U.S. economy,” Autor added.


A letter signed by 15 House Republicans and 15 House Democrats asked Kirk to leave “outdated and inflexible rules” on textiles and apparel out of the TPP, which is currently undergoing its latest round of negotiations in Lima, Peru. In addition, the lawmakers argued that a more flexible approach on textile and apparel rules would help provide leverage necessary to achieve the best possible agreement for U.S. economic interests.


“America's success today and in the future relies on our ability to foster innovation and to bring to market goods and services that consumers value,” said Stephanie Lester, vice president, International Trade, Retail Industry Leaders Association. “The TPP Apparel Coalition seeks a TPP agreement that creates opportunities to maximize our innovative strengths and generates U.S. jobs along the full range of activities that American firms and American workers do to bring a product from its conception to the final customer.”

 

At issue is the so-called “yarn forward” rule of origin. Under the rule, apparel that is eligible for duty-free treatment under a free trade agreement must be sewn from fabric woven from yarn spun in the country or countries covered by the agreement. The restriction often makes apparel ineligible because all of the materials and inputs that go into a garment are not always available from the affected nations.

U.S. apparel and textile makers have supported the yarn forward rule and other restrictive rules on apparel trade under the claim that they protect U.S. jobs. But NRF has countered that most of the apparel products in question are no longer made in the United States, so the restriction merely drives up prices while doing little or nothing to create jobs. In addition, the yarn-forward rule has failed to generate significant new trade and investment in textiles and apparel under other free trade agreements, including increased exports of U.S. yarns and fabrics. Finally, only a comparatively small percentage of the value of any given piece of merchandise goes to the factory where it is made, with the majority of the price going to U.S. designers, marketers and others along the supply chain.



“We urge U.S. negotiators to move the ball forward and to work with industry to develop a new and flexible proposal that would jumpstart the negotiations and spur new trade and investment in apparel,” said Julie Hughes, President, U.S. Association of Importers of Textiles and Apparel.