Senators, retailers urge more flexible apparel rules in Asia-Pacific deal

“There is now strong bipartisan and bicameral support for more progressive and realistic rules-of-origin standards in the TPP negotiations and other trade agreements that are more consistent with the administration’s goal of making the TPP a 21st-century trade agreement,” he said. 

Talks between the nine nations — United States, Malaysia, Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam — continue next week in Dallas. Trade officials have said they would like to complete the deal this year. Japan, Canada and Mexico are seeking entry into the talks. No decisions have been made on that front.

The Senate letter follows one sent in October by 30 bipartisan House lawmakers to U.S. Trade Representative Ron Kirk urging the United States to reconsider its support for restrictive rules limiting textile and apparel trade based on the so-called “yarn-forward” rule of origin.

The yarn-forward rule governs whether apparel can be eligible for benefits provided by a free trade agreement. Eligibility depends on all materials used in the production of a garment. The materials must be from the countries covered by the agreement. 

But many apparel-producing countries, including those in the TPP talks, do not have significant yarn and fabric production, making the requirement nearly impossible to meet, retailers argue.

“Some of the highest in U.S. tariffs are on apparel,” said Sandy Kennedy, president of RILA. “These duties inhibit job growth, rather than foster it, and the TPP provides a unique opportunity to create a new framework that will facilitate trade and investment in the TPP region.”

In 2010, U.S. tariffs on clothing and home linens from the TPP countries were just under $1.2 billion, accounting for about 68 percent of the total U.S. tariffs collected from those countries last year. 

“Therefore, we believe that U.S. negotiators should reconsider the current approach to apparel in the TPP by promoting flexible rules of origin and meaningful market access that maximize the incentive to grow U.S. exports and U.S. jobs in a wide variety of sectors,” the senators wrote. 

The current U.S. proposal on rules of origin takes an overly broad approach in advocating a yarn-forward position in nearly all apparel products, the letter said. 

“According to our understanding of the U.S. proposal, it would require originating yarns, fabrics, sewing thread and other inputs for all apparel products, even if there is insufficient availability of quality inputs and a reliable supply chain within TPP countries,” the senators wrote. 

NRF contends that trade rules should recognize that 98 percent of apparel sold in the United States is sewn outside the country. 

“The U.S. trade representative should immediately heed congressional calls to reform these anti-free trade restrictions in the TPP, and reaffirm the nation’s commitment to free and open trade,” Autor said. 

“The Senate action is a strong signal to the president and the USTR that Congress will support administration efforts to advance more flexible textile and apparel standards that will actually promote, rather than hinder, new trade and investment under this agreement.”

The letter signers were: Sens. Mark Warner (D-Va.), Dianne Feinstein (D-Calif.), Ron Wyden (D-Ore.), Kay Bailey Hutchison (R-Texas), Charles Schumer (D-N.Y.), John Boozman (R-Ark.), Kirsten Gillibrand (D-N.Y.), Ron Johnson (R-Wis.), John Cornyn (R-Texas), John Thune (R-S.D.), Roy Blunt (R-Mo.), Patty Murray (D-Wash.), Mike Johanns (R-Neb.), Maria Cantwell (D-Wash.) and Jerry Moran (R-Kan.).