In advance of the March Trans-Pacific Partnership (TPP) negotiations in Australia, the U.S. Trans-Pacific Partnership Apparel Coalition and the Peruvian Associación de Exportadores (ADEX) sent a joint letter on behalf of U.S. and Peru apparel producers, retailers and brands to Minister Silva of Peru and U.S. Trade Representative Ron Kirk urging TPP negotiators to eliminate the "yarn forward" rule of origin on apparel. NAFTA's yarn-forward rule holds that yarn used in fabrics must be produced in a NFTA country.
"Now is the time to revisit rules on a key component to a successful TPP - the trade rules on 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 The yarn-forward style rule of origin is outdated and unworkable and does not reflect the commercial realities of global value chains," said Julie Hughes, president of the U.S. Association of Importers of Textiles and Apparel.
"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. We call on the U.S. and Peruvian negotiators to maximize the potential in the TPP by recognizing the need for simple and flexible rules of origin for apparel," said Sandy Kennedy, president of the Retail Industry Leaders Association.
After ten negotiating rounds, the TPP talks continue at a positive rate and steady progress was made during the last negotiating round in December. The next full TPP negotiating round is expected in March 2012 in Australia.
Click here to view the coalition's position paper.
