U.S. Trade Policy Update
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1 U.S. Trade Policy Update Gail W. Strickler Assistant U.S. Trade Representative Kim Glas Deputy Assistant Secretary for Textiles and Apparel USA-ITA ANNUAL MEETING July 20, 2011
2 AGENDA TPP Report Trade Updates CAFTA Fixes & Sourcing Directory MAGIC Show You re Invited! Short Supply NEI and the Industry
3 Trans-Pacific Partnership (TPP) Will greatly expand market access for U.S. companies Will boost exports, critical to retaining and creating jobs in the U.S. Risks of standing still: Competitors entering trade agreements Erosion of U.S. market share in Asia High tariffs faced by U.S. exporters
4 TPP: A 21 st -Century Agreement that Promotes Jobs and Sourcing Opportunities Labor and Environmental Provisions Promotes trade and investment among member countries; ensure benefits are shared among signatories Forward-looking agreement with aims of future expansion to other partners in the region
5 TPP: A 21 st -Century Agreement that Promotes Jobs and Sourcing Opportunities Round Eight: Chicago, USA September 7-14, 2011 Please remain engaged with us Though you may not agree with yarnforward rules of origin it is helpful to offer specific product information to advance your positions incrementally
6 TPP: New Markets for U.S. Yarn & Fabric From U.S. yarn exports increased by over 42% In many instances, FTAs have lead to increased yarn and fabric exports during this period, for example: U.S. yarn exports to DR-CAFTA partners have increased from $189 million to $1.5 billion; fabric exports grew from $571 million to $1 billion U.S. yarn and fabric exports to Peru increased from $6 million to $16 million U.S. fabric exports to Singapore increased from $40 million to $50 million
7 TPP: New Markets for U.S. Yarn & Fabric For the U.S. textile industry TPP potentially offers significant new opportunities U.S. yarn exports to Vietnam increased from $1 million to $16 million from Exports are up 49% in year-to-date trade for 2011 U.S. fabric exports to Vietnam increased from $4 million to $21 million during the same period U.S. fabric exports to Malaysia increased from $11 million to $36 million from
8 $25 U.S. Yarn and Fabric Exports to Vietnam, Millions of Dollars Source: U.S. Department of Commerce, Office of Textiles and Apparel $20 $15 $10 $5 Yarn Fabric $ $40 $35 $30 $25 $20 $15 $10 $5 $0 U.S. Yarn and Fabric Exports to Malaysia, Millions of Dollars Source: U.S. Department of Commerce, Office of Textiles and Apparel Yarn Fabric
9 The Importance of Knowing Your Supply Chain Recent Greenpeace Report links well-know companies with polluting factories in China Chinese textile plants leaking hazardous effluent in the Pearl and Yangtze River Deltas Hormone disrupting chemicals and other toxins found in major water systems
10 Trade Updates Egypt Morocco MENA Pending FTAs + TAA Jordan Haiti AGOA DFQF
11 Pending Trade Legislation The Administration supports the passage of: U.S.-Colombia Trade Agreement U.S.-Panama Trade Agreement U.S.-South Korean Trade Agreement Trade Adjustment Assistance (TAA) Every $1 billion in new exports of American goods supports more than 6,000 additional jobs at home TAA is part of a balanced trade agenda that recognizes the tough reality of trade for some Americans
12 Jordan Reports of alleged sexual abuses at Classic Apparel Ltd factory in Amman The U.S. government is closely monitoring the situation to ensure that the case proceeds through the proper channels within the criminal justice system and that the case is investigated in a thorough manner We hope that brands will also monitor this situation closely, in order to ensure that worker rights are upheld and such abuses do not take place in factories closely associated with US companies
13 Haiti HELP continues to draw interest to sourcing in Haiti New investments in industrial parks will increase capacity Better Works Haiti Haitian apparel Pavilion at MAGIC
14 AGOA Rep McDermott recently introduced H.R to extend the Third-Country Fabric Provision through 2015 Currently set to expire in September 2012 Extending the provision in advance of its current expiration will provide certainty to buyers and hopefully lead to continued and increased sourcing in the region Bill also extends AGOA eligibility to the Republic of South Sudan
15 Duty-Free Quota-Free The U.S. has always discussed DFQF in the context of an ambitious Doha outcome; we cannot divorce a critical issue from its original context The U.S. will continue to work towards meaningful market access opening by all major players DFQF for Bangladesh and Cambodia in particular could be very disruptive to current U.S. preference partners and developing country partners under existing U.S. FTAs Until new market opportunities are achieved, we believe targeted preference programs provide the most even playing field for accomplishing development goals
16 CAFTA-DR Update: 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
17 CAFTA-DR Sourcing Directory USTR, CAFTA-DR countries and the IDB are creating a regional sourcing directory for textiles and apparel. Users will be able to search this online directory for companies that fit their criteria. Textile and apparel importers will benefit from having information on production along the entire supply chain. Goal: to grow regional trade by building bridges between buyers and producers.
18 CAFTA-DR Sourcing Directory
19 Template that will guide site developers
20 Mock-up of top page
21 Companies will enter their info
22 Users will search for companies
23 Searches will return company entries
24 CAFTA-DR Sourcing Directory Next Steps: Update based on industry input Present beta site at the MAGIC show August 21-24, 2011
25 Endorsees of the MAGIC Show!
26 MAGIC SHOW: BE THERE! WHERE: Las Vegas, NV WHEN: August 21-24th WHAT: Join us for the Western Hemisphere Summit with over 60 booths within Americas Pavilion showcasing diversity in product in the region. WHO: Brands, retailers, manufacturers, associations, and government officials
27 MAGIC SHOW The New Western Hemisphere Supply Chain YOU RE INVITED!!! Invitation-only discussion with retail senior executives about sourcing opportunities in the Americas Speakers include: Under Secretary Francisco Sanchez Ken Mangone, JCPenney Lorne Cytrynbaum, The Men s Wearhouse
28 Itinerary of Events MAGIC in the Americas Reception 4:00 PM 6:00 PM Directly following the Sourcing Summit in the America s Pavilion. National Export Initiative & Sourcing in the Americas Seminar MONDAY, AUGUST 22 nd 10 AM For more information on the summit, go to our website at or contact Julie Hughes!
29 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. 29
30 (Billions of Dollars) U.S. Exports of Textiles and Apparel $19.7 billion in exports of U.S.-made textiles and apparel in percent of U.S. exports are to our FTA partners in the Western Hemisphere: NAFTA and CAFTA-DR Source: Office of Textiles and Apparel, Export Market Report. 30
31 Top 10 Markets for U.S. Exports of Textiles and Apparel Ranked by 2010 Value ($Billions) Country % change Canada $4.0 $ Mexico $3.6 $ Honduras $1.1 $ China $0.884 $ Dominican Republic $0.581 $ Japan $0.517 $ United Kingdom $0.449 $ El Salvador $0.378 $ Belgium $0.371 $ Korea $0.273 $ World $16.6 $ Source: Office of Textiles and Apparel, Export Market Report. 31
32 (Billions of Dollars) U.S. Imports of Textiles and Apparel $93.3 billion in U.S. imports of textiles and apparel in 2010 India, Vietnam, CAFTA-DR, NAFTA and China together account for almost 70% of U.S. imports of textiles and apparel. Source: Office of Textiles and Apparel, Major Shippers Report. 32
33 Leading Textiles and Apparel Shippers to U.S. Ranked by 2010 Value ($Billions) Country % change China $31.8 $ Vietnam $6.2 $ India $4.6 $ Indonesia $4.0 $ Mexico $4.1 $ Bangladesh $3.5 $ Pakistan $2.8 $ Honduras $2.0 $ Cambodia $1.9 $ El Salvador $1.3 $ World $81.0 $ Source: Office of Textiles and Apparel, Major Shippers Report. 33
34 Commercial Availability CAFTA-DR and Peru Additional Process - Fast/streamlined process: business days - Products determined to be unavailable are added to List, can be sourced in 3 rd countries and used in qualifying articles Proceedings to date: - Australia, 1 request/1 approval/1 product, implementation pending - Bahrain, 1 request pending - CAFTA-DR, 74 requests/67 approvals/137 products - NAFTA, 22 requests/12 approvals/12 products - Peru, no requests to date - Singapore, 3 requests/2 approvals/11 products
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37 Thank You Gail Strickler AUSTR for Textiles Kim Glas DAS for OTEXA
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