U.S. & Peruvian Businesses Want Simple and Flexible Rules of Origin in TPP Agreement

Washington, DC –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 negotiation of a 21st century Trans-Pacific-Partnership (TPP) agreement. The TPP can only meet that definition if it eliminates the burden of a “yarn forward” rule of origin on apparel.

The letter demonstrates that U.S. and Peruvian industries agree that is it time to modernize apparel trade rules and move away from unworkable and outdated rules that limit trade and investment in apparel.

“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 The yarn forward style rule of origin is outdated and unworkable and does not reflect the commercial realities of global value chains,” said Julie Hughes, President of the U.S. Association of Importers of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.

When considering ways to create new opportunities in the TPP for apparel, it is important to keep in mind the value and jobs created throughout the entire apparel global value chain. A global value chain includes the full range of activities that firms and workers do to bring a product from concept to the final customer. This includes the manufacturing, design, production, marketing, distribution, retail and support to the final customer.

“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.