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U.S. and Peruvian industries agree that is it time to modernize apparel trade rules and move away from unworkable and outdated rules that limit trade and investment in apparel.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 The yarn forward style rule of origin is outdated and unworkable and does not reflect the commercial realities of global value chains,” said Julie Hughes, President of the U.S. Association of Importers of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.

After ten negotiating rounds, the TPP talks continue at a positive rate and steady progress was made during the last negotiating round in December. In November 2011, the TPP Heads of State announced the broad outlines of a TPP agreement during the Asia-Pacific Economic Cooperation (APEC) leaders’ summit. TPP leaders also agreed that they would try to substantially finish the talks by July 2012, with tough issues and a legal review to follow in the second half of 2012. The next full TPP negotiating round is expected in March 2012 in Australia.

In September 2011, the Chairman of the Senate Finance Subcommittee on International Trade, Customs and Global Competitiveness, Ron Wyden (D-OR), sent to U.S. Trade Representative Ron Kirk a detailed letter on why he believes the TPP negotiators should reject yarn-forward rules of origin for apparel in the TPP.

In October 2011, thirty bipartisan Members of the House of Representatives sent a letter to USTR Kirk urging the United States to adopt a new approach on apparel trade in the TPP agreement.

To view the TPP Apparel Coalition position paper, visit the TPP Apparel Coalition Web site at http://www.tppapparelcoalition.org/.

Trans-Pacific Partnership
The TPP is an Asia-Pacific regional trade agreement currently being negotiated among the United States and eight other partners -- Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam.

American Apparel & Footwear Association
The American Apparel & Footwear Association (AAFA) is the national trade association representing apparel, footwear and other sewn products companies, and their suppliers, which compete in the global market. AAFA's mission is to promote and enhance its members' competitiveness, productivity and profitability in the global market by minimizing regulatory, commercial, political, and trade restraints.

Associacion de Exportadores
ADEX is an important support since 1973 for business in Peru. Being a member of ADEX gives a strong support to face successfully the challenge that Foreign Trade involves, it ranges from identification of new markets to technical support, contacts abroad, commercial intelligence and even having the most complete training for your new staff. ADEX brings together the main Peruvian Exporters grouped in 24 Sectorial Committees, with the Apparel Committee as one of the most powerful and dynamic areas because we have the main Peruvian exporters as members. This shows our strong position and opinion in the Peruvian market in this sector.

National Retail Federation
As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s Retail Means Jobs campaign emphasizes the economic importance of retail and encourages policymakers to support a Jobs, Innovation and Consumer Value Agenda aimed at boosting economic growth and job creation.

Outdoor Industry Association
Outdoor Industry Association® (OIA) is a national trade association whose mission is to ensure the growth and success of the outdoor industry. OIA provides trade services for over 4000 manufacturers, distributors, suppliers, sales representatives and retailers in the outdoor industry. OIA programs include representation in government/legislative affairs, market and social research, business-to-business services and youth outreach initiatives. Educational events include the annual Rendezvous, Outdoor University, and the Capitol Summit. Outdoor Industry Association is based in Boulder, Colorado, and is the title sponsor of the Outdoor Retailer tradeshows. For more information go to outdoorindustry.org or call 303.444.3353.

Retail Industry Leaders Association
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

United States Association of Importers of Textiles and Apparel
The United States Association of Importers of Textiles and Apparel (USA-ITA) was established in January 1989 by nine companies with a vision to create a unified voice for textile and apparel importers across the country. USA-ITA provides education, information, and advocacy to executives active in textile and apparel sourcing, importing, compliance, and logistics. Headquartered in Washington, D.C., USA-ITA represents the needs of American retailers, brands and importers, as well as related service providers, with the objective to remove barriers to business and to trade.

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