Singapore Trade Agreement May Include Strict Rule Of Origin For Textiles
James A. Morrissey, Washington Correspondent
By James A. Morrissey, Washington CorrespondentU.S. government trade officials are supporting a "yarn forward" rule of origin in a proposed U.S.-Singapore Free Trade agreement, a move that pleases U.S. textile manufacturers but gives importers and overseas exporters heartburn. The rule of origin would be similar to that of the North American Free Trade Agreement (NAFTA), which requires products benefiting from the free trade pact to be made with yarn and fabric in the participating nations. It is designed to help the U.S. textile industry and guard against transshipments of apparel where the yarn or fabric may be made in another country. The U.S. Association of Importers of Textiles and Apparel has told the U.S. Trade representative that a NAFTA-like rule of origin for Singapore would be "inappropriate" and said, instead, a "substantial transformation standard" with a 35-percent value-added requirement would make more sense. The Singapore Free Trade Agreement is particularly significant, since the U.S. Trade Representative has announced plans to expand it to include Indonesia.