New Flat Charge Laminator Is ‘Flat-out’ Fast In Producing Long Composite Wind Parts

December 2009 – The new Flat Charge Laminator (FCL) from MAG Industrial Automation Systems is ideal
for automated, high-production lay-up of composite spars, beams, stringers and similar parts for
wind-blade manufacture. The highly repeatable system drastically reduces labor, while improving
part quality, productivity and consistency. With four heads dedicated to four different materials,
the servo-controlled machine produces constant- or variable-thickness laminates on a segmented
vacuum table, compacting the layers with a force of 13.6 to 136 kg (30-300 pounds). The FCL handles
0/90 prepreg fabric, +/- 45 prepreg fabric, unidirectional tape and, as an option, foil or film.
Maximum material width is 300 mm (12 inches) on rolls up to 635 mm (25 inches) diameter and
weighing up to (150 pounds).   

The machine features four servo-controlled dispensing heads on a placement carriage that
moves on rails integrated with the vacuum bed. The servo-powered placement carriage is driven by
rack-and-pinion system.     

A Siemens PLC precisely controls the entire process, with speed and position feedback from
rotary and linear encoders on dispensing heads and placement carriage. The servo-driven supply
reels are protected with a magnetic clutch override, and the backing paper take-up system is torque
controlled. A stylus cutter cuts prepreg at 90 degrees, without cutting the backing paper. The
minimum course length is 300 mm (12 inches), and multiple short courses can be put down on the same
ply.   

Options include hot-air heating, tape flaw detection, foil/film feeder, edge tracking, CATIA
software interface, and a semiautomatic load/unload turret for the heads.

About MAG

MAG is a leading machine tool and systems company serving the durable-goods industry
worldwide with complete manufacturing solutions. The company offers a comprehensive line of
equipment and technologies including process development, automated assembly, turning, milling,
automotive powertrain production, composites processing, maintenance, automation and controls, and
core components. Key industrial markets served by these technologies include aerospace, automotive
and truck, heavy equipment, oil and gas, rail, solar energy, wind turbine production and general
machining. With manufacturing and support operations strategically located worldwide, MAG ranks as
a leader in the capital equipment market. A growing number of leading international companies are
relying on the impressive innovation power of MAG to assure their technological leadership and
prepare for future challenges.For more information about MAG, please visit:
www.mag-ias.com

Press Release Courtesy of MAG Industrial Automation Systems

December 8, 2009

The Rupp Report: How To Protect Your Ideas

The other day, it was on the news that Germany alone is losing 60 billion euros every year due to
copied products. Some people think product piracy and espionage is a recent invention of Asian
people. Certainly not, if one takes a look back in the history books.



The First Economic War


The Industrial Revolution started in the 19th century, notably in the textile industry.
Brilliant English inventors developed new machines — not only power and steam machines, but also
equipment especially for the textile industry, such as the first spinning machines. Soon after
that, the first true economic war started between the British Empire and the Continent.
Industrialists from the Continent paid a lot of money to get the plans and ideas for the machinery.
This went on and on until World War II.

New Competitors

After World War II, the textile industry changed drastically. It all started with
international development plans for so-called Third World countries, and sewing machines were the
“starter drug.” Asian countries — above all, Hong Kong — started booming, thanks mainly to
garment manufacturing. People from Hong Kong and other Asian countries were not welcomed at
international fabric shows such as Interstoff in Frankfurt. The top weapons were scissors to cut
and steal the fabric samples. They were sent to Asia and copied, and came back as — in those times
– very bad fakes.

Then Hong Kong lost its first place to Japan, especially for textile machinery. Every person
in the textile machinery industry looks back with shudders to old ITMAs in Europe, when
Asian-looking people often carried cameras into booths, or were found underneath the machines,
drawing the constructions.

Fake Or Not?

But the biggest problem in the textile industry was and is the copying of apparel. Since the
1960s, the volume of copied apparel has skyrocketed. The textile industry in the West declined
dramatically — we all know the story. The fakes became better and better. And many people today
say the fakes are not copies anymore — they were produced during the ghost shift, without paying
the necessary franchise costs.

The losses due to counterfeit products are colossal for the original owner. Everybody in this
industry knows the costs of creativity. It takes a lot of people to be a successful player. That’s
why the industry in general, and top brands in particular, started to protect themselves. Special
marks, hidden bar codes, and even sewn-in chips allow the manufacturer to protect its garments in
one way or another and to trace their origins. Customs officers are working together, and fakes
often are destroyed in airports before they enter the markets. And, the end of the story is not yet
written.

This might be okay for apparel. But, some time ago, a narrow-fabric weaver asked me how he
could protect his inventions. “How can I insert a label or something else in my ribbons?” he asked.
“I don’t know,” I said, “but I can ask our global readership.” Do you know an answer to that
question? If yes, please let me know by writing to
jrupp@textileworld.com.



December 1, 2009

Congressional Group Urges New Approach To Global Trade

As leading trade ministers gathered in Geneva this week to discuss future activities of the World
Trade Organization (WTO), the bipartisan House Trade Working Group called for a “new direction in
United States trade policy” that puts more emphasis on reciprocity.

The congressional group said this week’s meetings “present a tremendous opportunity to help
reshape the WTO and move the United States toward a new trade policy.”

Calling the meetings “a timely and useful exercise,” Pascal Lamy, director-general of the
WTO, expressed hope that the trade ministers would provide guidance as to how they see the stalled
Doha Round of trade liberalization negotiations can move forward. In his opening remarks, Lamy
said, “Progress has been made on a range of technical issues across the board on the so-called ‘big
ticket items’ which needs to be accelerated.”

US Trade Representative Ron Kirk, who is heading up the US delegation, said he is attending
the conference “for one simple reason – to help create more market opportunities for American goods
and services.”

At a news conference prior to the opening of the ministerial meetings, Rep. Mike Michaud,
D-Maine, one of the leaders of the trade group, said: “Those of us in Congress who have supported
reforming our trade policies believe the current Doha Round is bad for the United States. Instead
of expanding the WTO model and its proven damage further, we need to turn around this agenda and
make trade work for all nations.”

The Doha Round, initiated in 2001, has been bogged down because of major differences between
the developed and developing nations on tariff-cutting and market access issues. US textile
manufacturers have insisted that tariff reductions be reciprocal and that there should be sectoral
negotiations, so textiles and apparel can be considered separately from  other commodities and
not be used for trade-offs.

In order for the United States to be involved in future Doha Round negotiations, the
President’s Trade Promotion Authority, which has expired, must be renewed. The National Council of
Textile Organizations has two objectives in connection with the renewal: maintenance of US textile
and apparel tariffs; and some sort of a China safeguard mechanism.

The House Trade Working Group is supporting two pieces of legislation pending in Congress
that are designed to reshape the US government’s trade policies.

One, the Reciprocal Market Access Act, is designed to ensure that US trade negotiators
achieve meaningful market access for US products. It requires the President to provide a
certification to Congress in advance of agreeing to any modification of an existing duty on any
product for which reciprocal market access has been obtained. It also gives the US government the
right to automatically revoke any concessions if a trading nation does not live up to its
commitments.

A second measure supported by the trade group, simply known as the Trade Act, requires the
Government Accountability Office to conduct a comprehensive review of the major pacts, such as the
North America Free Trade Agreement (NAFTA), the Central America-Dominican Republic FTA (CAFTA-DR)
and various WTO agreements and report to Congress on whether these agreements live up to certain
standards, including labor and human rights protection, safety, environmental considerations and
national security. The bill would prohibit any ban on Buy American and anti-sweatshop measures. It
would create a “Super Committee” chaired by the leadership of the House Ways and Means Committee
and the Senate Finance Committee to work with the President on formulating negotiating plans. 
It also would replace the President’s Trade Promotion Authority, also called Fast Track negotiating
authority, with an approach that gives Congress authority prior to negotiating any new agreement to
establish mandatory negotiating objectives and ensure that they are met by trading partners.



December 1, 2009

NEI Introduces Coating Formulation Featuring Nanoscale Additives

Somerset, N.J.-based NEI Corp. — a developer, manufacturer and distributor of nanoscale materials
for a wide range of industries — has developed a silicone-based fabric coating featuring nanoscale
additives. The coating was applied using traditional processing techniques to fabrics including
woven fiberglass and Vectran® fiber fabrics, and NEI reports the resulting high-performance fabrics
exhibit enhanced thermal and barrier properties, as well as improved mechanical properties such as
peel and tear strength when compared to fabrics treated with a traditional coating formulations.
Developed through a National Aeronautics and Space Administration Small Business Innovation
Research program, the coatings were then tested through a collaboration between NEI and Frederica,
Del.-based ILC Dover, a developer of engineered softgoods products for defense, aerospace and
commercial applications. The pilot program was scaled up, and prototype airbags were created.
According to leakage tests performed by ILC Dover, the 18-inch spherical airbags exhibited greater
gas retention capabilities when compared to a control group of standard airbags.

According to NEI, applications including safety inflatables such as airbags, hot-air
balloons, cold-air inflatables, boat sails, paragliders and parachutes all can benefit from the
enhanced durability, lower weight and reduced gas permeability properties conferred to the fabric
by the nanotechnology-enabled silicone coating.

“The success of this project can be traced to our core competency in synthesizing and
functionalizing nanoscale materials targeted at specific applications,” said Kenneth Eberts, Senior
Product Development Engineer, NEI Corp.

December 1, 2009

ITMA Celebrates 60 Years, Exhibition Space Application For ITMA 2011 Now Available Online

Companies planning to exhibit at the 60th anniversary edition of ITMA, to be held Sept. 22-29,
2011, in Barcelona, Spain, now can download an application form to reserve show space at the show’s
website,
www.itma.com. ITMA 2011, under the slogan “Master the Art of
Innovation,” is expected to showcase more than 1,400 exhibitors in more than 100,000 square meters
of exhibition space. The event will take place at Barcelona’s Fira de Barcelona Gran Via
Fairground, a location just minutes away from the city center.

“We are looking forward to the next show in 2011, and believe the city of Barcelona will also
attract a great number of buyers from the established and rapidly emerging markets of Central and
South America because of its historical, linguistic and cultural links with these countries,” said
Johann-Philipp Dilo, president, Dilo Group.

In honor of its 60th anniversary and to attract quality visitors to the event, show owner and
organizer the European Committee of Textile Machinery Manufacturers (CEMATEX) and co-organizer
Singapore-based MP International Pte. Ltd. are arranging various events surrounding the show
including: ITMA awards for top industry achievers; ITMA Forum and targeted workshops; and an
augmented Research and Education Pavilion. CEMATEX also announced changes to the Index of Products.
Embroidery and Braiding equipment will be featured in their own separate sectors, and the
garment-making and textile-processing sectors have been expanded.

“We are supporting the vision with a wide range of initiatives that will bring both buyers
and sellers to this leading-edge platform,” said Sylvia Phua, CEO, MP International. “For a start,
we are working very closely with our industry partners, especially trade associations worldwide.”

To ensure global participation at the exhibition, MP International is working with the nine
member associations of CEMATEX — Association of Italian Textile Machinery Manufacturers, Belgian
Textile Machinery Association, British Textile Machinery Manufacturers Association, French Textile
Machinery Manufacturers Association, German Engineering Federation Textile Machinery Association,
the Netherlands-based Groep Textielmachines, Spanish Textile Machinery Association,
Switzerland-based Swissmem and Textile Machinery Association of Sweden — as well as the American
Textile Machinery Association, China Textile Machinery Association, Japan Textile Machinery
Association, Korea Textile Machinery Association and Taiwan Association of Machinery Industry.
Companies in India, Turkey and South America also will be able to work with an ITMA dedicated sales
agent to get help participating in the show.

“ITMA is quite simply a ‘one-stop-shop’ which attracts leading buyers from all over the world
and from all areas of the textile industry, including the important nonwovens and technical
textiles sector,” Dilo added.

December 1, 2009

Aurum Organic Becomes First US Fully Certified Organic Apparel Company

Burlington, Vt.-based organic cotton clothing manufacturer Aurum Organic Klothing LLC has announced
it is the first company in the nation to achieve full organic apparel certification. Aurum
Organic’s clothing has been certified to the Global Organic Textile Standard (GOTS) by the
Institute of Marketecology, demonstrating that all raw materials are organic and the chemical
inputs and processes used to produce the goods pose no threat to the environment. All of Aurum
Organic’s clothing has met either the Organic Exchange’s OE 100 Standard for fiber traceability of
100-percent certified organic cotton; or the OE Blended Standard for fiber traceability of products
comprising a minimum of 5-percent organic cotton.

Aurum Organic manufactures its apparel — made with US Department of Agriculture Certified
Organic Cotton — in India at a GOTS-certified facility that uses wind, water and wood power for
its operations. Once the apparel arrives in the United States, Aurum decorates the clothing at its
GOTS-certified screen-printing facility in New Bedford, Mass., using GOTS-certified water-based
inks.

Aurum Organic also has created its own Carbon Neutral Program for end-use customers. Through
Chicago-based Carbon Neutral Clothing™, an independent third-party certifier, the company
calculates a manufacturer’s carbon footprint from cotton growing through manufacturing and
distribution in the United States. Customers can then choose carbon offset providers to team with
— such as NativeEnergy Inc.; The Carbon Trust, England; and Portland, Ore.-based Bonneville
Environmental Foundation — to build renewable energy projects, which are explained on the
apparel’s custom hang tags made from recycled, seed or stone paper.

Aurum Organic’s current apparel line includes men’s, women’s and toddlers’ short-sleeve
T-shirts as well as infant rompers. The company expects to add microthermal and fleece garments to
the product line in the future.



December 1, 2009

VitaFlex Debuts Latex-free Elastic Nonwoven Fabrics And Products

VitaFlex LLC, an affiliate of Burlington, N.C.-based upholstery fabrics manufacturer and
distributor Burlington Technologies Inc. (BT), has established operations in BT’s Pioneer Plant and
has begun manufacturing an innovative latex-free elastic nonwoven fabric that it will convert into
disposable, recyclable products for medical, pharmaceutical, clean-room, paint and construction,
food-processing, aerospace and other markets. The new company plans to hire approximately 100
employees over the next year.

The new material is based on patented, proprietary technology developed by Dr. De-Sheng Tsai,
the company’s president and chief scientific officer, who previously was a research fellow at
Wilmington, Del.-based DuPont, and who prior to that position had founded two companies in Taiwan.
According to VitaFlex, the technology offers inherent elasticity, breathable barrier
characteristics and conformability; and provides a superior, more cost-effective and
environmentally friendly alternative to traditional elastic nonwoven materials that have latex or
elastomeric polymer components added to them. In addition, VitaFlex products will be produced and
packaged entirely in the United States, whereas most competitive products are produced abroad.

“VitaFlex is a very strong addition to our platform of fine companies, which include
Burlington Manufacturing Services, Se7en Upholstery fabrics, and our other affiliate, Diagnostic
Chips,” said Robert Sills, chairman, BT. “We are very pleased to be providing some much needed
employment for the fine people of Alamance County, Burlington and the surrounding areas.”

The first end-product featuring VitaFlex technology will be a triple-layer, soft-stretch,
form-fitting hood for the paint and construction industry. Packaged two to a bag, the hoods will be
released onto the market in January 2010, according to Susan Heaton, the company’s director of
sales and marketing.

December 1, 2009

ČEZ Group, Elmarco Are First To Test Special Solar Panels Containing Nanofibres

Prague, November 2nd, 2009 – Power-producing group ČEZ and ELMARCO have launched a co-operative
project, with the aim to establish economically favourable solar panels, which are the first in the
world using nanofibres to produce energy. The first stage embodies in testing these panels in
effective conditions and comparison of output by conventional silicon panels and the new
“nanofibrous” ones based on the technology developed by ELMARCO. Concurrently, both the partners
intend to prove the economic profitability of this new way of “green energy” production.

Owing to co-operation of the ČEZ Group and the ELMARCO company, which is the world-class
supplier of industrial scale nanofibre production equipment and pioneer in nanofibre applications
in all spheres of human life, the new types of solar panels using nanofibres for solar energy
collection and its conversion to electric power were installed in the premises of nuclear power
station Temelín.

“Till now, nowhere in the world were nanofibres used for this particular type of solar
panels. Therefore, in order to test their effective functionality, we choose the combination of
both silicon and nanofibrous solar panels in one place. They were installed facing all four
cardinal points, i.e. not only south, as it is usual by conventional silicon panels. This allows us
to compare the behaviour of both conventional and nanofibrous panels in various light and
temperature conditions,” Ladislav Mareš, ELMARCO Executive director, stated.

For the ČEZ Group, the project forms a part of its research, development and testing of new
power-producing technologies. “We anticipate that, owing to its flexibility, this new type of
panels could be applied as a part of building structures. Due to their physical characteristics,
these panels bid fair to be successfully used even in such light conditions when silicon cells
operate with difficulties. If the nanotechnology based panel production is even cheaper in
comparison with conventional silicon cells, then it should be a break-through,”Aleš Laciok, ČEZ, a.
s Research and Development Coordinator, stated.

Unique technology of the most advanced DSSC panels is based on exploitation of inorganic
nanofibrous materials made with the NanospiderTM technology, a worldwide proprietary of ELMARCO.
The new type of nanofibrous solar panel recently forming a base of mutual project of ČEZ Group and
ELMARCO had its world premiere during this year’s world summit Nanofibers for the 3rd Millennium –
Nano for life in Prague.

About the ČEZ Group

Being the major national electricity producer, the ČEZ Group plans to invest the amount in
full 30 billion CZK to renewable energy sources development within the next 15 years. The
objectives of ČEZ Group concerning the field of production capacities expansion from renewable
sources are directly related to the objective of the Czech Republic, to produce totally 13,5% of
its energy from renewable sources up to the year 2020, according to the Climate and Energy Package
of EU.They are in compliance with the Future motion vision as well, which is to proclaim an
intention of ČEZ Group to invest in new technologies enabling to produce, distribute and use
electric power more effectively and environment-friendly in future.

Martin Schreier

ČEZ, a. s.

martin.schreier@cez.cztel

211 042 612, 725 765 848

About Elmarco s.r.o.

Globally, ELMARCO s.r.o. is the industry’s first supplier of industrial scale nanofibre
production appliances.Partnerships with global industrial leaders and foremost universities form
the foundations of success of the company.The unique NanospiderTM technology developed by ELMARCO
is designed to accomplish all demands in producing the highest quality nanofibres to versatile
applications.The appliance qualities including ease of use, scalability and modularity according to
the customer’s requirements, and flexibility are highly respected; due to them, ELMARCO has
succeeded at the world market. For more information, please visit
www.elmarco.com.

Eva Kijonková

ELMARCO, s. r. o.

eva.kijonkova@ek-media.comtel

596 242 103, 721 857 097

Press Release Courtesy of Elmarco

November 2, 2009

The Rupp Report: Show Me Your Flag

It was quite peculiar when I recently mentioned that I will attend a press conference. “Why?”
people asked. This reaction was pretty amazing to me. This company probably wants to show it is
still around and its people do their homework: research and development resulting in new or
enhanced products for the industry — and, last, but not least, to be ready when the upswing will
truly start. Admittedly, this conclusion was only a guess; however, why not?

So I drove to Sargans, Switzerland, to visit Stäubli AG and realized that the company not
only invited the media but also people from the local authorities. And, yes, the event started as
expected: The management welcomed all attendees and mentioned that they want to show their will and
the ability of the company to carry on work even in a difficult market environment. This seemed to
be a clever move because not only is the market suffering, but the workforce as well. Information
is motivation.

Flexibility

But let’s have a look at the event’s technical news: The weaving preparation process was for
centuries one of the most time-consuming in a weaving mill. With the start of the electronic era,
this situation improved greatly. Old-fashioned jobs disappeared. However, drawing-in and tying
remained. Also here, advanced systems were needed. Today, modern weaving mills around the world
recognize the benefits of automatic drawing-in and tying machines. Availability, productivity and
flexibility of these machines are excellent, and the high quality of automatically drawn-in warps
are a prerequisite for successful weaving.

Drawing-in Machine

Stäubli, one of the market leaders in this sector, presented its Safir upgraded automatic
drawing-in machine. The system can be configured to draw in one or two warp beams with up to eight
thread layers each. A camera system checks the yarn to be drawn in during each cycle, ensuring that
no double or wrong-color yarns will be processed.

The great operational flexibility also relates to the weaving harnesses that can be used.
Virtually all heddles used in shaft weaving can be handled without restriction. In the maximum
configuration, heddle distribution is programmable on up to 28 frames. Another special feature is
the processing option of using two different types of drop wires for the same weaving harness. This
application is especially interesting for double-beam weaving such as for terry fabrics. With its
virtually unrestricted application potential, and user-friendly ergonomics and convenient operation
mode, Safir seems to be a big step ahead.

Warp-tying Machine

The second highlight of the presentation was the further developed Magma warp-tying machine.
The system is especially suitable for tying coarse yarns. Threads to be tied are separated at the
lease using a new, patent-pending system developed by Stäubli that works without any yarn-specific
settings. This development simplifies operation and changing from one application to another. A
built-in camera system monitors the separation of the threads and prevents doubled threads. By a
simple push of a button, Magma can also be set to tie double knots, even with very slick yarns.

Almost every kind of raw material can be used. For warps with 1:1 lease, the yarn count range
goes from Ne 0.3 to 50/1 for staple fibers. The length of knot ends is variable with a minimum of 5
millimeters, and the system is applicable on all Stäubli type TPF3 tying frames.

Stäubli reports its new, patented separating system reliably separates threads from the
lease, completely without thread-specific separating elements or special adjustments. Optical
sensors check every separated yarn pair before it is tied, preventing a false double yarn from
being tied.

Information Means Motivation

In a discussion at the end of the presentation, people from the staff welcomed the activities
of “their own” company and mentioned that every move is bringing up the level of motivation of the
staff. Information is motivation — this is still the first lesson in human relations. On top of
that, Stäubli highlighted its presence in the market by raising its flag. Gathering people under
the flag and showing your power and presence has been traditional for millennia. Cleverly, now is
the best time to mark presence, when everybody can see it and the territory is empty.

November 24, 2009

Controversies Surround Plans To Extend Trade Preference Programs

US textile manufacturers, retailers and a host of less developed countries have told Congress they
strongly support trade preference programs that allow underdeveloped countries quota-free,
duty-free access to the US market, and they would like to see them extended and improved. How they
define “improved,” however, is an area of broad division and controversy.

The House Trade Subcommittee has asked for comments on its plans to assess the operation,
impact and future course of US trade preference programs. The United States currently has
preferential programs with developing countries in Central America, the Caribbean, Africa and Asia,
plus the General System of Preferences (GSP) that covers products from 131 countries.

Forty-five trade associations representing 29 preference and free trade countries in North
and South America, Africa and the Middle East told Congress they depend on the preferential trade
agreements for some $30 billion in two-way trade. Noting that these trade agreements have helped
lift millions of textile and apparel workers out of poverty, the associations warned that adding
Cambodia and Bangladesh to the list of countries eligible for preferential trade would have
“catastrophic results.”

The associations claim that Cambodia and Bangladesh already have built “large and
competitive” apparel sectors at the expense of trade preference and free trade areas, and more
increases are anticipated even under existing trade rules.

Testifying before Trade Subcommittee, David Hastings, chairman of Mount Vernon Mills Inc. and
vice-chairman of the National Council of Textile Organizations (NCTO), urged Congress not to take
any actions that could cause future job losses in the United States, and he believes extending
benefits to Cambodia and Bangladesh would do just that.

He said such a move, in addition to job losses, would deprive the US Treasury of at least $1
billion in duties, and it would erode the ability to maintain a strong domestic production base for
the US military’s needs.

In a letter to the subcommittee, the National Retail Federation (NRF) urged Congress to renew
and expand preference programs that are allowing developing nations to provide US retailers with
billions of dollars worth of duty-free merchandise that helps keep consumer prices down.

Erik Autor, NRF’S vice president and international trade counsel, called for consolidating
six major trade preference programs into one with permanent or long-term authorization that would
make planning and sourcing decisions easier. Among other things, this single, consolidated plan
would extend preferential treatment to all developing countries, including Cambodia and Bangladesh,
and it would have a single rule of origin for all products. That would run counter to the textile
industry’s hard-won yarn-forward rule of origin that has been a key element in the industry’s
support of preferential programs.

NCTO’s Hastings told the subcommittee: “The current rules that govern trade in textiles and
apparel were developed in close consultation with Congress over the course of many decades in many
different types of agreement.” He noted that the North America Free Trade Agreement (NAFTA) and the
Central America-Dominican Republic FTA (CAFTA-DR), which support 75 percent of  US textile
exports, were “hard fought agreements that the US industry supported because they got specific
rules of origin that supported US jobs.” He added that “any trade preference reforms that undercut
those rules would be a mistake.”

Autor said many developing countries have difficulty meeting the current rules of origin for
textiles and apparel, and he opts, instead, for what he called a more flexible GSP standard for
manufacturing or processing that results in “substantial transformation” of inputs into a product
plus 35-percent value added in the beneficiary country.

Following the hearing, Rep. Jim McDermott, D-Wash., introduced a New Partnership for Trade
Development Act of 2009, which, among other things, would grant duty-free, quota-free treatment to
goods from Cambodia and Bangladesh and extend GPS treatment to textiles and apparel for 10
years.  At the present time, only a few specialized hand-made textile products are given GPS
treatment because they do not compete with domestic manufacturers. The McDermott bill would create
a Trade Development Review Panel that would consider adding more textile products to the GPS list.
That provision is strongly opposed by US textile manufacturers, who believe it would open the
floodgates to more imports and wipe out more US jobs, but it won the hardy support of importers who
say it would benefit consumers because duties would not have to be paid on imports and the lower
costs could be passed on.

NCTO President Cass Johnson, like the importers, believes the existing preference programs
should be renewed for longer periods in order to encourage investment and long-term trade
relationships. However, NCTO is opposed to a one-size-fits-all rule of origin, contending that each
preferential agreement has its own specific conditions and requirements.

House Ways and Means Committee Chairman Charles Rangel, D-N.Y., expects Congress this year to
enact legislation providing a short-term extension for GPS and the Andean Free Trade Agreement,
both of which expire December 31, and then next year take a more comprehensive look at how to
handle preferential trade agreements. Senate Finance Committee Chairman Max Baucus, D-Mont.,
expects the same thing to happen in the Senate.

November 24, 2009

Sponsors