Coalition Seeks Major Changes In Trade Agreements

A diverse coalition of importers, apparel manufacturers, business groups and   
associations seeking to reduce poverty throughout the world is appealing to Congress and the Obama
administration to make major changes in trade preference agreements to place more emphasis on
helping underdeveloped nations.

If successful, the effort could make major changes in or eliminate the US textile industry’s
coveted yarn forward rule of origin for textile and apparel imports in existing and future trade
preference agreements (TPAs).

The coalition strongly supports TPAs as a way to fight poverty and raise the standard of
living in less developed countries, but it believes they should be changed to permit wider coverage
and elimination of what it calls “restrictive” rules. They also believe trade preferences benefit
US consumers by giving them a wider choice of products at affordable prices.

Kevin Burke, president and CEO of the American Apparel and Footwear Association (AAFA), says
the current set of US trade preference programs “have short durations, rigid product restrictions
and complex, often contradictory, rules that lead to immense uncertainty and confusion that has
severely limited the benefits of these programs.”

In letters to the House and Senate trade committee leaders in Congress and the US Trade
Representative, the coalition said: “For decades, the United States has extended preferential,
duty-free access to imports from selected developing countries through a growing number of
preference programs. These programs have contributed to economic development around the world and
improved the livelihoods of people living in poverty. In many cases jobs created under preference
programs have provided opportunities for women and low-skilled workers who otherwise have
relatively few economic alternatives in many countries, yet are responsible for supporting entire
families and communities.”

While strongly endorsing the idea of trade preference agreements, the coalition is calling
for reforms, including:

  • one simple, unified U.S. trade preference program that extends benefits to all developing
    countries, including advanced developing countries; contains consistent, transparent, predictable
    and enforceable rules for termination of country and product eligibility; includes a mechanism for
    public comment and a clear review process for continued participation with regular reporting to
    Congress on performance and trends; and uses a simple rule of origin for all products and remains
    in effect long enough to encourage long-term investments and sourcing; and
  • enhanced benefits for least developed countries, including sub-Saharan Africa and designated
    low-middle-income countries including extension of duty-free, quota-free market access for all
    products; and a less restrictive rule of origin for eligible sub-Saharan Africa countries.

The coalition also calls for extension of two TPAs set to expire at the end of this year – the
General System of Trade Preferences program and the Andean Trade Promotion and Drug Eradication Act
– and a successful conclusion of the World Trade Organization’s Doha Development Agenda.

The 29-member coalition includes such diverse interests as the US Association of Importers
of Textiles and Apparel, AAFA, the Business Roundtable, the US Chamber of Commerce, the Emergency
Committee for American Trade, the National Retail Federation, the Center for Global Development,
Women Thrive Worldwide, The Hunger Project, the US-Bangladesh Advisory Council and the US-India
Business Council.

April 28, 2009