AAFA Urges Froman to Slash TPP Origin Restrictions on Legwear, Certain Yarns
The American Apparel and Footwear Association pressed U.S. Trade Representative Michael Froman to make some changes to the U.S. proposal for apparel rules of origin in the Trans-Pacific Partnership in two letters to Froman over recent days. Froman affirmed in testimony before Congress in late January the U.S. still plans to put a yarn forward rule in TPP. That rule says a product must be fully manufactured, including the yarns used, in a specific free trade agreement country in order to qualify for FTA preferences.
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Should a yarn-forward rule make it into a TPP final pact, the U.S. should exempt gimped yarn, as it has done in all its free trade agreements, said Juanita Duggan, AAFA CEO, in one letter (here). Gimped yarn is “stretchy” with a “spandex core with a covering yarn mechanically wrapped around it,” said the letter. The gimped yarn exemption has allowed apparel traders to still take advantage of yarn forward rules in other FTAs, Duggan said. AAFA also wants an exception for nylon filament yards made in Israel. That yarn is used in U.S. production, and without its exception, U.S. textile manufacturing will suffer, said Duggan.
The yarn forward rule typically includes a number of flexibilities in U.S. FTAs, observers say. Retailers and manufacturers are pushing hard for a “short supply” list and possibly other rules to ease restriction on rules of origin in TPP (see 14081105).
Duggan also pushed Froman to put a “knit to shape” rule of origin for legwear in TPP. That rule would permit companies operating in the TPP region to continue to source certain yarns and fabrics globally, while still benefiting from TPP preferences. AAFA has long pressed USTR to slash legwear restrictions in TPP (see 14070710). “Allowing legwear products to use a KTS rule, rather than relying on more restrictive rules, would create balanced opportunities for all segments of the U.S. legwear industry - exporters, manufacturers, and importers,” said Duggan in a separate letter (here). “Legwear companies depend on complicated global supply chains to meet the ever-changing fashion requirements. Strict origin requirements no longer support flexible sourcing and manufacturing needed today.”