Apparel Retailers Continue Push to Integrate Colombia, Peru Supply Chains
U.S apparel retailers continued their long-standing push in an Oct. 21 letter (here) to U.S. Trade Representative Michael Froman to set in motion regional textile and apparel “cumulation” provisions in trade promotion agreements with Colombia and Peru. Both pacts include an apparel provision, article 3.3.14 in each, which aims to promote regional textile and apparel integration by allowing other regional inputs to meet country of origin requirements in the agreements and therefore qualify under preferential treatment. Both countries recently urged the U.S. to implement the provisions, the retailers said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The two pact direct negotiators to begin “cumulative” provision negotiations six months from the entry into force of each agreement. The Peru pact entered into force in 2009, followed by the Colombian agreement in 2012. “The implementation of the cumulation provision for all apparel and textile categories is, therefore, long overdue,” said the American Apparel and Footwear Association, the National Retail Federation, the Retail Industry Leaders Association and the U.S. Fashion Industry Association. “Swift implementation would help reverse the decline in textile and apparel trade between the U.S. and two of its key commercial and strategic partners in the Andean Region and South America, while boosting U.S. exports of cotton, yarn, and fabric.”
The two bilateral pacts prohibited preferential treatment for regional inputs following years of “cumulation” authorization in the Andean Trade Promotion and Drug Eradication Act, said the groups. That law expired in 2013. “As a result of this severing of regional supply chains among U.S., Colombian, and Peruvian apparel companies, trade has decreased,” the groups said. “Combined textile and apparel exports from both countries to the U.S. were as high as $1.5 billion and constituted 1.61 percent of the U.S. market share during the ATPDEA years, but in 2014 dropped to approximately $900 million, just 0.84 percent of the U.S. market share.” Apparel retailers have for years pushed Froman to activate the “cumulation” provisions (here).