Short Supply, Origin Verification Among Open Textile Issues Under TTIP
Short supply list and origin verification were among areas of discussion within the textile provisions of the Transatlantic Trade and Investment Partnership as of March, according to a purportedly leaked TTIP document (here). Neither the U.S. nor EU confirmed authenticity of some 13 chapters of the TTIP text allegedly leaked this week, but both sides criticized conclusions made based on the texts (see 1605020032).
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TTIP could provide the legal authority to cooperate with the EU on preferential-origin verifications for textile and clothing products imported from the U.S., according to the document. “Although [CBP] could potentially request the cooperation of the exporting partner country for preferential imports, it prefers in most cases to do its own verification including direct visits to the exporting country,” the paper says. Textile provisions would also go beyond “strictly” covering preferential origin issues, and would also account for infringement and fraud on non-preferential origin products, including antidumping and origin marking-related issues, but not on “other elements” like labeling, the summary says. U.S. TTIP negotiators say the provisions were proposed because of frequent fraud — found in about half of cases investigated — in textile and apparel trade, according to the document.
As of the March publication date of that “state of play” document, the EU had expressed concerns to the U.S. regarding TTIP language on textile anti-circumvention and information sharing, saying that some provisions “seemed to have” an ambiguous scope, confidentiality issues had not been “clearly addressed,” and that the language could overlap with the Customs Cooperation and Mutual Assistance Agreement. Overall, the document concluded that the U.S. has a more relaxed approach to product-specific rules than the EU, as the EU rules apply to all clothing materials, and U.S. rules apply only to some materials.
The document also mentions the U.S. apparel "short supply list" concept, indicating the possibility of its inclusion in TTIP. Short supply lists are incorporated in several free trade agreements, including CAFTA-DR and the Trans-Pacific Partnership, and they accord favorable duty treatment for third-country apparel inputs commercially unavailable in the U.S. The Office of the U.S. Trade Representative did not comment on TTIP's textile language or on where the negotiations now stand.
Another chapter shows a U.S. proposal for a bilateral Committee on Trade in Goods to examine matters related to customs administration and trade facilitation, “roles of origin and origin procedures,” and goods’ market access (here). Among other things, the committee would discuss accelerating tariff elimination under TTIP, to attempt to resolve classification differences between goods on the international Harmonized System, and “review conversion” to HS 2017 nomenclature and subsequent revisions to ensure consistency of U.S. and EU TTIP obligations. The market access document also shows that the committee might arrange a customs subcommittee to help its work on such issues.