Will TPP Really Boost U.S. Exports?

The negotiation of the Trans-Pacific Partnership Agreement (TPP) concluded in Oct. 2015 between its 12 member countries, which include the United States, Australia, Brunei Dar es Salaam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

The overarching objective of the TPP is to reduce, or eliminate, tariff and nontariff barriers across virtually all goods and services traded within the member countries with the goal being, in pertinent part, to

·       Facilitate the development of production and supply chains

·       Increase transparency across country specific trade laws

·       Encourage the smooth process of customs and border procedures

·       Open up domestic markets, and

·       Raise living standards and support job creation.

It includes provisions specific to certain industries in order to promote a common regulatory approach across the TPP region, which includes medical devices, information and communications technology products, and pharmaceuticals to name a few.

It's also being angled by the U.S. Trade Representatives Office to support American workers, businesses and values first, and has a special provision designated to wearing apparel and textiles.

As stated on the USTR's website:

TPP’s Textiles and Apparel chapter will create export opportunities for Made-in-America clothes, fabrics, and yarns and support jobs in the United States. This objective is advanced by a “yarn-forward” approach that requires use of yarns and fabrics from TPP countries in end products qualifying for preferential treatment under TPP — with some flexibility so that American businesses and workers whose products depend on inputs not available within the TPP region can still benefit. The yarn-forward approach also will help to develop a regionally-integrated supply chain that will promote long-term growth and investment in this sector in the United States. The Textiles and Apparel chapter also secures close customs cooperation among TPP Parties to facilitate effective enforcement of the rules; and ensures that U.S. companies have access to temporary relief if an import surge causes, or threatens to cause, serious damage to their business.   

Only time will tell if TPP will really boost U.S. origin exports and with the drafting of laws getting underway, that day will be here sooner than later.  Stay tuned.

Ever Wonder Just How Much is Being Imported into the U.S. From China?

Now you can see for yourself what those figures look like in relation to textile and apparel imports thanks to the U.S. International Trade Commission’s latest release which compiles such 2014 data in to a single handy document.

The annual report contains a compilation of the statistical reports published every two weeks by the Commission on the volume, value, unit value, and import market share of imports from China that were subject to the provisions of the 2005 U.S.-China Memorandum of Understanding Concerning Trade in Textiles and Apparel (MOU).  This compilation includes official import data from the U.S. Department of Commerce, and shows data at the 3-digit textile/apparel category level and by the Harmonized Tariff Schedule (HTS) 10-digit subheadings in these categories.

Want to read through it for yourself?  The Textile and Apparel Imports from China: Statistical Reports, Annual Compilation 2014 (Inv. No. 332-501, USITC publication 4535, May 2015) is available on the USITC's Internet site at http://www.usitc.gov/publications/332/pub4535.pdf.

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Washington DC Gets Ready to Discuss AGOA, Textiles From Africa, and More

On Friday August 1, 2014, the Civil Society of the AGOA Forum will be hosting its own two-day meeting under the theme “AGOA:Re-Authorization beyond 2015.”    Time is running out to register but you still can here.

The purpose of this meeting is to come up with written recommendations for presentation to the Ministerial Session of the African Growth and Opportunity Act (AGOA) during the Africa Summit beginning August 5, 2014.

As described by the AGOA Civil Society Network, the AGOA “is a trade mechanism that was passed by the US Government in 2000 to encourage US-Africa trade.   AGOA currently provides the 40 AGOA-eligible countries with:

-   - Most liberal access to US markets for any country or region without at free trade agreement

-   - Reinforced Africa reform and development efforts, and

-   - Access to US credit and technical expertise.”

Other posts related to AGOA and textiles can be found here.

The Foundation for Democracy in Africa is likewise hosting an event on August 5, 2014 entitled “AGOA CSO Session: 13th US-Africa Trade and Economic Cooperation AGOA Forum.  This event will have a focus on human rights and democratic reform, among other topics.  Tickets are free but registration is required.

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Is Your Scarf Flammable? Women’s Scarves Recalled Due to Flammability Hazard

DO YOU HAVE ONE OF THESE SCARVES? 

If so, be advised that there’s been at least 1 report of these scarves catching fire and they have now been recalled by the Consumer Product Safety Commission as they failed to meet the federal flammability standard for wearing apparel and pose a risk of burn injury to consumers.

Both the Julie Vos “Sierra” and “Anchor” style scarves have been recalled.

The scarves, which are under the brand, Julie Vos, are 100 percent modal fabric, which is a type of rayon, and were sold in two prints, Anchor and Sierra. Anchor (on the left) was sold in three colors, including blue, green and orange. 

Sierra (on the right) was sold in four colors, including raspberry/magenta, orange/peach, cream/gray and blue/purple. The scarves measure 75 inches long by 45 inches wide and "Julie Vos" is printed on a tag sewn into the back of the scarf.

Manufactured in India, these imported scarves have been sold at specialty boutiques across the country and online at www.julievos.com from January 2014 through February 2014 for about $165.  

Consumers should immediately stop using the recalled scarves and contact Julie Vos to arrange to return the scarves for a full refund. Julie Vos will provide a pre-paid postage label for shipping.

More information on the product recall may be found here:  http://www.cpsc.gov/en/Recalls/2014/Womens-Scarves-Recalled-by-Julie-Vos/#remedy

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Promoting Trade and Investment Opportunities in the African Apparel and Textiles Industry

Last month, fashion forward and culturally relevant designs were showcased at the 2013 runway shows of Africa Fashion Week here in New York City. 

Having attended the show, I was dazzled and impressed with the creativity and detail of pieces by designers like Aliakim, Demstiks by Reuben Reul, Moroccan Caftan NY, and Ms. Ray Couture, all of whose designs are shown in the images below.

Cotton was present in many of the pieces shown on the runway, and turning to comments made by Rajeev Arora, Executive Director of the African Cotton and Textile Industries Federation (ACTIF), in the recent article “Changing Perceptions Toward Modern Africa,” published in Cotton Africa and found here, offers some perspective into the current state of the African market.

“Currently, the demand for fabric in the Sub-Sahara African market far exceeds the present production and supply. Considering the economic cost in sending African cotton to Asia for processing into fabric before shipping it back to Africa to be cut and sewn into garments, ACTIF is playing a key role in cutting this cost by ensuring that the fabric is fully produced adequately in Africa.

This calls for urgency in exploring the opportunities for investing in weaving, spinning, dyeing, and finishing in the region.  In line with this achievement, African governments should be taking initiatives in creating investment-friendly regimes as currently being witnessed in the case of Ethiopia. Also there has been a remarkable increase in support by international organizations such as Business Advocacy Fund that approved its support to ACTIF in carrying out AGOA [African Growth and Opportunity Act] outreach programs.

 Other international organizations, such as Innovations for Poverty Action (IPA) are also actively conducting studies on how to improve various industrial sectors including the Textile and Garment sector across Africa. 

Given the current stake, I would like to urge all stakeholders in the cotton value chain as well as supporting partners in Africa to support ACTIF’s initiatives as it represents the interests of the CTA value chain of Africa to the international market, as a viable competitor.”

And indeed, rumor has it that already here in the U.S., behind-the-scenes activities are taking place in an effort to have the AGOA agreement extended well before its 2015 expiration.

Have you heard anything about this as well?

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Looking to Buy Products Made in the USA?

The Office of Textiles and Apparel at the US International Trade Administration has a handy portal to help sellers find vendors who manufacture products made in the USA.

Specific to the textiles and apparel industries, the portal allows you to search for vendors of children’s wear (including infants), men’s and boy’s, or women’s and girl’s apparel, in addition to accessories and footwear, technical textiles as well as soft furnishings.

You can further search by fabrics, whether of wool, cotton, upholstery, silk and other fabrics.

Whether searching for a cut and sew contractor, input supplier, manufacturer or other type of business, the information you will get back includes an entity’s contact information, whether or not they export, production capacity and production locations.

You can also learn if they have design capabilities, have any special washes or treatments available, certifications offered and many other details.

To go to the Made in USA search portal, click here.

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2013 AGOA Countries – Winners and Losers

Currently, there are 39 Sub-Saharan African countries designated as beneficiary countries under the African Growth and Opportunity Act (AGOA).  For a complete list, see below.

President Obama terminated the designations of the Republic of Mali and the Republic of Guinea-Bissau as beneficiary countries under the AGOA agreement at the end of last year.

The one “winner” this year is the emerging country of South Sudan which has been added as the most recent beneficiary to the agreement. 

The practical application of the AGOA is that goods imported into the US from a Sub-Saharan beneficiary country enjoy duty-free treatment, which creates an incentive for US buyers to source products made in these African countries.  Such benefit is currently in effect through September 30, 2015.

The benefit becomes applicable however, only under certain circumstances which do not include simple combining or packing operations, or the mere dilution with water or some other substance that does not materially alter the characteristics of the article.

Rather, the duty-free benefit applies where (1) the imports are the growth, product or manufacture of a designated beneficiary country, and (2) the sum of the cost or value of the materials produced in one or more designated beneficiary countries PLUS the direct costs of processing operations performed there or, in any 2 or more designated members of the same association of countries which is treated as 1 country ((under section 506A of the Trade Act of 1974)) is not less than 35% of the appraised value of such article at the time it is entered.

Here is a complete list of countries.  For more information on the AGOA agreement click here, post below or feel free to email me at clark.deanna@gmail.com

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AGOA COUNTRIES

Republic of Angola Republic of Benin Republic of Botswana Burkina Faso Republic of Burundi Republic of Cameroon Republic of Cape Verde Republic of Chad Union of the Comoros Republic of Congo Republic of Côte d’Ivoire Republic of Djibouti Ethiopia Gabonese Republic Republic of The Gambia Republic of Ghana Republic of Guinea Republic of Kenya Kingdom of Lesotho Republic of Liberia

Republic of Malawi Islamic Republic of Mauritania Republic of Mauritius Republic of Mozambique Republic of Namibia Republic of Niger Federal Republic of Nigeria Republic of Rwanda Democratic Republic of Sao Tome and Principe Republic of Senegal Republic of Seychelles Republic of Sierra Leone Republic of South Africa Republic of South Sudan Kingdom of Swaziland United Republic of Tanzania Republic of Togo Republic of Uganda Republic of Zambia

New US Customs “Centers for Excellence and Expertise” (CEE)

I attended a US Customs webinar yesterday that explained how the agency is in the process of setting up new “Centers for Excellence and Expertise” (CEE).  These centers – which are virtual – are intended to bring existing expertise together in order to facilitate trade on the part of US Customs and to align its procedures with modern business practices.

Of greater significance however, is that US Customs intends to assign each importer with an account at a CEE to route entry summaries through and to use these virtual environments to move non-revenue collection activity to a CEE for handling protests, the review of prior disclosures and other activities.  Revenue collection however, will continue to be done at the port of entry.

The creation of CEEs are part of US Customs’ “trade transformation efforts,” which also includes an overhaul of 19 CFR Part 111, which are the customs brokers regulations.

CEEs are meant to serve as an information resource for the importing community, be it a large or small importer or broker, US Customs itself, or another government agency.  Customs stated that it has created CEEs by industry in order to focus on industry-specific issues so it can better meet the challenges for that industry.  Unfortunately, with such few and broad categories (listed below) in relation to the thousands of types of imported merchandise, it is questionable as to how well this intention will be met.

The goals of the CEE are:

1)      To facilitate legitimate trade through effective risk management and to “segment” risk so as to get the “good actors” out of the way in order to focus on the riskier participants,

2)      To increase industry-based knowledge within Customs and to better understand the unique practices within an industry, and

3)      To enhance enforcement efforts and to partner with industry stakeholders in order to understand and address industry risks.

As it stands, nine (9) industry groups were identified by Customs for which nine (9) CEEs are to be created.  Four (4) of them have already opened, listed as the first four (4) in the list below, and importers are already welcome to solicit participation in one of them.

Open CEEs:

1)      Electronics (Long Beach, CA)

2)      Pharmaceutical Health and Chemicals (New York)

3)      Automotive and Aerospace (Detroit, MI)

4)      Petroleum, Natural Gas and Minerals (Houston, TX)

Unopened Centers:

5)      Apparel, Footwear and Textiles

6)      Base Metal and Machinery

7)      Consumer Products and Mass Merchandising

8)      Industrial and Manufacturing Materials

9)      Agriculture and Prepared Products

For more information, you can check out this Federal Register Notice at 77 FR 52048 dated August 28, 2012, access a .pdf version here), or email US Customs directly at cee@cbp.dhs.gov.

Questions/comments?  Post below or email me at clark.deanna@gmail.com

AGOA Renewal Recommendations Sought by USTR

Submit Your Comments By October 11, 2012

For 2012, there are 40 Sub-Saharan African countries which have been designated as beneficiary countries under the African Growth and Opportunity Act (AGOA).  This means that articles, including certain textile and apparel products, made in these countries are eligible upon importation to the US for duty-free treatment.

The US Trade Representative’s Office (USTR) has requested comments in order to develop recommendations on AGOA country eligibility for the 2013 calendar year.

In order to qualify as an AGOA beneficiary country is, among other things, the establishment (or progress towards) a market based economy, governance by the rule of law, the right to due process, and political pluralism.  In addition, economic policies to reduce poverty, a system to combat corruption and bribery, and the protection of internationally recognized worker’s rights are also required.

USTR is also interested in identifying countries and the extent to which child labor is used.

Where the US President determines that a beneficiary country is not making continual progress in meeting the eligibility requirements, he must terminate the designation of the country as a beneficiary of AGOA.

Countries under consideration for 2013 are the State of Eritrea, Democratic Republic of Congo, the Republics of South Sudan, Madagascar, Zimbabwe, Equatorial Guinea and Sudan, Somalia, and the Central African Republic which are not currently beneficiaries under the AGOA.

Public comments in connection with the annual review regarding country eligibility in relation to the above criteria, and also with respect to child labor, are requested for submission online at www.regulations.gov .  Enter the “docket number” USTR-2012-0026 on the home page (and click “search”) so that the case can be pulled up. 

You can thereafter find a reference to this notice by clicking “Notice” under the header “Document Type” on the search-results page and click on the link entitled “Submit a Comment.”

If you are unable to make a submission, or have a question related to an attachment or a confidential submission, you may contact Don Eiss, Trade Policy Staff Committee at (202) 395-3475.

All other non-technical or procedural questions should be directed to Constance Hamilton, Deputy Assistant U.S. Trade Representative for Africa, Office of the USTR at (202) 395-9514.

Questions/comments? Post below or email me at clark.deanna@gmail.com

Africa Sourcing and the AGOA Extension

"AGOA Provision Related to the Third Country Fabric Provision Anticipated to Pass Congress Next Week"

    

     --  Staff Member, U.S. Senator Menendez' office in DC

This week I attended TEXWORLD in NYC, which is a textiles and apparel trade show open to those of us in the industry and the public at large. 

While Chinese suppliers made up a large majority, I was pleased to see others hailing from S. Korea, Turkey, and of course, India, among others, as well as a corridor for African sourcing, with a number of vendors from Mauritius, and Origin Africa (http://originafrica.org).

Together at the convention were a series of public seminars, one of which focused on trade and Africa, and particularly on sourcing from Africa. Many companies are interested in sourcing from Africa, and this interest has been steadily growing since the AGOA agreement came into effect.

Currently, we are awaiting the (hoped for and) anticipated passage of a special provision of the African Growth and Opportunity Act (AGOA) which allows fabrics from other countries to be used in the manufacturing process and still qualify for the benefit of “AGOA treatment, ” i.e., duty free treatment, of the product.  For more information on AGOA, check out my other articles here:

The African Fashion Industry – Can in Benefit From AGOA?

The African Fashion Industry and AGOA

I spoke with Senator Menendez’ (NJ state senator) staff in Washington DC yesterday, who assured me that there is a lot of bi-partisan support for the passage of the AGOA provision awaiting passage by the Senate, which involves the continued permission for imports into the US to qualify for the duty-free treatment accorded by the AGOA agreement when fabrics from non-African/non-US countries had been used in the construction of the garment.

I expressed to the staff member that these types of delays make it difficult for businesses to accurately make financial projections in the uncertain commercial environment created when company’s do not know if their cost of importation is going to rise, on average, from anywhere between 10% to 35%.  It therefore, could serve as a deterrent from sourcing from Africa which defeats the whole purpose of a program like the AGOA that is intended to promote increased sourcing from Sub-Saharan Africa.

He assured me that this was known but explained that the AGOA passage was tied up with other trade bills that likewise needed support and which, in their current forms, were not fully supported.

Many people are calling there to express their support for the passage and I encourage you to do the same.  The telephone nos. for Senator Menendez’ office is (202) 224-4744 and the general switchboard in order to be connected to any U.S. Senator’s office is (202) 224-3121.

Feel free to call over there and when connected to a Senator’s office, tell them you would like to speak to someone regarding the “Africa trade bill,” – they’re more likely to understand this comment than stating the "AGOA agreement" - and then express why continued legislative AGOA support is important to you.

Exercise your voice.  Isn’t this what a democracy is all about?

Questions/comments?  Post below or email me at clark.deanna@gmail.com

International Trade and Human Rights

PBS aired a news piece recently that spoke to the human rights abuses in textiles factories in Cambodia. 

How do human rights abuses affect international trade?

 Maltreatment of apparel workers in the developing world as well as here in the US is common practice and has been for decades. 

How do we as a country that prides itself on labor laws and OSHA regulations (the "healthy workplace" standards in the US) so easily ignore this reality when we as consumers can have a direct impact in trade and overseas production if we speak with our wallets?

Doesn’t money talk?

Indeed it does, as many licensors know who place manufacturing requirements in its contracts with importers in an attempt to improve the working conditions of overseas laborers.  (See my article here for more information.)

Many importers of both unfinished and finished products, as well as agribusiness, see Africa as the “new frontier”. 

What I would like to know is:  Will we do it the “right way?”

That is, in a place with loose regulations (at best) will we – those of us going into the many countries that make up Africa – take advantage of the people and their land?

Or, will we create a business environment where human life and dignity are respected and sustainable production is expected, such that the health and welfare of both the people and the environment are respected?

In my view, the latter is the only answer, not only from an ethical standpoint but from that of a sustainable business model. 

Questions/comments?  Post below or email me at clark.deanna@gmail.com