What is in this article?:
- The 15th round of the ongoing cotton talks in the Trans-Pacific Partnership trade agreement hearings ended this past fall with much the same results — Vietnam walking out on the negotiations.
- The two sides are bitterly divided between two basic marketing principles: The Single Transformation Rule and the Yarn Forward Rule.
In the Senate, 15 senators — led by Mark Warner, (D-Va.), and including seven Democrats and eight Republicans, sent a letter to President Obama urging more flexible textile and apparel rules and "meaningful market access."
The letter calls the current U.S. position "an overly broad approach" and urges instead "a new approach which reflects the significant value created by American retailers, apparel brands, manufacturers, and importers as well as domestic textile producers.
“Such an approach should include a flexible general rule of origin for apparel that maximizes the incentive to grow U.S. exports, value and jobs in the TPP."
The Textile and Apparel Alliance for the Trans-Pacific Partnership negotiations (TAAT) was formed last year, after Vietnam proposed textile and apparel country of origin rules that would enable its state-owned enterprises to use subsidized inputs produced in China and export the finished goods duty-free to other TPP participants.
The coalition notes that allowing inputs from China in Vietnamese goods would provide China with new, unrestricted access to the U.S. market. It supports textile rules that are based on rules in free trade agreements (FTAs) the United States has negotiated over the last 25 years.
The National Cotton Council, along with a number of other U.S. trade groups, is listed among supporters of the Yarn Forward Rule.
Gary Adams, National Cotton Council vice-president for economics and policy analysis, says, “The National Cotton Council has a long-standing policy of supporting a Yarn Forward Rule of Origin.
“That rule of origin has been the model for free trade agreements entered into by the United States and it is the best approach for insuring that preferential benefits are conveyed to the signatory countries in an agreement.
“Relaxing the Yarn Forward Rule of Origin not only jeopardizes the U.S. textile industry, but also places in jeopardy the substantial cotton and cotton textile trade that occurs with other Western Hemisphere countries.
“A strong rule of origin will be particularly important in negotiations such as the Trans Pacific Partnership, which includes Vietnam — a non-market economy,” Adams says.