National Textile Association (USA) | March 25, 2010
NTA sees danger in administrations plans for TPP Agreement
The Trans-Pacific Agreement is a multilateral free trade agreement ("FTA") among Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore and Vietnam.
The rules of origin for textiles and apparel under the TPP are substantially different from, and, from NTA perspective, inferior to, the rules of origin in most the the FTAs the U.S. is a partner to. The TPP rules of origin for textile and apparel are single-transformation with a 50 percent value added requirement.
The U.S. already has FTAs with Australia, Chile, Peru, and Singapore and it is unclear how they would be integrated into the TPP.
On March 11, 2009 the National Textile Association submitted comments to the Office of the U.S. Trade Representative in opposition to a Proposed Trans-Pacific Partnership Free Trade ("TPP") Agreement With Singapore, Chile, New Zealand, Brunei Darussalam, Australia, Peru and Vietnam. Our objection were gathered under four heads:
The TPP is unlikely to result in significant market access for U.S. textiles and textile products.
The TPP is likely to result in severe disruptions in the domestic U.S. industry.
The TPP could undermine a two-decade-long consensus on the basis for textile rules of origin in FTAs
The TPP continues failed trade policies tilted in favor of our foreign trade partners to the harm of domestic U.S. interests.
We are also troubled by assession provision (Article 20.6) which states that any member nation of the Asia-Pacific Economic Cooperation ("APEC") (www.apec.org) join "on terms to be agreed among the parties [taking] into account the circumstances of that APEC economy...particular with respect to timetables for liberalisation." APEC’s 21 Member Economies are Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam. Under the provisions of Article 20.6 the U.S. could easily bo out-voted by other partners when questions arise of which nations, and on what terms, TPP is to be expanded among the APEC members.
On March 19, 2010 U.S. negotiators finished their fifth and final day of Trans-Pacific Partnership ("TPP") negotiations with their counterparts from Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam. During the week of talks in Melbourne, Australia, the U.S. negotiators exchanged views with their counterparts on how best to develop the framework for a free trade agreement. The 22-member team of U.S. negotiators, led by Assistant U.S. Trade Representative for Southeast Asia and the Pacific Barbara Weisel, included Assistant U.S. Trade Representative for Textiles Gail Strickler.
The TPP went into effect in 2006 for Brunei Darussalam, Chile, New Zealand, and Singapore. The nations of Australia, Peru, and Vietnam joined in 2008. Also in 2008 the U.S. indicated interest in joining, although there was little activity in the final months of the administration of George W. Bush and the early months of the administration of Barack Obama. Then on December 14, 2009, the Office of the United States Trade Representative Ron Kirk formally notified Congress of the Obama Administration’s intent to enter into negotiations of the Trans-Pacific Partnership, a regional, Asia-Pacific trade agreement.
In 2010 Malaysia indicated interest in joining as well. The U.S., in 2006, launched separate negotions with Malaysia but suspended talks in 2007 due to lack of political consensus in Malaysia.