FOR IMMEDIATE RELEASE
CONTACT
KARL SPILHAUS, President
National Textile Association
(617) 542-8220
BOSTON, Dec. 12, 2002 -- The National Textile
Association is concerned that the establishment of significant Tariff Preference
Levels (TPLs) under the U.S.-Chile Free Trade Agreement (FTA) could undermine an
otherwise helpful trading arrangement.
"We are pleased that the U.S. government acted
on several specific concerns of NTA members in drafting the rules for textile
products," said NTA president Karl Spilhaus. "NTA's consistent position with
regard to FTAs has been that qualifying goods be made from components formed in
the countries that are partners to the agreement. We have strongly
opposed derogations from the rules of origin that undermine the value
to U.S. textile manufacturers of FTAs."
We are troubled by the large exemption from the
rules of origin for cotton and man-made fiber textiles. This TPL would
permit two million square meters of cotton or man-made fiber apparel made of
third-country (such as China) fabrics while getting the duty-free benefit of the
FTA. This TPL, which is actually higher than the current level of trade, is
hardly a limit at all. We note, however, that the TPL is a transitional
arrangement which expires at the end of ten years. A second TPL of one million
square meters would apply to cotton or man-made fiber fabric formed in Chile of
third-country yarns.
Chile is not a major source of U.S. textile and
apparel imports, nevertheless, we are gravely concerned that the TPLs in the
Chile FTA will be used as a precedent for similarly high TPLs in trade
agreements with other South American, Central American, or other countries which
are major shippers of textile and apparel products.
We are also concerned that the general rule of origin appears to apply to
only the outer shell fabric that imparts the essential characteristics of the
garment (plus certain visible linings). NTA had urged that all the fabrics
that go into the production of a garment be considered in determining origin, as
is the case with preferential trade arrangements such as Caribbean, sub-Saharan
African, and Andean trade arrangements.
We are relieved that wool textile and apparel
articles are not included in the TPLs. The wool textile industry, which is an
extremely import sensitive sector, has been struggling over the past several
years. The rule of origin for brassieres, as we understand it, is modeled
after the rule in the Caribbean Basin Trade Partnership Act (CBTPA) and requires
that at least 75 percent, in aggregate, of the fabric used in brassieres entered
under the duty-free provisions must be U.S. or Chilean fabric.
Intellectual property rights (IPR) protection is an
important issue to U.S. textile manufacturers. We note that, according to a
U.S. Trade Representative's Office press release, the U.S.-Chile FTA
addresses IPR and we are anxious to see and evaluate the actual IPR language in
the agreement.