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  • Textiles & the TPP: Concerns & Issues for U.S., WesternHemisphere & African Producers

  • 29 countries around the globe with trade agreements with the United States in textiles.

    Mexico, Central America, Andean, Africa & Middle East textile and apparel producers

    Global Supply Chain nearly $30 billion in two'way textile and apparel trade

    Employ nearly two million workers,

    hundreds of thousands in US

    www.taa-tpp.com

  • Same textiles rules for TPP as in past agreements

    Yarn Forward Rule

    Rules that promote private industry investment and job growth

    Do not damage already existing trade

  • Means that all the textiles inputs from yarn to fabric to apparel must be made in the TPP region.

    Billions of dollars of investment have occurred in U.S., Mexico, CAFTA and the Andean region because of the yarn forward rule

    Created a nearly $30 billion in two way trade between trade preference countries and the U.S.

  • Trade program Enacted Textile Rule

    807A Program for CBI 1988 U.S. Yarn ForwardMexico Special Regime 1988 U.S. Yarn Forward

    Andean Program 1991 U.S. Yarn Forward

    NAFTA FTA 1993 Yarn Forward

    CBTPA Program 2000 U.S. Yarn forward

    Chile FTA 2003 Yarn Forward

    Singapore FTA 2003 Yarn Forward

    Australia FTA 2004 Yarn Forward

    Bahrain FTA 2004 Yarn Forward

    DR'CAFTA 2004 Yarn Forward

    Morocco FTA 2004 Yarn Forward

    Oman FTA 2005 Yarn Forward

    Peru FTA 2007 Yarn Forward

    Korea FTA 2011 Yarn Forward

    Colombia FTA 2011 Yarn Forward

    Panama FTA 2011 Yarn Forward

    TPP Negotiations: U.S. POSITION 2012 Yarn Forward

    U.S. Trade Policy:

    25Years of Yarn ForwardRule

  • Wants a Flexible Rule of Origin

    ONLY the sewing of the garment be required in TPP

    Would allow Vietnam to source subsidized yarns and fabrics from China and still get duty'free access to the U.S.

    RESULT: Vietnam would be the immediate low cost supplier

    for 42% of Western Hemisphere/Africa trade

    China would get billions of dollars of orders in textile products that are currently going to U.S. and West Hemisphere producers

  • Chinese Textile/Apparel Industry

    Textile and Apparel Industry 20 million workers12th 5 Year Plan for Textiles Dominated by State'Owned Enterprises

    Chinese exporters get 35'75% advantage from government on every product exported+ Currency Manipulation adds 25 to 40% advantage

    + Offers 30 different subsidies to its textile and apparel companies adds 10% to 35% more

  • VIETNAM a Mini'China

    State Owned, Subsidized Apparel Industry

    Discounts on Loan Rates

    Access to State Capital for Financing

    Free/Discounted Land and Preferential Access to Land

    Preferential Duty'Free imports of arts/accessories/other goods

    Excessive Rebates of Import Duties for Inputs to Goods to be re'exported

    Cotton Subsidies , among others

  • Largest Garment Company in Vietnam & Owned by the Vietnamese government

    10th Largest Garment Producer in the world; nearly

    500,000 workers

    Controls 25% of Vietnams Textile and Apparel Export Sales

  • TPP

    Privately funded companiesSmall & medium sizedPrivate investmentsU.S., Western Hemis, Africa trade platform

    State owned conglomeratesState funded &

    subsidized industry Chinese textiles

    Two Visions For Textiles in the TPP

  • CANAINTEX is the leading mexicanorganization representing textile industry Yarns

    Woven and knit fabrics

    Non woven

    Trims

    Hosiery, t'shirts, towels, blankets and other final products

    Many CANAINTEX members are verticallyintegrated to apparel production

  • Mexico employs 400,000 workers in the textile industry and apparel sector

    These jobs are the support of more than 1.2million indirect workers in Mexico

    Mexico needs jobopportunities as the bestsocial policy againstinmigration and crime

  • Mexico represents 22% of textile and apparel US total exports. In fact, Mexico isthe 1st export market for US fabrics.

    Mexico consumes annually 2 million bales of cotton fiber, mainly from the US.

  • Category Description Ranking in US total imports

    Volume(million SME)

    Average Price(Dls/SME)

    Mexico Vietnam Mexico Vietnam Mexico Vietnam

    347M/B COT. TROUSERS/BREECHES/ SHORTS

    1 4 181 67 6.73 4.44

    348W/G COTTON TROUSERS/SLACKS/ SHORTS

    6 2 52 174 6.45 3.66

    Source: OTEXA, 2011

  • $0.00

    $1.00

    $2.00

    $3.00

    $4.00

    $5.00

    $6.00

    $7.00

    $8.00

    2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011Vietnam Mxico

    Source: Average Unit Price, OTEXA, 2011

  • $0

    $1

    $2

    $3

    $4

    $5

    $6

    $7

    2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

    Vietnam Mxico

    Source: Average Price, OTEXA, 2011

  • Four CAFTA DR countries are among the Top 15 buyers of US Textile & Apparel products.

    Taken together, exports to these four CAFTA

    countries in 2011 came to $3,289 million, making it the Top Three Market for U.S. Textile & Apparel Exports. Total U.S. Exports (USD,

    Millions) 2006 2007 2008 2009 2010 2011

    1. Canada 4,485 4,524 4,661 3,956 4,465 4,991

    2. Mxico 5,097 4,478 4,262 3,640 4,308 4,898

    3. Honduras 1,398 1,489 1,526 1,053 1,455 1,839

    4. China 773.6 849 959.7 883.9 1,123 1,285

    5. Dominican Republic 1,023 775 675 581 672 818

    6. Japan 662.1 562.8 572 516.5 589 642.1

    7. El Salvador 582 552 507 378 435 632

    14. Guatemala 259.5 305.2 251.7 210.2 248.2 287.7

  • Textile & Apparel Sector constitutes approximately one'half of all ESs exports. Since CAFTA, ES has become much more integrated with U.S. ' due to a yarn'forward rule of origin.

    No HTS Main apparel exports - Product Description2011

    In Dollars

    1 61091000 Cotton T-shirts, knitted or crocheted. 419,939,238

    2 61102020 Cotton sweaters, knitted or crocheted. 217,005,831

    3 61159590 Cotton stockings, socks, knitted or crocheted. 155,978,771

    4 61071100

    Cotton men's or boys' underpants and briefs, knitted or

    crocheted. 131,167,424

    5 61099010 MMF T-shirts, knitted or crocheted. 117,226,638

    6 61103030 MMF sweaters, knitted or crocheted. 81,765,617

    7 61046220 Cotton women's or girls' trousers, knitted or crocheted. 45,330,208

    8 61152100 Synthetic fibers panty hose and tights, knitted or crocheted. 43,037,989

    9 61034210

    Cotton men's or boys' trousers, breeches and shorts, knitted

    or crocheted. 40,412,256

    Source: USITC

  • HTS DescriptionImports from E.S.

    Imports from ROW

    Market Share

    6109100012MEN'S T-SHIRTS EXC UNDERWEAR OF COTTON, KNIT 145971 1426612 10.23%

    6110202069M/B PULLOVERS OF COTTON, LT 36% FLAX FIBERS, NESOI 127012 2898416 4.38%

    6109100004M/B T-SHIRTS, KNIT COT, CREW/V-NECK, SHORT SLEEVES 98561 599968 16.43%

    6107110010MEN'S UNDERPANTS AND BRIEFS, OF COTTON, KNIT 95631 693887 13.78%

    6110202079W/G PULLOVERS OF COTTON, LT 36% FLAX FIBERS, NESOI 68322 4888231 1.40%

    6110303053M/B PULLOVERS MAN-MADE FIBERS KNIT/CROCHETED NESOI 54748 899441 6.09%

    6109100014BOYS' T-SHIRTS EXC UNDERWEAR OF COTTON, KNIT 42852 281705 15.21%

    6107110020BOYS' UNDERPANTS AND BRIEFS, OF COTTON, KNIT 37746 146348 25.79%

    6102302010WOMEN'S OVERCOAT ETC OF OTHER MANMADE FIBERS, KNIT 33228 394440 8.42%

    6109100040

    WOMEN'S T-SHIRTS EXCEPT UNDERWEAR OF COTTON, KNIT 28945 786854 3.95%

    El Salvador Exports in Terms of Market Share

  • ES has adopted a series of strategies in order to become more competitive, not only as an apparel producer but through out the supply chain:

    El Salvador has developed important cotton spinning capabilities based on US cotton fiber.

    Out of all US textile exports to El Salvador, cotton yarn is the biggest product exported, followed by single knit cotton dyed fabrics.

    Source: USITC

    Description (Schedule B) 2010 2011 YTD 6/12 YE 6/11 YE 6/12

    Cotton Yarn 5205 & 5206 $22,661,334 $148,368,866 $45,483,613 $78,231,142 $124,821,390

    Manmade Fiber Dyed Knit Fabric $26,285,982 $39,995,404 $11,627,067 $38,911,995 $24,550,510

    Single Knit Cotton Dyed Fabrics $72,481,463 $48,742,056 $28,259,120 $63,519,567 $50,242,650

    Single knit cotton unbleached or

    bleached fabrics.$60,166,184 $62,544,363 $44,032,984 $59,757,562 $75,269,027

    Knit looped pile manmade fiber

    fabric. $13,016,074 $13,198,366 $98,02,523 $14,364,506 $14,891,287

  • Since CAFTA, ES has also diversified productive base new Synthetics/Man Made Cluster.

    New spinning capabilities, which are capital intensive.

    During 2010 and 2011, more than 50% of polyester staple fiber shipped to CAFTA DR Region was exported to ES.

    Description (Schedule B) 2010 2011 YTD 6/11 YTD 6/12

    5503200000 $2,407,611 $4,002,484 $2,507,915 $2,339,427

    Description (Schedule B) 2010 2011 YTD 6/11 YTD 6/12

    5503200000 $4,451,887 $7,276,699 $3,747,897 $3,292,497

    Exports of Polyester Staple Fiber to El Salvador

    Exports of Polyester Staple Fiber to CAFTA DR Region

    Source: USITC

  • Whats at Stake without a Yarn Forward Rule of

    Origin and long duty phase'outs? Exports and jobs.

    Source: US Department of Commerce

    2006 2007 2008 2009 2010 2011

    Total U.S. Exports (USD, Million)

    582 552 507 378 435 632

    % Change '7.0 '5.2 '8.1 '25.4 14.9 45.3

    Top U.S. Export Categor

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