IMPORT & EXPORT
2013 Year in Review: U.S. Concentrates on Concluding Two Major Free-Trade Pacts
The United States has free-trade agreements with 20 countries. But if it finishes up negotiating two major free-trade accords with Europe and countries around the Pacific, it will have free trade with another 34.
U.S. Trade Representative Michael Froman has been shuttling around the world for a series of negotiations on two agreements, the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership.
The Trans-Pacific Partnership encompasses the United States and 11 other countries. They are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. (We already have free-trade agreements with five of these countries.) The group encompasses 793 million consumers.
A series of negotiations have been going on since 2005. The last negotiations were held in Singapore on Dec 10. Another round is scheduled for January.
Some sticking points in the apparel and textiles category have been whether a yarn-forward provision should be included. Other free-trade pacts have embraced yarn-forward rules, meaning that tariff-free clothing must be made from yarns that come from the free-trade region. Countries such as Vietnam, which does not manufacture much of its own yarn, would like to see the yarn-forward rule eliminated so it could import fabric from China, South Korea or other Asian countries to qualify for no tariffs on their goods.
The yarn-forward rule is supported by U.S. organizations such as the National Council of Textile Organizations in Washington, D.C., which represents U.S. textile and apparel manufacturers that would like to expand their market.
Some are predicting the TPP negotiations could conclude in 2014.
But for the Trans-Atlantic Trade and Investment Partnership with 28 countries in the European Union, negotiations just got underway this last summer. So far there have been three meetings with the most recent talks concluding Nov. 20 in Washington, D.C.
This trade pact is a huge deal because Europe and the United States account for 60 percent of the world’s gross domestic product and 33 percent of the international trade in goods. The European Commission believes a free-trade accord could boost by 50 percent the flow of goods between the two countries.
That could lead to cheaper French cheese on U.S. supermarket shelves and less costly Los Angeles–made blue jeans in European clothing stores.
In 2012, the United States exported $458 billion in goods and private services to the EU, our largest export market. When it comes to apparel and textiles, the U.S. exported $2.3 billion in clothing and fabric in 2012.