Global Trade

The United States Fashion Industry Association (USFIA) hosted our annual Washington Trade Symposium on Capitol Hill. The highlight of the day was the welcome remarks by U.S. Rep. Jackie Walorski (R-IN), a member of the U.S. House Ways & Means Committee, who discussed her commitment to trade policy that works for American companies and consumers.

When the United States Association of Importers of Textiles & Apparel (USA-ITA) was founded in 1989, the nine, forward-thinking founding members specifically used the word “importers” in the association’s name. Why? These apparel brands and retailers were tired of Washington just talking about exports—and wanted to remind policymakers that imports are good, too, in our effort to eliminate the global apparel quota system. After all, these companies’ imports help create American jobs, expand the U.S. economy, and provide families with more options when they shop.

Our member companies were, and remain today, some of the most innovative job creators in the country, with enormous growth potential given the fact that Americans will always need to buy clothes and shoes. (And, in fact, many of us like to buy more clothes and shoes than we need!) 

Happily, in 2005, USA-ITA was successful in eliminating those quotas that burdened our industry and hindered our members’ abilities to create jobs—not to mention, produce affordable clothes and shoes for American families.

Since then, the industry has rapidly globalized and our members rely on complex global value chains so they can produce the best product, at the best price, and thus remain competitive and grow. And today, there are endless possibilities for sourcing fashion products. For example, a company might choose yarn from China, fabric from Mexico, and a sewing factory in Vietnam to produce a garment that was wholly designed and marketed in New York City, San Francisco, or Columbus. Increasingly, that garment is not only shipped to the United States, but also shipped to stores in Europe, Asia, and South America, too, where American-designed fashion is highly sought after.

Despite the globalization of the industry and value chains, however, barriers to trade remain and new challenges arise every day for U.S.-based fashion brands and retailers that do business globally. The association has evolved with our members to address these barriers and challenges, which led us to rebrand as the United States Fashion Industry Association last year.  (You can read more about that project, and why we chose our new name, here.)

In our view, there’s no reason why imports of clothing, shoes, and fashion accessories should be subject to the outdated, protectionist, exorbitantly high tariffs. According to the International Trade Commission, the average duty rate for our industry is currently 12.2 percent, with peak duties as high as 36 percent. This is in stark contrast to the average duty rate for all manufactured imports, which is just 2.8 percent. It seems more than a little unfair, especially since we all have to wear clothes.

The fashion industry has always known that imports work for America, so the United States Fashion Industry Association is proud to again support Imports Work for America Week, an initiative by a coalition of organizations and companies that depend on access to imports to compete globally. FromMay 5-9, 2014, we’ll be working with the coalition to promote how imports work for jobs, families, and manufacturing in the United States and economic development in our trading partner countries around the world.

It’s clear that in the fashion industry, imports work to create jobs—after all, a recent study showed that, on average, 70 percent of the final retail price for apparel represents value added in the United States. These imports also work for American families, who have access to affordable, high-quality, and even fashionable clothing, shoes, accessories, and home products. And, these imports work for economic development, as our members work to source in a socially responsible way, especially by creating opportunities for women in developing countries. 

Stay tuned to our Facebook and Twitter all week long for more insight on how imports work for America, and visit www.importsworkforamerica.com to learn more about the coalition.

On December 17, 2013, the United States Fashion Industry Association (USFIA) participated in a lobby day on Capitol Hill to advocate for renewal of the Nicaragua Trade Preference Level (TPL) in the CAFTA-DR trade agreement. 

On February 26, 2014, the United States Fashion Industry Association (USFIA) participated in a stakeholder conference call with U.S. Trade Representative Michael Froman, who provided an update on the recent Trans-Pacific Partnership (TPP) meetings that just wrapped up in Singapore.

On February 10, 2014, United States Fashion Industry Association (USFIA) President Julia K. Hughes attended a reception sponsored by Vietnamese Ambassador Nguyen Quoc Cuong to celebrate the 20^th Anniversary of Trade Relations between Vietnam and the United States. Secretary of State John Kerry, a long-time supporter of normal trade relations between the U.S. and Vietnam, highlighted the importance of the bilateral relationship and the opportunities that will be created by the Trans-Pacific Partnership. 

Following the release of the USFIA Fashion Industry Benchmarking Study, USFIA President Julia Hughes wrote an op-ed for Sourcing Journal about industry executives’ top concern this year: trade protectionism. Click here to read the op-ed on the Sourcing Journal website.

In the December 12, 2016, issue of Sourcing Journal, USFIA President Julia K. Hughes provided some “advice” to President-Elect Donald Trump on what to do about trade. “Donald Trump isn’t the only one taking up residence on Pennsylvania Avenue. The United States Fashion Industry Association (USFIA) recently moved into our new offices just steps from the White House—and as we packed and unpacked the history of our organization, I couldn’t help but think about the election, and the impact the new Administration could have on the fashion industry,” she wrote. “We suspect the new president will not abolish NAFTA or other existing trade agreements—but there is nonetheless a sharp shift in the tone of the national discussion about trade. This is worrisome because the fashion industry is global and depends on trade around the world to create high-quality jobs in the United States. So, we have a few suggestions for our soon-to-be-new neighbor.” You can read our four suggestions on the Sourcing Journal website.

On September 22, 2014, USFIA President Julia K. Hughes published an op-ed in the Sourcing Journal calling for a new approach to the Trans-Pacific Partnership (TPP) negotiations for apparel. She writes:

We hear over and over again from sourcing executives—most recently during our panel at SOURCING at MAGIC in August—that they don’t use free trade agreements and preference programs because the agreements don’t cover the products their customers want, and when they do, the rules are so complicated that it’s more time consuming and expensive than sourcing from China or Vietnam.

TPP is exciting because it could be a real game changer in this regard. It could address the fact that we don’t have many trade agreements with countries in Asia, where our members are already doing most of their business. TPP could create huge savings opportunities for U.S. fashion brands and retailers, allowing them to grow their businesses, hire more employees, and of course, pass along savings to consumers.

So, the bases are loaded—and the trade negotiators have to decide how to end the game.

If negotiators continue to push for strict yarn-forward rules of origin, long duty phase outs, and a limited short supply list that doesn’t address our industry’s needs, I don’t see brands and retailers utilizing the agreement.

But if negotiators take a new approach—with a flexible rule of origin, duty-free access on Day One, and an expanded short supply list that covers the products companies are really buying—then TPP could be a grand slam.

The full-oped is available on the Sourcing Journal website.

On February 12, 2016, USFIA President Julia K. Hughes joined Mara Burr, former Deputy Assistant U.S. Trade Representative for South and Central Asia, in publishing an op-ed in the Sourcing Journal on the broader impact of the Trans-Pacific Partnership (TPP). The op-ed was published during the ASEAN Summit in California, and discusses the geopolitical implications of the historic agreement. The op-ed is available on the Sourcing Journal website. 

On July 8, 2014, the United States Fashion Industry Association (USFIA) published an op-ed in the Sourcing Journal on the need to make Free Trade Agreements, and especially the Trans-Pacific Partnership (TPP), work for our industry. USFIA President Julia K. Hughes argues that while TPP could be a game changer for our industry and the broader U.S. economy, the data shows that companies will not take advantage of it unless there are dramatic changes to the rules of origin and market access provisions. The op-ed is available on the Sourcing Journal website.

Following the announcement that the Trans-Pacific Partnership (TPP) Ministers have concluded negotiations and reached a final agreement, the United States Fashion Industry Association (USFIA) released a statement recognizing the conclusion of the deal and expressing hope that the agreement will benefit the fashion industry:

“The Trans-Pacific Partnership represents an important opportunity for American fashion brands, retailers, importers, and wholesalers, who are already doing significant business in several TPP partner countries,” says Julia K. Hughes, President of USFIA. “On behalf of our members, thank you to U.S. Trade Representative Michael Froman and his team for their many years of hard work to conclude this agreement.” 

“The fashion industry has been eagerly awaiting the completion of this agreement and we look forward to seeing the final text to see how it can benefit our members,” continued Hughes. “We remain hopeful that the TPP will indeed be a high-standard agreement that recognizes the 21st-century global value chain and economic contributions of these companies, which work hard to create high-quality jobs in the United States and affordable, high-quality apparel products for American families,” she concluded. 

According to the 2015 USFIA Fashion Industry Benchmarking Study, which we released in June, we found that our members already source from five TPP partner countries: Vietnam, Peru, Mexico, Malaysia, and the United States. Nearly 80 percent of respondents said they expect the TPP to affect their business practices. However, the level of impact depends on the rules of origin and market access provisions; 83 percent called for abandoning the strict “yarn-forward” rule of origin, and 45 percent hoped the TPP short-supply list would be expanded. 

“We understand the final agreement contains a yarn-forward rule of origin and limited short-supply list, though we remain hopeful it also will include many opportunities for fashion brands, retailers, importers, and wholesalers to expand their global businesses,” concluded Hughes. 

The full statement is available on our website. 

On January 9, 2014, the United States Fashion Industry Association released a statement applauding the introduction of the legislation and urging swift passage: 

“Trade Promotion Authority is essential for the conclusion of successful, high-standard, 21st-century trade agreements,” says Julia K. Hughes, President of the United States Fashion Industry Association. "The United States Fashion Industry Association applauds the introduction of TPA and urges Congress to swiftly pass the legislation so the Administration can conclude the important trade negotiations on the agenda, particularly the Trans-Pacific Partnership (TPP) and the Transatlantic Trade & Investment Partnership (TTIP).” 

These trade agreements are especially important for the U.S. fashion industry, which includes textile and apparel brands, retailers, importers, and wholesalers based in the United States and doing business globally. 

“The fashion industry relies on new markets for both imports and exports of inputs and finished products," adds Hughes. "TPA will allow these markets to be open for U.S. fashion businesses even sooner, and grow the economy and jobs in industries across the United States.” 

The Trade Benefits America coalition, comprised of over 160 U.S. business and agricultural organizations, also applauded the introduction. USFIA is a member of the coalition. For more information on TPA, visit www.tradebenefitsamerica.org. 

The United States Fashion Industry Association (USFIA) joined with Americans for Free Trade in sending a letter to U.S. Trade Representative Robert Lighthizer requesting an exclusion process for the most recent wave of tariffs on $200 billion in goods. While an exclusion process was provided to American businesses for the nearly $50 billion in previously announced tariffs (Lists 1 and 2), the administration has said that no similar process will be provided on the most recent tariffs on $200 billion (List 3) in goods that went into effect Monday, September 24, 2018. The letter is available here.

On May 16, 2017, USFIA joined other apparel and retail organizations in sending a letter to Ambassador Lighthizer to express strong support for the continuation of the North American Free Trade Agreement (NAFTA). The letter agrees that it may be time to update the agreement “to reflect today’s business reality and better prepare for future trade patterns,” but urges him to ensure that any changes or improvements “provide for seamless integration with the existing NAFTA agreement.” The letter is available here.

May 9-13, 2016, is the fifth-annual Imports Work for America Week, supported by the United States Fashion Industry Association (USFIA), the U.S. Chamber of Commerce, and other trade associations. More information and resources supporting the value of imports are available at http://www.importswork.com. 

Today, USFIA President Julia K. Hughes testified during the Office of the U.S. Trade Representative’s hearing on Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. In her testimony, she emphasized the importance of global trade for our industry and explained how tariffs would harm jobs in our sector and the price of clothing for consumers. The testimony as distributed at the meeting is available here.

From January 13-15, 2016, the U.S. International Trade Commission (ITC) held three days of hearings on the “Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.” On the last day of hearings, representatives from major U.S. fashion, footwear, retail, and cosmetics associations testified about the impact of the TPP on the industries. All of the organizations expressed support for TPP, but many also noted the missed opportunities, especially for textiles and apparel. In her testimony, USFIA President Julia K. Hughes expressed the association’s support for “better market access, not just to boost U.S. exports or U.S. imports, but to facilitate global trade.” However,

USFIA continues to believe that the United States should change its negotiating stance to recognize the global value chain and the jobs created by American brands, retailers, and importers. Unfortunately, the TPP falls short. There are certainly benefits in the agreement for USFIA member companies, but the agreement maintains the basic restrictive provisions that have existed since the negotiation of NAFTA in the early 1990s, and which ignore the international scope of the fashion industry… 

From this perspective, USFIA and our members applaud the conclusion of the TPP agreement. Nevertheless, we remain disappointed that the negotiators missed the opportunity to craft an agreement that recognizes the way that fashion brands and retailers do business. The lengthy duty phase-outs for many key products, and the reliance on a yarn-forward rule of origin, limit opportunities for our members to reach new consumers in the TPP countries and limit our opportunities to create jobs in the United States. 

Hughes expanded on the benefits and opportunities in the agreement in her testimony, which is available for download here.

For the latest on the status of the TPP, we encourage you to attend USFIA Fashion Forward: San Francisco on February 12th, where Joshua Teitelbaum, Deputy Assistant Secretary for Textiles, Consumer Goods, & Materials at the U.S. Department of Commerce, will provide an update

On November 16, 2018, the United States Fashion Industry Association (USFIA) testified at the Office of the U.S. Trade Representative’s hearing on the U.S.-Mexico-Canada Agreement (USMCA). USFIA President Julia Hughes’ testimony as delivered is available here.

For more information on the textile and apparel testimony at the hearing, take a look at Dr. Sheng Lu’s blog, in which he summarized comments from across the industry. In addition, CNN Politics outlined five pitfalls in the agreement, including pockets, featuring excerpts from USFIA’s testimony.

On June 27, 2017, USFIA Washington Counsel David Spooner, former Chief Textile and Apparel Negotiator at the Office of the U.S. Trade Representative (USTR), testified during the USTR hearing on the North American Free Trade Agreement (NAFTA) at the U.S. International Trade Commission.

“A well-functioning Western Hemisphere supply chain is vital to maintain American jobs at home, as well as employment in the region,” he said. “Any efforts to make it more difficult to source apparel from both Mexico and Canada will encourage sourcing from other parts of the world, and will reduce employment in the North American apparel supply chain.”

Spooner, who negotiated the textile and apparel provisions of 10 U.S. Free Trade Agreements while at USTR, emphasized the need to maintain the current global value chains in the Western Hemisphere. In the testimony, he provided eight recommendations for how NAFTA could be improved.

The full testimony is available here.

The press release on the testimony is available here.

United States Fashion Industry Association (USFIA) President Julia K. Hughes testified during the Office of the U.S. Trade Representative’s public hearing on the proposed tariffs on approximately $200 billion worth of Chinese products under Section 301 of the Trade Act of 1974.

The list includes several products manufactured and sold by the apparel industry, including hats and headwear in Chapter 65 of the Harmonized Tariff Schedule, luggage and handbags in Chapters 42 and 46, and leather and faux leather apparel and products in Chapter 42, as well as other textiles, furniture, feathers, and more.

“We continue to find it hard to believe that the Administration really wants to impose a tax on the basic household purchases of Americans, and we ask you to reconsider this action. The path forward to change the policies in China that are the subject of the 301 investigation is not to tax consumer products. We continue to believe that the best action is to work with our trading partners, and the Chinese government, to negotiate global solutions,” said Hughes in her testimony.  

Click here to read the full testimony and press release.