Fashion Intel & Analysis
The Office of the U.S. Trade Representative (USTR) released the objectives for the U.S.-UK trade negotiations. “As the first and fifth biggest global economies, the U.S. economic relationship with the UK is one of the largest and most complex in the world, with annual two-way trade totaling more than $230 billion,” says the document. “Despite this significant trade volume, multiple tariff and non-tariff barriers have challenged U.S. exporters in key sectors while the UK has been a Member State of the EU and therefore a part of the common trade policy of the EU. The UK’s decision to leave the EU creates a new opportunity to expand and deepen the U.S.-UK trade relationship,” the document continues.
Regarding apparel, the document contains the same objectives found in the U.S.-EU negotiations. The objective is to “secure duty-free access for U.S. textile and apparel products and seek to improve competitive opportunities for exports of U.S. textile and apparel products while taking into account U.S. import sensitivities.” The objectives also specifically note textiles in the rules of origin objectives: “Establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles.”
The full document can be found here.
This morning the U.S. Trade Representative Robert Lighthizer appeared before the House Ways and Means Committee as the sole witness for a hearing on U.S.-China Trade Issues. The members of the committee asked questions on a wide range of issues, with the main focus on the current U.S.-China 301 negotiations.
Many members raised concerns about the impact of the 301 retaliation and the 232 penalty tariffs on American companies. Representative Jackie Walorski (R-IN) introduced into the record today's letterfrom Americans for Free Trade as well as the Congressional letter asking for an exclusion process for the third tranche of 301 tariffs. In response to complaints about the impact of the 301 tariffs, Lighthizer said several times that his objective is to move manufacturing from China to the United States. One issue that is likely to be raised again is whether the Congress should review and vote on any agreement with China. Representative Lloyd Doggett (D-TX) challenged Lighthizer that the President is calling the final outcome with China a "trade agreement." Lighthizer replied that whatever is agreed to with China will be an executive agreement under the terms of Section 301 and thus not subject to review by the Congress, even if issues beyond the 301 case (such as currency or agriculture trade) are included in the deal. Finally, there was a brief exchange with Representative Brad Wenstrup (R-OH) who asked about the Administration's position on trade with Haiti, and whether they support an extension for the CBTPA, which is scheduled to expire on September 30, 2020. Lighthizer said there is no Administration position.
The U.S. Department of Commerce issued affirmative preliminary determination in the antidumping duty (AD) investigation on imports of steel racks from China, determining steel racks from China are being dumped in the United States at margins ranging from 18.08 to 144.50 percent. Commerce will instruct U.S. Customs and Border Protection to collect cash deposits from importers of steel racks from China based on preliminary rates. The petitioner estimates that importers of steel racks were valued at approximately $200 million in 2017. The investigations were initiated based on petitions filed by the Coalition for Fair Rack Imports. Commerce is expected to make the final decision on or before July 18; if the decision is affirmative, the U.S. International Trade Commission (ITC) will make a final injury determination on September 3. The Commerce Department fact sheet is available here.
The United States Fashion Industry Association (USFIA) joined the Americans for Free Trade letter today to President Trump acknowledging the progress on U.S.-China negotiations and urging a final deal be made soon to ensure certainty. “It is our hope that this momentum will build in the weeks ahead and lead to a final deal that addresses structural issues in China, removes tariffs on both sides, and eliminates trade uncertainty facing American businesses and farmers,” the letter states. “Although we are encouraged by the latest signs of progress, it is important to note that existing tariffs and shifting deadlines are hanging over American businesses and farmers and undermining their ability to grow, invest, and plan for the future.” The full letter can be found here.
Earlier this month the Cotton Campaign held its annual strategy meeting and for the first time also met with a senior government officials from Uzbekistan. In a press release, the Cotton Campaign said that they are encouraged by the significant progress to eliminate forced labor in the Uzbekistan cotton sector, and both sides agreed on continue discussions in 2019.
The Cotton Campaign will develop a roadmap for moving forward that outlines the specific actions needed to eliminate forced labor in the cotton harvest. These discussions will also include brands and retailers. The Uzbek Cotton Pledge remains in place – this is a commitment from 310 apparel brands to not “knowingly source” cotton from Uzbekistan until it is no longer produced with government-organized forced labor. The Cotton Campaign will look for demonstrable progress during the 2019 cotton harvest in three areas: 1) systemic forced labor has verifiably ended, 2) structural reforms are sufficiently advanced to prevent force labor from returning, and 3) civil society is enabled to monitor and report on the cotton harvest and labor conditions.