Back in March, the Office of the U.S. Trade Representative (USTR) notified Congress of the Administration’s intent to negotiate a Free Trade Agreement (FTA) with Kenya. This is a negotiation that could have a major impact on sourcing by fashion brands and retailers. The top U.S. import from Kenya in 2019 was apparel, valued at $454 million. We encourage USFIA members to get engaged and share your recommendations as the Administration prepares for these negotiations.
Earlier this month, USFIA filed comments with the Office of the United States Trade Representative (USTR) as the Administration prepares to negotiate a Free Trade Agreement with Kenya. Relying on the duty-free benefits of the African Growth and Opportunity Act (AGOA), Kenya has become a key supplier of apparel to the United States. In keeping with our mission of Fashion Made Possible by Global Trade USFIA asked USTR to "do no harm" to textile and apparel supply chains especially in the current climate, this would include maintaining current Rules of Origin and Tariff Preference Levels. You can read the full comments here.
In an analysis of the 133 public comments submitted on the U.S. - Kenya Free Trade Agreement (FTA), Dr. Sheng Lu and Kendall Keough of the University of Delaware report on trends in the views stakeholders held. Overall, the apparel industry expressed strong support for the U.S. and Kenya FTA. However, in regards to Rules of Origin, stakeholders seem to be split over whether to maintain current Rules of Origin under AGOA or enact stricter yarn forward Rules of Origin. The article also discussed how the structure of the FTA can promote regional textile and apparel supply chains that are relevant to the needs of global fashion brands and retailers. You can read the full article here.
On May 22nd, the Office of the United States Trade Representative (USTR) released the negotiating objectives for the United States-Kenya Free Trade Agreement (FTA). USTR says the main objective is to create a mutually beneficial trade agreement that can serve as a model for agreements with other African countries. Perhaps not surprisingly, the Administration objectives for the textile and apparel sector focuses on opening the Kenyan market to U.S exports, and suggests that there will be a battle over the Rules of Origin for the imports from Kenya that currently qualify for duty-free treatment thanks to AGOA. There are also substantial recommendations for provisions related to Enforcement and Trade Facilitation, including recommendations related to the de minimus shipments. Following with the release of the Administration's negotiating objectives, the International Trade Commission launched their review of the U.S.-Kenya Trade Agreement: Advice on the Probable Economic Effect of Providing Duty-free Treatment for Currently Dutiable Imports. The ITC will hold a virtual hearing on July 7th, and the final report is expected to be sent to USTR by September 16th.
Earlier this month, USFIA shared information about Vote Early Day. This is an initiative that asks the business community to observe October 24, 2020 as Vote Early Day. This initiative is designed to "help employees, customers, friends and family understand the many ways they can vote safely, securely and early...no one should have to choose between casting a ballot and preserving their health." The non-partisan group was formed in March and includes more than 100 partners in the business community including Levi Strauss and Co., Kenneth Cole, and Patagonia. To learn more and find out how you can get involved, click here.
On February 26th, USFIA attended a National Geographic Forum, The Circular Economy. Sponsored by Milliken, the Ellen MacArthur Foundation and Waste Management, the National Geographic auditorium was standing-room-only for the discussion about the circularity movement and new ideas to control waste. Momentum is growing for circularity and the presentations highlighted progress in several areas.
The first panel emphasized the urban planning aspect of circularity – how to manage waste in urban settings. Speakers from New York City, Toronto and India shared their perspectives and ideas. Bridget Anderson, deputy commissioner for recycling and sustainability in the NYC Department of Sanitation, said that 6% of the city’s waste is textiles and they have introduced a program to try to reclaim textiles, with bins around the city.
The CEO of Milliken, Halsey Cook, joined the second panel and spoke about the role that corporations must play to support the circular economy. When asked whether circularity means the end of capitalism, he said his perspective is that capitalism is evolving, and that companies need to find ways to deal with environmental and geopolitical risks. Plus, there are economic advantages to companies who embrace the circular economy. That view was echoed by the CEO of Waste Management who focused on the business of recycling. He said it is key for companies to find the value in recycling, especially for the low-value plastics that are not always accepted by recycling centers. The head of the Alliance to End Plastic Waste said there are 47 companies engaged in the Alliance and they are working on solutions to solve the problem. He also raised the issue that recyclers need a steady supply of quality plastics for reuse since demand is growing.
The final panel focused on re-thinking solutions for plastic, with perspectives from recyclers, innovators and policy initiatives. As a reminder that we need to expand the opportunities for consumers to recycle, the CEO of the Recycling Partnership, Keefe Harrison, said that only half of American households have access to curbside recycling, and so far, curbside recycling is only available for 32% of potentially recyclable products.
With countries around the world beginning to lift stay-at-home orders, and retail operations beginning to expand beyond on-line sales, USFIA will continue to provide information to keep members up-to-date. During May, in addition to updating the COVID-19 resource information on the website, USFIA provided two special updates that could be helpful for your business planning operations.
On May 15, USFIA released a special edition of our Sourcing Trends and Outlook Report. This member-exclusive report focuses on the sourcing patterns during the month of March – the most recent data available from the U.S. government and the first month that clearly shows the impact of COVID-19.
On May 20, USFIA and our 2020 Premier Partner PwC hosted a webinar, The Future Retail Landscape: Looking Beyond COVID-19. The webinar offers new insights into the impact of this pandemic on retail operations. If you missed it you can watch the recording here.
This month, USFIA attended The Century’s Foundation event, “After Trump: Defining a Progressive U.S. Policy for the Middle East.” The think tank’s discussion was focused on debating and defining progressive policy frameworks for the Middle East and finding sustainable alternatives to the actions of the Trump Administration. The speakers discussed a practical policy to re-engage and contain Iran, strategies to establish a rebalance of militarism, and how the 2020 election will be an election where national security issues matter
Representative Ro Khanna (D-CA) kicked off the event by discussing how the U.S. should be a driving force around the world for freedom, human rights, and peace. “Unilateral military interventions are counterproductive to our strategic goals and prolong violence and suffering. I support working together with the international community to find thoughtful diplomatic solutions for the complex issues facing our world,” Khanna said. Rep. Khanna and Senator Bernie Sanders (I-VT) introduced the No War Against Iran Act (H.R.55432) earlier this year. The bill was passed by the House and prevents any money from being used for unauthorized military action.
After a national security impeachment and a near war with Iran in early 2020, national security matters are going to be a core focus in the 2020 Presidential election, Senator Christopher Murphy (D-CT) said at the event. Learning from mistakes of the past, the U.S. can create a progressive foreign policy to create strong U.S. domestic and national security, Murphy said. He continued by saying a strong military will always be a vital piece of American national security, but by increasing the U.S. foreign affairs budget and emphasizing funding for international development, additional foreign service officers, crisis response, and humanitarian relief, the U.S. could establish a strong progressive policy that responds to threats posed to the U.S. and our allies.
The event then turned to a panel discussion with Melissa Dalton of Center for Strategic and International Studies, Sarah Margon of Open Society Foundation, and Dina Esfandiary of The Century Foundation. Dalton offered several steps the Administration could take for a more “responsible” policy for the Middle East, including creating guidelines for how the military is being used around the globe and emphasizing non-military tools, and strategizing with allies to create better mitigation strategies. Margon agreed with Dalton and reiterated the importance of finding a better balance of military focus and engagement. Additionally, Margon said human rights should be centralized in foreign policy and sanctions should continue to be used over human rights abuse. Dina Esfandiary then turned the focus on Iran and explained how the current Administration’s strategy has only resulted in the brink of war. Esfandiary said the principles of de-escalation, diplomacy, and containment should guide U.S. policy toward Iran going forward.