Yarn-Forward in CAFTA Defended in Congress as New Coalition Critiques CAFTA 'Red Tape'
The newly formed Coalition for Economic Partnerships in the Americas does not explicitly say that the textile rules of origin in CAFTA-DR need reform, though it calls on the administration "to do what previous administrations ignored: to structure trade to support investment in the United States and our allies in Central America. In order for our economy to thrive, we must eliminate the bureaucratic red tape that hinders production and investment in the region."
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“We firmly believe that our current trade policies can do more to enhance our economy and support investment in both the United States and Central America to realize the full potential of Central America’s apparel industry,” said CEPA spokesperson Beth Hughes, who is a top policy official at the American Apparel and Footwear Association. "We must shift away from historical zero-sum thinking and work towards an inclusive economic model that broadens the circle of winners and puts workers first.”
Even so, the National Council of Textile Organizations defended yarn-forward as key to the integrated fiber-fabric-cut-and-sew partnership between the U.S. and Central American countries and the Dominican Republic.
NCTO CEO Kim Glas, testifying Dec. 2 at the House Ways and Means Trade Subcommittee, said that even as exports rose sharply from CAFTA-DR countries, remarkably, "Some importers are seeking so-called relief." She called this backdoor access to CAFTA-DR for Asian fabric, and said, "These Trojan horse ideas must be rejected out of hand."
In her written testimony, she said, "Some point to the fact that CAFTA-DR textile and apparel trade has not more effectively countered China in textile and apparel production as evidence that the agreement’s rules are fundamentally broken or deficient. They would ask us to consider a wholesale reassessment of CAFTA-DR with an eye toward allowing Chinese textiles to displace American and regional textiles in an effort to artificially drive down the cost of sourcing from the Western Hemisphere. This would be a grave error that would not only reward China’s often illegal trade practices, including forced labor abuses, but would undermine existing and future investment and relegate the region to low-cost apparel assembly with no incentive to expand into more advanced manufacturing or product offerings."
She added that it would deindustrialize the participating countries, exacerbate the migration crisis, and "contribute to massive job losses in the U.S. and the entire region." According to the Office of the U.S. Trade Representative, the CAFTA-DR agreement supports about 134,000 jobs in the U.S., which is less than one-tenth of 1% of the total payroll employment in the country.