House Members Ask Commerce Not to Change CAFTA Short Supply Petition Process
Ahead of a Senate Finance Committee International Trade Subcommittee hearing on how to encourage more integration of the U.S. and the Central and South American economies, 38 House members, from both parties, wrote Commerce Secretary Gina Raimondo, asking that she not make it easier for apparel manufacturers to win exceptions to the Dominican Republic-Central America Free Trade Agreement's yarn-forward rules of origin.
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The manufacturers currently can argue that certain fabrics are not available in commercial quantities in the Dominican Republic, the U.S., Costa Rica, El Salvador, Guatemala, Honduras or Nicaragua, so they should be able to buy them from other suppliers and have the finished garments still be able to be exported duty free to the U.S. That's called short supply.
CAFTA-DR's short supply list is "considerably more expansive" than other FTAs, with 150 items, the members wrote. The letter to Raimondo, which was released publicly May 16, was led by Reps. Patrick McHenry, R-N.C., and Bill Pascrell, D-N.J. "We strongly urge you to continue following the longstanding CAFTA-DR short supply list process, which requires requestors to submit public petitions for review, and reject requests to circumvent it,” the letter says.
“Bypassing the existing short supply petition and review system could result in non-signatory nations gaining a backdoor entrance to CAFTA-DR benefits. We fear that the People’s Republic of China (PRC), as the dominant global supplier of yarns and fabrics, would be the major winner under this proposal," the lawmakers wrote. “The PRC could quickly displace existing sales and exports for U.S. and CAFTA-DR manufacturers of textiles. It is vital that the U.S. avoids any infiltration of our FTAs by the PRC's predatory practices, including the country's abhorrent and large-scale utilization of forced labor in the Xinjiang province.”