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NRF Applauds House Members Asking Administration Not to Restrict Textile/Apparel in Trade Pact

For Immediate Release
Contact: J. Craig Shearman (202) 626) 8134

NRF Applauds House Members Asking Administration Not to Restrict Textile and Apparel in New Trade Agreement

WASHINGTON, October 25, 2011 – The National Retail Federation today welcomed a bipartisan letter from members of the House asking U.S. Trade Representative Ron Kirk to avoid restrictions on textiles and apparel in the Trans-Pacific Partnership trade agreement currently under negotiation.

“Restrictions such as the ‘yarn forward’ rule have severely undermined benefits that could otherwise be reaped from recent free trade agreements and should not be repeated now that a major new agreement is under negotiation,” NRF Vice President and International Trade Counsel Erik Autor said. “These restrictions make it difficult for retailers to use these agreements and thereby provide American families with the products they need at prices they can afford.”

“Removing these restrictions would help promote new trade and investment, thereby creating U.S. jobs and export opportunities while holding down prices for American consumers. That’s a win-win that’s good for the U.S. economy,” Autor added.

A letter signed by 15 House Republicans and 15 House Democrats today asked Kirk to leave “outdated and inflexible rules” on textiles and apparel out of the TPP, which is currently undergoing its latest round of negotiations in Lima, Peru. In addition, the lawmakers argued that a more flexible approach on textile and apparel rules would help provide leverage necessary to achieve the best possible agreement for U.S. economic interests.

At issue is the so-called “yarn forward” rule of origin. Under the rule, apparel that is eligible for duty-free treatment under a free trade agreement must be sewn from fabric woven from yarn spun in the country or countries covered by the agreement. The restriction often makes apparel ineligible because all of the materials and inputs that go into a garment are not always available from the affected nations.

U.S. apparel and textile makers have supported the yarn forward rule and other restrictive rules on apparel trade under the claim that they protect U.S. jobs. But NRF has countered that most of the apparel products in question are no longer made in the United States, so the restriction merely drives up prices while doing little or nothing to create jobs. In addition, the yarn-forward rule has failed to generate significant new trade and investment in textiles and apparel under other free trade agreements, including increased exports of U.S. yarns and fabrics. Finally, only a comparatively small percentage of the value of any given piece of merchandise goes to the factory where it is made, with the majority of the price going to U.S. designers, marketers and others along the supply chain.

As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s Retail Means Jobs campaign emphasizes the economic importance of retail and encourages policymakers to support a Jobs, Innovation and Consumer Value Agenda aimed at boosting economic growth and job creation. www.nrf.com