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September 21, 2012 - NRF Seeks ‘21st Century Approach’ to Trans-Pacific Partnership Trade Agreement

Following the latest round of negotiations on the pending Trans-Pacific Partnership trade agreement, NRF this week urged negotiators to abandon out-of-date restrictions on apparel trade in favor of a “21st Century approach” that would support U.S. jobs that rely on imported goods.

“Inflexible rules on apparel trade … don’t work because they are not compatible with how businesses operate in the 21st Century,” NRF President and CEO Matthew Shay said. “Without a more flexible approach, these rules will continue their record of failure in promoting new trade and investment, and will end up being a barrier to both U.S. imports and exports.”

NRF is a leading member of the Trans-Pacific Partnership Apparel Coalition, which was on hand when negotiators held their 14th round of talks last week in Leesburg, Va., just outside Washington.

Among other concerns, NRF and other coalition members are fighting to keep a highly restrictive regulation known as the “yarn forward” rule out of the TPP. Included in most trade deals since 1992’s North American Free Trade Agreement, the rule requires that all materials used in production of a garment – beginning with the yarn used to create the fabric – be from the countries covered by the FTA in order to be eligible for duty-free treatment. Since many apparel-producing countries, including those in the TPP talks, do not have significant yarn and fabric production, the requirement is often impossible to meet.

Coalition members are concerned that by restricting imports, the yarn forward rule negatively impacts U.S. jobs that depend on imported goods. Economic studies show that 70 to 80 percent of the retail value of imported products is generated in the United States by American workers.

Besides the United States, the TPP includes Brunei, Chile, New Zealand, Singapore, Australia, Malaysia, Peru, and Vietnam.

© 2012 National Retail Federation