WASHINGTON — Apparel companies are concerned about President Obama’s trade agenda, seeking clarity so they can best strategize their sourcing plans.
Executives attending the American Apparel & Footwear Association’s annual executive summit here last week pressed U.S. Trade Representative Ron Kirk about trade policy.
“Our top concern is trade,” said Wesley Card, chief executive officer of Jones Apparel Group Inc. “We’d like to hear that there is going to be a consistent commitment to free trade.”
In the first year of the administration, there was no clear movement on trade, said Rick Helfenbein, president of Luen Thai USA. Consumers in the U.S. “tend to think trade equals loss of jobs, but we need a vibrant trade policy,” Helfenbein said.
Companies are faced with a difficult and complex trade environment, said John Strasburger, vice president of sourcing for VF Americas Sourcing. The proposed Trans-Pacific Partnership in particular will help companies globally, he said.
“This is an industry that gets it — trade is critical to your lifestyles and you deliver a huge value proposition to American consumers,” Kirk told WWD.
Kirk’s remarks at the summit marked the second time this year he has addressed industry executives, and earlier this month he visited a Glen Raven textile plant in South Carolina.
“Having more active engagement domestically is the only way we’re going to get a more balanced debate about the value of trade,” Kirk said.
In remarks delivered on the closing day of the summit, Kirk said he believes the World Trade Organization-sponsored Doha Round talks, which the Obama administration has said it is committed to completing, remains the best option to address many industry concerns, including opening new markets and reducing duty rates.
The administration released a trade agenda earlier this year that said increased trade ties with the Asia-Pacific region and completion of the Doha talks aimed at reducing global tariffs were among its top priorities. As part of those trade goals, negotiations for the U.S. to join the Trans-Pacific Partnership, an agreement that would include Australia, Vietnam and Singapore, started Monday in Australia.
Kirk said the inclusion of Vietnam in the agreement, a move apparel importers support, is important because it is one of the larger economies in the Asia-Pacific area with which the U.S. does not have a formalized trade relationship. Vietnam is the second-largest source of apparel for the U.S. behind China. Gail Strickler, assistant U.S. trade representative for textiles, is part of the negotiating team.
Apparel industry executives are particularly watching what the administration will do to extend or renew existing trade benefits. Critics have charged the administration is letting three pending free trade agreements with Panama, South Korea and Columbia languish.
The Obama administration hasn’t been playing a strong role in promoting international trade, said Killick Datta, chief executive officer of International Brand Partners and newly elected chairman of the AAFA.
“The government must start helping,” Datta said.
Rick Darling, president of Li & Fung USA, said protectionism and the administration’s direction on trade are crucial issues for the apparel industry. On a macro level, efforts to ease unemployment are also vital, he said, because brands are all too aware of the impact flagging consumer confidence has on the business outlook.
Executives expressed optimism the worst of the current recession is in the past.
“The industry sees things getting better,” said Kevin Burke, president of AAFA, adding that the “dark period” apparel and footwear companies faced is fading. “What we saw was a reflection of what was going on in the economy in general. Clothing and footwear are some of the first things impacted.”
Executives said the outlook for this year is much brighter than it was in 2009.
“If you look at the retail environment in the U.S., the worst is behind us,” Helfenbein said.
Retailers have adjusted their approach to operations and focused in on offering better fashion to consumers in a timely manner, he said.
“We do see signs of recovery in the economy,” VF’s Strasburger said.
Peter Gabbe, chief operating officer of the Carole Hochman Design Group, said, “We’re coming out of the worst recession since the Great Depression and leadership will guide us out.”
A positive side effect of the economic problems of the last few years has been an increase of industry collaboration to address the issues brands face, he said.
Top priorities for the AAFA in the next year include helping members navigate the Consumer Product Safety Improvement Act, passing the Affordable Footwear Act, dealing with footwear freight rates and helping members navigate the current political environment, Burke said.
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