By  on December 19, 2013

Industry groups outlined their goals and concerns with a U.S. and European Union free-trade deal on Wednesday during the third round of trade talks here between the world’s biggest trading blocs.

The Transatlantic Trade and Investment Partnership deal under negotiation has major implications for imports and exports of fashion and cosmetics products.

Stephen Lamar, executive vice president of the American Apparel & Footwear Association, testifying at a stakeholder’s meeting here, urged negotiators to immediately resolve an ongoing trade dispute between the U.S. and EU involving U.S. jeansmakers selling to the European market that has been a source of friction in the first three rounds of trade talks.

At the end of April, the EU more than tripled the tariff on U.S.-made women’s and girls’ cotton denim jeans to 38 percent, in retaliation for not resolving a World Trade Organization case that the EU won against the U.S. in 2005.

“We remain deeply concerned that the EU continues to maintain a punitive 26 percent tariff on top of an existing 12 percent duty on certain women’s jeans made in the United States and exported to Europe that they imposed before this,” Lamar said. “We urge that these duties be eliminated immediately.”

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Among the key objectives Lamar cited for the trade deal were an immediate and reciprocal duty elimination on imports to both the U.S. and EU; a flexible rule of origin that would allow retailers and brands to use inputs such as yarns and fabrics from anywhere in the world and receive duty-free benefits; the preservation of the Berry Amendment, which requires apparel and footwear purchased by the U.S. military to be made in the U.S.; harmonization of regulations covering labeling and product safety standards, and more streamlined Customs measures on both sides of the Atlantic.

Lamar said the U.S. collected $580 million in tariffs on imports of apparel, textiles and footwear from Europe in 2012, representing roughly 12 percent of all duties collected on imports from Europe, despite the fact that the industry’s imports account for just 2 percent of all European imports to the U.S.

“Duty reduction and elimination on the goods in our sector, on an immediate and reciprocal basis, would have a huge effect in reducing trade costs and barriers that disproportionately affect this industry, and which unnecessarily impose costs on consumers in both the United States and Europe,” Lamar said.

He also noted that duty elimination would be “meaningless” if a rule of origin, such as a yarn-forward rule, which is contained in many U.S. trade deals, is used in the T-TIP.

Francine Lamoriello, executive vice president of global strategies for the Personal Care Products Council, who also spoke on behalf of Cosmetics Europe, said the U.S. and EU cosmetics industry are aligned on where the T-TIP can provide regulatory convergence in the sector.

“We believe that T-TIP offers a tremendous opportunity for regulatory convergence in our sector and that the conditions of the cosmetics industry and market are particularly ripe for convergence,” she said.

Standards and regulations covering cosmetics and chemicals have long been a source of friction between the U.S. and EU because of wide divergences between both sides. In March, for example, the EU implemented a ban on the import and sale of cosmetics and ingredients that were tested on animals. The ban prohibits companies that sell cosmetics in the EU from testing them on animals anywhere in the world.

Lamoriello said finding alternative methods to animal testing in cosmetics should be a key area of focus in the negotiations for the industry. Other key objectives she cited included aligning the definition of cosmetics; agreeing on mutually recognized test methods determining the safety of ingredients and products; avoiding requirements of labeling and notification for the use of nanotechnology in cosmetics; aligning a more mutual recognition of approved ingredients and their condition of use, and streamlining labeling requirements.

“Our regulatory divergences, where they do exist, are not based on fundamental differences of principles of science; rather, they are the result of decades-long practices and political decisions and as such we believe can be resolved. However, regulatory divergences in our sector do continue to pose significant barriers to trade between our two regions to innovation and to growth,” Lamoriello said.

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