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Obama Names Choices for USTR, Commerce

Froman's White House experience seen as a plus in trade talks.

Mike Froman and President Obama

WASHINGTON — President Obama on Thursday nominated Michael Froman, currently a senior economic adviser, for the U.S. Trade Representative’s post, and Penny Pritzker, a Chicago businesswoman and longtime political supporter and fund-raiser, as Commerce Secretary.

This story first appeared in the May 3, 2013 issue of WWD.  Subscribe Today.

Both cabinet-level posts will oversee agencies that craft policies and regulations affecting the fashion industry, from international trade to domestic manufacturing, and must be confirmed by the Senate.

Froman, deputy national security adviser for international economic affairs at the White House, has played a key role in Obama’s trade agenda over the past few years, often working alongside former USTR Ron Kirk, who stepped down in February.

“Over the past four years, he’s been my point person at global forums like the G-8 and G-20 and…he’s been the driving force, oftentimes, in organizing these incredible international summits in which huge amounts of business gets done,” Obama said in the Rose Garden. “He has won the respect of our trading partners around the world. He has also won a reputation as being an extraordinarily tough negotiator while doing it. He does not rest until he’s delivered the best possible deal for American businesses and American workers. He’s fought to make sure that countries that break the rules are held accountable.”

As USTR, Froman would lead Obama’s trade negotiations and act as the enforcer of trade agreements. Among his top priorities will be taking over the negotiation of the Trans-Pacific Partnership between the U.S. and 11 other nations.

The TPP has wide-ranging implications for the apparel and textile industry, which is divided over rules governing apparel production and duty-free benefits. The U.S. has proposed a yarn-forward rule of origin, supported by the domestic textile industry but opposed by apparel importers, that requires apparel be made of fabric and yarns supplied by the U.S. and other TPP countries to qualify for duty-free benefits.

“I think textiles [and apparel] remains one of the most difficult chapters in the TPP negotiations,” said Cass Johnson, president of the National Council of Textile Organizations. “I think [Froman] will have to send a message to Vietnam that they need to cooperate or the TPP is not going to work for them.…I’ve heard him described as a closer, and I think he is going to need to really impress upon the Vietnamese that they need to begin seriously negotiating on textiles and that it will be a yarn-forward agreement that will be good for them.”

Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, said of Froman and Pritzker, “Finally, we will now have a complement on the trade side that can help move forward TPP and the possibility of a U.S.-EU FTA, which will take many years to complete, but at least we have the leadership in place to make progress.”

Julia Hughes, president of the U.S. Association of Importers of Textiles & Apparel, said that while TPP will be a priority for Froman, the U.S.-EU free-trade agreement will be a “close second.”

“The talks with the EU will drag on for a long time, as we know from the tough negotiating stance the EU and U.S. have taken in past discussions,” Hughes said. “The EU trade talks are very important. Duties are important, but also finding ways to deal with the inconsistent regulatory barriers is critical.”

One of Pritzker’s top priorities at the helm of Commerce will be continuing and promoting the implementation of Obama’s National Export Initiative, which seeks to double U.S. exports by the end of 2014. The NEI has helped spur interest in a Made in America movement in the apparel and textile sector.

Commerce oversees activities ranging from the collection of economic data and the census to imports and exports. The department also chairs the interagency Committee for the Implementation of Textile Agreements that is responsible for factors impacting textile trade policy, such as short supply petitions that allow companies to use third-country fabric and yarns under certain trade agreements when the product is deemed to be not commercially produced in the U.S. The agency shares oversight with the U.S. International Trade Commission over decisions on antidumping and countervailing duty cases.