WASHINGTON — Sourcing executives are hoping to expand investment and business in the Asia-Pacific region and the European Union, as negotiations over two megaregional trade deals progress and the World Trade Organization tries to regain footing following a global trade accord on a scaled-down package of market-opening measures.
U.S. and EU trade negotiators are meeting here this week for the third round of talks on the Transatlantic Trade and Investment Partnership accord that would have implications for U.S. imports and exports of apparel, textiles, cosmetics, footwear and accessories. Negotiations on a Trans-Pacific Partnership agreement between the U.S. and 11 other countries, said to be in the final phase, promise to provide significant sourcing opportunities for U.S. apparel importers and textile producers, with both sides arguing for different rules to help boost business.
Trade observers applauded the trade facilitation deal reached in Bali this month by the 159 member countries of the WTO, but argued that the deal, while providing an estimated $1 trillion to the global economy, signals a changing role for the global trade body.
“These regional agreements [such as TPP and T-TIP] are where the action is in terms of trade liberalization,” said Phillip Swagel, professor of international economic policy at the University of Maryland. “It’s hard to see the WTO going from a trade facilitation measure to a really big [tariff-cutting] agreement. It will remain important, but the avenue for further trade liberalization will diminish.”
The TPP is seen as providing the biggest sourcing opportunities for the industry, while the T-TIP is seen as giving companies better export opportunities and more regulatory cohesion.
The U.S. is negotiating TPP with Vietnam, Canada, Mexico, Japan, Australia, Brunei, Chile, Malaysia, New Zealand, Peru and Singapore. Most trade experts argue that the Obama administration cannot successfully close negotiations on TPP until the President is granted trade promotion authority. Under TPA, Congress can only vote up or down on trade pacts negotiated by the executive branch.
Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said, “I don’t think [U.S. Trade Representative Michael] Froman can really come to a compromise on hard issues such as a textile rule of origin until he gets TPA. There will be too many textile and apparel people looking over his shoulder…and as we have seen, it is pretty hard to put forward an offer which will satisfy Vietnam and not create a huge backlash in Washington until TPA is enacted.”
The U.S. has proposed a yarn-forward rule of origin that requires apparel be made of fabric and yarns supplied by the U.S. or other TPP partner countries to qualify for duty-free benefits when shipped back to the U.S. Importers are lobbying for a more flexible rule that would allow them to use yarns and fabrics from any country, but domestic textile makers claim they need a yarn-forward rule to compete.
“If you look at a situation like Vietnam, most of the textile inputs come in from locations other than Vietnam and other than TPP countries,” said Stephen Lamar, executive vice president at the American Apparel & Footwear Association. “The issue people have with yarn forward is that it creates such a narrow window for the supply chain and very few products can pass through that window [to receive duty-free treatment]. As a result, companies shy away from using the trade agreement.” RELATED STORY: TPP Talks Pushed Into Next Year >>
Auggie Tantillo, executive director of the National Council of Textile Organizations, said, “For the most part, it is our market that is a significant aspect of this deal. But Mexico, Central America and the Andean countries also have a lot at stake because if Vietnam increases its market share in the U.S., that’s going to come at the expense of somebody else. Our goal is to keep it from coming at the expense of the Western Hemisphere.”
Sourcing executives said Vietnam, the second-largest apparel supplier to the U.S., is already attracting new investment in advance of TPP being finalized.
Bill Jasper, president and chief executive officer of U.S. yarn manufacturer Unifi Inc., said while the majority of the investment is from major Asian producers, including South Korea, Taiwan, China and Hong Kong, he also noted that there has been new investment in the U.S. in cotton spinning facilities that could benefit from export opportunities to the TPP region.
“I think it’s fair to say we are exploring export and investment opportunities in Vietnam and with other TPP countries,” Jasper said.
As negotiators meet here this week for the third round of talks on the proposed U.S.-EU pact, retailers and brands are interested in seeing the two sides streamline regulations, remove burdensome technical barriers and eliminate redundancies in several areas.
“The deal with the EU is really interesting because while we obviously still have very high duties and want to eliminate duties, a large part of what everyone in business is talking about with Europe is dealing with some regulatory barriers,” said Julia Hughes, president of the U.S. Fashion Industry Association. “In that sense, while we are not saying there will be more product made in the U.S. or in Europe [as a result of a trade deal], it is an opportunity to work on eliminating regulatory barriers to trade, which can be extremely costly.”
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)