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WASHINGTON — The Obama administration is ramping up initiatives to boost U.S. manufacturing and investment in the second half of the year, and the fashion industry is a key component of the government’s Made in America blueprint.
This story first appeared in the September 4, 2013 issue of WWD. Subscribe Today.
From supporting U.S. textile and apparel manufacturing interests in trade negotiations and resolving industry-specific trade issues with other countries to holding a first-ever foreign investment summit aimed at attracting new business, government agencies are helping promote the fashion industry’s Made in USA cachet.
Part of the administration’s Made in America campaign stems from President Obama’s National Export Initiative, which aims to double exports by the end of 2014. U.S. exports hit $2.2 trillion in 2012, compared with $2.1 trillion in 2011, according to the Commerce Department. To meet his five-year goal, exports would need to grow to $3.14 trillion by 2015 from $1.57 trillion in 2009.
“I think what you have do is take more than a snapshot of a year to understand the significant growth [in textile and apparel exports] we’ve had since 2009,” said Kim Glas, deputy assistant secretary for textiles and apparel at the Commerce Department. “Some of the fastest-growing regions for U.S. exports of textiles and apparel were the Western Hemisphere, where exports were up 38 percent between 2009 and 2012, and the European Union, where they were up by 27 percent.”
The total U.S. textile and apparel trade with the North American Free Trade Agreement countries of Mexico and Canada was $6.5 billion in 1993, and has more than doubled to a value of $16.5 billion in 2012. Total textile and apparel trade with the Central American countries under a free-trade deal with the U.S. grew from $3 billion in 1993 to $11 billion in 2012.
Underscoring the importance of Made in America, Commerce Secretary Penny Pritzker participated in Wal-Mart Stores Inc.’s sourcing summit in Orlando, Fla., on Aug. 22. The retail giant, which pledged in January to source $50 billion worth of goods in the U.S. over the next 10 years, convened the summit and brought together leading executives and state and federal government officials and agencies to outline its commitment, giving some 500 supplier companies an opportunity to pitch proposals for new business.
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“Just two weeks ago, I announced that we broke yet another record in U.S. exports in the first half of this year — more than $1.1 trillion worth,” Pritzker said at the summit. “To put that in perspective, that’s more than we exported for the entire year in 2003, just a decade ago. In addition, instead of losing manufacturing jobs, as we had for many years, American manufacturers have now added over half a million jobs since January 2010.”
Pritzker will also lead the first SelectUSA 2013 Investment Summit Oct. 31 and Nov. 1 in Washington to bring together leading public and private sector officials from around the world to discuss the benefits of investing in the U.S. In 2012, an estimated $161 billion in foreign direct investment was made in the U.S. Bill Simon, Wal-Mart’s U.S. chief executive officer, will be among other leading executives participating in that summit.
Commerce’s Office of Textiles and Apparel has been focusing on industry-specific initiatives to help boost domestic production and exports.
“The focus of our office has been two-pronged this year — the Made in USA database, as well as our [Trans-Pacific Partnership] and now European Union trade negotiations to help facilitate opening those markets,” said Glas.
In the TPP talks, 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 oppose a strict rule, but American textile producers claim they need it to compete.
As the negotiations head into the final stage, U.S. Trade Representative Michael Froman, last month at talks in Brunei, said the U.S. has “made clear that a yarn-forward rule is at the center of our proposal and we are working with the other countries, negotiating with them, around that principle.”
Glas said under a yarn-forward rule in the TPP agreement, U.S. textile producers “will see significant export potential and growth.”
The administration has also intervened on behalf of the U.S. apparel industry over denim exports to the EU. The EU imposed a 38 percent retaliatory tariff on U.S. exports of women’s cotton denim jeans that are hitting jeansmakers in Los Angeles particularly hard. The action has become a sticking point just as the U.S. and EU are launching free-trade negotiations.
“We have already raised this with the EU in the initial round of talks [in July in Washington] as something that we want work on in order help expand our denim exports to the EU,” Glas said. “I think at this point they listened to our concerns, and this will be something that we continue to voice as a significant concern of ours.”