WASHINGTON — U.S. trade officials will head to Singapore today to continue what some say are contentious discussions on apparel and textile provisions in the ongoing U.S.-Singapore Free Trade Agreement negotiations.
This story first appeared in the July 1, 2002 issue of WWD. Subscribe Today.
David Spooner, special textile negotiator at the Office of the U.S. Trade Representative, is expected to meet with his counterpart in Singapore today and Tuesday in an effort to hammer out an agreement on rules of origin, duty phaseout and customs issues.
The U.S. has proposed a strict rule-of-origin provision for textiles and apparel, as well as a 10-year phaseout of duties on all apparel and textile products, according to sources.
Another critical issue in the talks is whether the U.S. will agree to extend trade benefits to two Indonesian islands that produce the majority of apparel for Singapore. In the initial proposal, the U.S. said apparel from the islands would be ineligible for trade breaks, but allowed certain other products to qualify.
Importers and retailers, who strongly oppose strict origin rules, will be anxiously awaiting the outcome of the negotiations. They claim the proposed “yarn-forward” rule of origin — similar to the provision embodied in NAFTA — is a big disincentive to sourcing in the region. Time and distance would render the trade pact useless if apparel must be made of yarn and fabric sourced within the free-trade area to receive free-trade benefits, according to importers and retailers.
On the opposite side of the debate, the domestic textile industry, which hailed the U.S. proposals, claims there is global overcapacity in textiles and apparel and argues against new trade pacts that could further burden their industry.
Although Singapore accounted for only 0.2 percent of all apparel and textiles imported into the U.S. in the first four months of the year, it remains an important supplier of certain higher-priced items, such as cotton knit shirts. For the year ending April, textile and apparel imports dropped nearly 23 percent to 67.44 million square meters equivalent. In terms of value, imports from Singapore dropped about 21 percent to $280 million, according to the U.S. Commerce Department.