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WASHINGTON — Strict rules of origin for apparel and textiles are still “on the table” as part of the ongoing U.S.-Singapore Free Trade negotiations, despite strong opposition from importers and retailers.

This story first appeared in the July 11, 2002 issue of WWD.  Subscribe Today.

David Spooner, special textile negotiator at the Office of the U.S. Trade Representative, held discussions with his counterparts on apparel and textile provisions in Singapore last week. “We had a constructive dialogue,” said a U.S. trade official, who spoke on condition of anonymity.

The U.S. has proposed a “yarn-forward” rule of origin — similar to the provision embodied in NAFTA — as well as a 10-year phaseout of duties on apparel and textile imports to the U.S.

Importers and retailers who strongly oppose the strict rules of origin claim they would be 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 preferential benefits, they contended.

Trade officials did not discuss extending trade benefits to two Indonesian islands that produce most of the apparel for Singapore.

“We have allowed [electronics] products that are assembled there to receive benefits, but we have never discussed or proposed textiles and apparel,” the official said.

The trade official said another major part of the talks focused on transshipments. Textile executives claim millions of dollars worth of apparel and textiles are transshipped through Singapore.

“We really had a positive, healthy dialogue on circumvention issues,” the official said.