MEXICO CITY — The fledgling United States-Mexico-Canada Agreement sets tough intellectual property rights provisions, shielding American labels from copycat firms in Mexico, which have been illegally replicating their trademarks for years, a top California executive told WWD.
“In Mexico, Forever 21 is Forever 22, while Karen Kane is Karen Kein with the same exact logo and customer target,” said Ilse Metchek, president of the California Fashion Association. “You even have Liz Minelli [evoking Liza Minnelli] and I don’t even think she has been to Mexico.”
Metchek helps guard copyright interests in the L.A. area, the seat of California’s $45 billion apparel and home to 500 textile mills and 180,000 workers.
U.S. “brands have been suing for years but they can’t win,” Metchek alleged, adding that the copycat labels have gone unpunished, even though their ranks have been growing. “Now there are very strong copyright and trademark protections to address this.”
While some U.S. brands source south of the border, they have typically shunned Mexican factory investments for fear of losing their trademark, although the new protections could encourage them to reconsider.
Metchek’s comments came as U.S. apparel manufacturing and retail groups including the American Apparel and Footwear Association and National Retail Federation largely endorsed the USMCA, but declined further comment while they review its fine print.
The accord, the fruit of 18 months of grueling negotiations between the U.S., Canada and Mexico to hammer out a replacement to the embattled North American Free Trade Agreement, presents “some very significant pluses for our textiles and apparel industries,” Metchek added.
She noted the U.S.’ Tariff Preference Level quota enabling garment makers to import scarce raw materials outside the bloc was doubled for Canada and more than doubled for Mexico.
Specifically, U.S. firms can use up to 20 million square meter equivalents of foreign inputs to make apparel that will be exported to Canada, compared to around half that much before, Metchek revealed, citing data from Assistant U.S. Trade Representative for Textiles Bill Jackson.
For Mexico shipments, the provision is increased to 15 million SME from 2 million SME, she added.
U.S. negotiators also won new rules to ban manufacturers from importing sewing thread, pocket lining and narrow elastomers from non-USMCA nations. This means many of those key raw materials will be made locally, bringing back the “Made in America” trade that shifted to China during NAFTA’s reign, according to Metchek.
“This is a win for U.S. manufacturers of those products and we have a number of them in California,” she said. “This whole area of components will now be protected and be made in America.”
The U.S., Canada and Mexico are scheduled to sign the USMCA on Nov. 30. After that, the deal faces a vetting process in the U.S. Congress, which could prove complicated for President Trump if the Democrats gain a majority in either house in the upcoming Congressional elections.
For now, however, Trump’s signature pledge to return power to American workers appears victorious.
“Trump pushes the buttons,” Metchek noted. “No other administration has tackled this problem,” referring to local firms’ long-running complaints over NAFTA.
Still, she was quick to also credit others.
“I don’t know if it was just him or his Secretary of Commerce who understands textiles and apparel,” referring to Wilbur Ross, who previously owned Cone Denim and textile mill Burlington Industries before joining the White House.