SPECIFICS MUTE CHEERING FOR WIDER FREE-TRADE AREA
Byline: Jim Ostroff
MIAMI — The FRETRAA battle has begun.
One day after President Clinton and 33 other Western Hemisphere leaders agreed to start talks to create by 2005 the Free Trade Area of the Americas (which negotiators and observers are starting to informally call FRETRAA), textile, apparel, retail and importer representatives began staking out interests — and expressing second thoughts about the pact.
“This is the type of plan that in the abstract sounds wonderful, but when you think about specifics, you begin to have second thoughts about it,” said apparel manufacturer Michael Rothbaum, president of The Harwood Cos. and former chairman of the American Apparel Manufacturers Association.
Clinton on Sunday led the other hemispheric presidents and prime ministers in signing the concord to create the world’s largest free-trade area — stretching from Alaska to Argentina. They pledged to begin work on the complex plan to integrate 34 disparate economies by 2005, when the agreement would begin. In addition, Clinton, hosting the Summit of the Americas here in Miami, announced the U.S., Mexico and Canada would negotiate with Chile for its admission to the North American Free Trade Agreement.
Textile, apparel, retail and importer officials applauded the trade initiatives, but took issue with some of the details. Those interested in broadening imports say that inclusion of NAFTA’s yarn-forward rule — which requires apparel be assembled in member nations using yarns and fabrics made there — into the enlarged trade zone will only block attempts to achieve real free trade.
“A yarn-forward rule for [FRETRAA] would be a disaster since only one country has a reasonable textile manufacturing ability — the U.S.,” said Robin Lanier, an International Mass Retail Association vice president. “Anyone who says yarn-forward and free trade are compatible should have their tongue cut out.”
Yet, Carlos Moore, the American Textile Manufacturers Institute’s executive vice president, countered that the yarn-forward rule and vigorous Customs enforcement are vital to insure that Far Eastern manufacturers, in particular, don’t cheat and get free trade benefits.
“While you can’t insulate any industry from foreign competition, we can try to create free-trade areas where the benefits accrue to those within the zone,” he said, noting that only tough enforcement, including the use of so-called Customs jump teams, can deter transshipment.