BUSH TOUR EXPLORES TRADE PACTS

Byline: Kristi Ellis

WASHINGTON — President Bush, who is heading to Mexico, Peru and El Salvador this week, has placed trade high on his agenda during the trip.
Bush is expected to hold discussions on the pending renewal and expansion of the Andean Trade Preference Act in Lima, Peru, on Saturday, with the leaders of Peru, Bolivia, Columbia and Ecuador.
From there, he will travel to El Salvador, where he will meet with his counterparts from that country, as well as Costa Rica, Guatemala, Honduras, Nicaragua and Panama to discuss the pursuit of a U.S.-Central America Free Trade Agreement.
Bush’s first stop is Monterrey, Mexico on Thursday, where he will participate in a United Nations International Conference on Financing for Development.
U.S. apparel importer and retail trade associations sent a letter to Bush last week ahead of his trip urging him to announce definitive plans to launch negotiations on a U.S.-Central American pact.
“Not only does [a trade pact] build upon the existing trade partnership, which our member companies strongly support, but it also represents a positive building block for the Free Trade Area of the Americas [a pact encompassing 34 Western Hemispheric countries slated for completion by 2005], advancing our greater ambition of establishing a free trade agreement for the entire hemisphere,” the letter stated.
The four groups who sent the letter, the American Apparel & Footwear Association, U.S. Association of Importers of Textiles & Apparel, the International Mass Retail Association and the National Retail Federation, also called for the administration to consider including other countries in the pact. They singled out the Dominican Republic as a possible candidate.
“There is an opportunity for a deliverable [message] in El Salvador,” said Julia Hughes, vice president of international trade at the USA-ITA. “With this meeting, it would be extremely helpful to have all of the presidents make a very specific commitment to move forward aggressively in those negotiations.”
On the other end of the debate is the American Textile Manufacturers Institute. Carlos Moore, executive vice president of the ATMI, reiterated his opposition to further expanding apparel and textile trade breaks to Central American countries and the Andean nations, claiming they could further “damage” the ailing domestic textile industry.
“We have concerns about any free-trade agreement that is announced because of the key provisions that decide who benefits, whether it’s rule of origin or good enforcement,” Moore said.
He noted that the administration should take care of unresolved business, such as the dyeing and finishing issue in Caribbean Basin trade, before it begins negotiations on new trade pacts.
Bush will also take up trade matters with the four Andean nations in Peru, although the renewal and expansion of the trade pact is in the hands of Congress.
The ATPA, which allows products from various Andean nations to be imported duty-free to the U.S., expired last December, although it was renewed for 90 days in mid-February.
One bill that would extend trade breaks to apparel with the use of regional fabrics has cleared the House and another version, allowing less regional content and requiring more U.S. yarn, is pending a vote in the Senate. Disagreements over whether the four Andean countries should be able to use regional fabric for apparel entering the U.S. duty-free continue to be a stumbling block to a final bill emerging from Congress.
Allan Wagner, Peru’s ambassador to the U.S., said in a news conference Friday that one of his government’s main objectives is to see Congress renew and expand an ATPA that would allow textile and apparel made with regional fabric and yarn to enter the U.S. duty-free.
“It is so important by including textiles and regional materials [in the ATPA] that we could have in a two-to-three-year span the creation of an additional estimated 200,000 to 300,000 jobs in the cotton fields and mills,” Wagner said.
He noted China will become a dominant player when quotas are phased out in 2005.
“If we don’t integrate our economies and become competitive, it will be very difficult,” he said.
He dismissed the opposition camp’s call for U.S.-only textile content in apparel production as “short sighted,” and further noted the U.S. already exports about $60 million worth of Pima cotton to Peru.
“We are already supporting a relationship with the U.S. in the textile sector,” said Wagner. “Sometimes you have to blend high grade oil with low-grade oil and the aim is to integrate our production.”

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