NEXT UP: HEMISPHERIC FREE TRADE
Byline: Jim Ostroff
WILLIAMSBURG, Va. — As a top White House envoy lauded American makers for their role in engineering the enactment of a historic law giving Caribbean Basin nations trade incentives to produce apparel in the region, he also urged them to crank up their lobbying efforts again to ensure the creation of a hemispheric free-trade zone by 2005.
“While today is a time for celebrating an important trade success, our work is not done,” Kenneth H. “Buddy” MacKay Jr., White House Special Envoy to the Americas, told members of the American Apparel Manufacturers Association at its three-day annual meeting here.
Makers had sought for seven years since the passage of NAFTA to gain free-trade parity with Mexico for Caribbean Basin nations, where many U.S. firms have set up apparel-assembly operations, but the White House envoy said this was just one piece of a comprehensive plan to build hemispheric trade.
“Beyond the CBI, a larger market is within our reach: the rest of the Americas, which [could present] great opportunities for U.S. manufacturers,” said MacKay, a onetime Florida congressman who was that state’s lieutenant governor from 1990 to 1998.
MacKay said that creation of Free Trade Areas of the Americas, stretching from Alaska to Tierra del Fuego, would establish a trade bloc of 800 million people with a $10-trillion gross domestic product, far surpassing that of the European Union or Asian blocs.
“As the EU continues to consolidate and as China rises in the east, we have to make sure that we do not overlook the market that our closest neighbors provide,” MacKay said.
In a separate interview with WWD, Clinton’s trade emissary said that the creation of this hemispheric trade zone is “especially vital” come 2005, when apparel and textile quotas end for all World Trade Organization member countries.
With this free-trade zone, MacKay said, American apparel and textile producers and other industries, “will be more competitive than they could be otherwise” with those outside this hemisphere who still will have to pay import duties.
In seeking to enlist American firms to expand free trade, MacKay asserted that time is of the essence. Negotiations to create this free-trade zone soon will reach a critical point “where the tough issues” will have to be settled.
To do this, it’s generally agreed that the U.S. president must have fast-track authority, which permits U.S. negotiators to conclude a trade treaty and submit it to Congress for approval with no amendments permitted. This authority lapsed in 1994.
Meanwhile, the outlook for increased apparel sourcing in the CBI region with parity is especially good, said Donald Planty, executive director of Caribbean/Latin American Action, a Washington lobbying group.
Planty, the U.S. ambassador to Guatemala from 1996 to 1999, noted that El Salvador alone expects to triple its apparel exports here to perhaps $4 billion in as little as three years.
He said the outlook for increasing apparel manufacture in other CBI countries, and the Dominican Republic in particular, also is upbeat in light of the new law.
AAMA members were told that the Canadian market is a good prospect for U.S. producers, said Jeff Otis, president and chief operating officer of Grand National Apparel Inc., Toronto.
Specifically, Otis noted that Sears, the Bay and Zellers account for more than 27 percent of all Canadian retail sales, and 32 percent with Wal-Mart included.
Consequently, he said this retail concentration makes it easier for U.S. vendors to sell marketing programs in Canada.
Mexico is seeking to increase production and U.S. investment, said Alejandro Faes Noriega, president of Mexico’s apparel trade group, the Camera Nacional de la Industria del Vestido.
He noted that his group, in league with the Mexican government, is working to expand programs to train employees for apparel- and textile-industry jobs and is creating even more “textile cities” where fiber, textile and apparel-assembly operations are colocated.