TOP NEWS 1. Vietnam Apparel Added to Federal Child Labor List Women’s Wear Daily

July 23, 2013

2. U.S. Manufacturers to Benefit From Miscellaneous Tariff Bill Free Enterprise July 17, 2013

3. Parkdale Mills Gets Active with National Petition Alex City Outlook July 16, 2013

4. Ford Lashes Out at Japan’s Entry into TPP Trade Talks

Financial Times July 16, 2013

NCTO AND MEMBERS IN THE NEWS 5. House Members Demand Strong Apparel Rule of Origin for

Vietnam in TPP Inside U.S. Trade July 23, 2013

6. Hanging by a thread? Proposed Trade Pact Could Doom Last of Local Textile Industry

Salisbury Post July 21, 2013

7. “Every day High Prices” Should Not Be Trade Agency’s Slogan

The Foundry July 19, 2013

8. NCTO Urges Congress to Seek Answers to TPP Negotiations

Fibre2Fashion July 18, 2013

U.S. INDUSTRY NEWS

9. A Brief View into a Threadbare US Manufacturing Sector CNBC.com July 21, 2013

BANGLADESH NEWS 10. More Demanded From Bangladesh Reforms

Women’s Wear Daily July 16, 2013

TPP NEWS

11. Next TPP Talks Mulled For Brunei Brunei Times July 22, 2013

12. TPP Negotiators Strive To Finish Technical Work on All Chapters at Next Round

Daily News July 20, 2013

Vietnam Apparel Added to Federal Child Labor List

U.S. Manufacturers to Benefit From Miscellaneous Tariff Bill

Parkdale Mills Gets Active with National Petition

Ford lashes out at Japan’s entry into TPP trade talks

TEXTILES IN THE NEWS YOUR WEEKLY TEXTILE NEWS SERVICE EXCLUSIVELY FOR NCTO MEMBER COMPANIES JULY 23, 2013

TOP NEWS

13. Mr. Froman on TPP Washington Trade Daily July 18, 2013

14. TPP Talks Kick Off in Malaysia; Japan Waits Japan Times July 15, 2013

TPP – VIETNAM NEWS 15. Negotiators Engage On Apparel Short Supply, Vietnam

Makes Tough Demands Daily News July 23, 2013

16. Vietnam Joins New TPP Negotiations in Malaysia

Baomi.com July 17, 2013

17. TPP Agreement Facilitates Vietnamese Goods Communist Party of Vietnam Online Newspaper July 7, 2013

TPP – MALAYSIA NEWS 18. Malaysia Yet To Decide On TPPA National News Agency of Malaysia

July 16, 2013 19. TPP Malaysia Round, Fallout from U.S.-EU Talks and

S&ED, USTR Testifies Inside U.S. Trade July 15, 2013

20. Malaysia Stands to Gain from TPPA The Borneo Post July 15, 2013

TPP – CHINA NEWS 21. China Interested but Still Long Way from Moving to Join

TPP, Trade Experts Say National News Agency of Malaysia July 14, 2013

TPP – JAPAN NEWS

22. Japan May be Latecomer but TPP Trade Party Has Just Begun

Japan Times July 22, 2013

23. Japan election Results Could Boost US-Pacific Free Trade Pact

The Hill July 21, 2013

24. Japan Joins TPP the Afternoon of July 23 Washington Trade Daily July 12, 2013

25. Objections to Japan Entry into TPP Continue to Ring Loud

Business Times July 7, 2013

CAFTA-DR NEWS

26. CAFTA-DR Textile Sector May Lose Jobs if TPP Implemented

Fibre2Fashion July 22, 2013

27. Expanding Latin America – Southeast Asia Economic Cooperation

Center for Strategic and International Studies – CSIS Asia House July 16, 2013

28. Mexico Aims to Boost Apparel Sector Women’s Wear Daily July 15, 2013

29. Mexican Textile Industry Worried TPP Short Supply Could Undermine ROO

Inside U.S. Trade July 3, 2013

TTIP NEWS 30. First TTIP Round Washington Trade Daily

July 11, 2013

ADDITIONAL NEWS 31. Exports Revive at Tirupur Business Standard

July 22, 2013

32. Enforcement, Trade Preference and Other Activities Examined in Annual ITC Report

Sandler & Travis Trade Advisory Services, Inc. July 15, 2013

33. Peruvian Textile Exports Can Spur Trade with US: Envoy Fibre2Fashion July 12, 2013

34. Asian Garment Industry to Undergo Further Segmentation China Daily July 7, 2013

1. Vietnam Apparel Added to Federal Child Labor List Women’s Wear Daily, July 23, 2013

Federal contractors must now certify their purchases.

Arthur Friedman

The U.S. Department of Labor’s Bureau of International Labor Affairs on Monday announced a revised “List of Products Produced by Forced or Indentured Child Labor,” adding six new products from five countries. The Departments of Labor, State and Homeland Security published a Federal Register notice updating the list that adds garments from Vietnam, along with cattle from South Sudan, dried fish from Bangladesh, fish from Ghana, and gold and wolframite from the Democratic Republic of Congo. Under the procurement regulations, federal contractors who supply products on the list must certify that they have made a good-faith effort to determine whether forced or indentured child labor was used to produce the items listed. Public comments were solicited, received and considered in the agencies’ final determination. The U.S. is in the process of negotiating the Trans-Pacific Partnership free-trade agreement with Vietnam and nine other countries. The current group of products on the DOL list includes garments from Argentina, India and Thailand; cotton from Benin, Burkina Faso, China, Tajikistan and Uzbekistan; diamonds from Sierra Leone, and embroidered textiles from India and Nepal.

2. U.S. Manufacturers to Benefit From Miscellaneous Tariff Bill Free Enterprise, July 17, 2013

Why does the United States slap tariffs on imported goods that U.S. manufacturers and consumers need but that are unavailable domestically?

The short answer is, we shouldn’t. That’s why the U.S. Chamber strongly supports the Miscellaneous Tariff Bill (MTB), the latest version of which was introduced today in the House of Representatives by Ways and Means Committee Chairman Dave Camp (R-MI), Ranking Member Sander Levin (D-MI), Trade Subcommittee Chairman Devin Nunes (R-CA), and Ranking Member Charles Rangel (D-NY).

For more than a quarter century, MTBs have provided temporary relief from select tariffs that serve only to raise costs for U.S. manufacturers. These are taxes applied to imported materials and intermediate products that are essential to U.S. manufacturers but unavailable from domestic sources.

The U.S. Chamber has long supported the MTB because it helps U.S. companies maintain their competitive edge. The last MTB supported an estimated 90,000 American jobs.

The process for approving products for duty suspension under the MTB is fully transparent. All tariff suspension requests go through a vetting process to determine whether any affected products are produced domestically or whether there is any domestic opposition.

Requests are subject to review by the Department of Commerce, the Office of the U.S. Trade Representative, U.S. Customs and Border Protection, and the U.S. International Trade Commission. Opportunities for public comment are provided by both the executive branch and Congress.

In the view of some conservatives, these duty suspensions are an earmark because they provide a “limited tariff benefit,” which is defined under House rules as benefiting ten or fewer entities.

However, the MTB’s benefits are in no way limited: They are available to all importers of the product. Look at it the other way around: Why on earth would anyone slap a tax on just ten companies -- or just one?

The good news is that support for the MTB is broad and growing. Given its importance to American jobs, U.S. competitiveness, and simple fair play, the MTB should receive the same strong support in Congress it has in the past.

3. Parkdale Mills Gets Active with National Petition Alex City Outlook, July 16, 2013

Keeping textiles statewide is getting attention on both national and local level.

Congressional leaders recently released a letter backed by the National Council of Textile Organizations to the United States Trade Representative, signed by 167 members of the U.S. House of Representatives, including local Rep. Mike Rogers. The letter calls for strong textile rules, particularly urging the USTR to maintain its position on the “yarn forward rule-of-origin” which “has a proven track record of job creation in the U.S and our free trade areas, and … is responsible for hundreds of thousands of U.S. manufacturing workers.”

Citizens at Parkdale Mills set up a tent and tables Friday to try to get signatures for a petition backing the letter – joining an initiative that is supported by Parkdale Mills company-wide.

When Sandra Fuller with the Economic Development

Alliance drove by the petitioners early Friday, she wasn’t sure what was going on – she said she initially thought the plant was closing.

“What they’re saying is we want to be sure we don’t go offshore,” Fuller said. “We want to see them continue to have jobs here and continue to create jobs here.”

Fuller said she and the EDA are glad to see Parkdale Mills taking initiative to support the letter from the House.

“We know too well what its like when a textile company downsizes to go offshore and what it does to a community,” Fuller said. “We certainly want to support Parkdale Mills.”

The letter from the U.S. House, addressed to Ambassador Michael Froman, addresses the issues that would arise if the Trans-Pacific Partnership (TPP) agrees to terms set by the Vietnamese government regarding textile negotiations.

“I strongly support the yarn-forward rule in this agreement and call on foreign governments to negotiate in good faith so that East Alabama’s workers can compete on a level playing field,” said Rep. Mike Rogers in a statement.

The yarn forward rule, according to the letter, “ensures that only textile and apparel manufacturers within a particular free trade region, such as the proposed TPP, get benefits from the agreement.”

The letter goes on to say that if Vietnam gets its way, “over $10 billion of current U.S. textile exports would be lost, and more than a million workers in fragile economies would see their livelihoods destroyed.”

“We strongly believe … that a final agreement must preserve and create investment in U.S. manufacturing and jobs, particularly in small and medium-sized businesses,” the letter proclaims.

4. Ford Lashes Out at Japan’s Entry into TPP Trade Talks Financial Times, July 16, 2013

Ford’s top executive in Washington has delivered a stinging attack against Japanese economic policies ahead of the country’s entry into Trans-Pacific Partnership trade talks next week, reflecting deep frustration about the negotiations within the US car industry.

The remarks by Steve Biegun, the Washington-based vice-president for international governmental affairs at Ford, offer evidence of the complicated politics at work in the US over the TPP talks, which seek to liberalise trade among 12 Pacific-Rim nations.

The big three Detroit-based automakers and other US manufacturers who feel they are being damaged by what they see as Japan’s deliberate weakening of the yen could emerge as a hotbed of political opposition to the TPP and push their view in Congress.

Their hackles have been raised by Japanese prime minister Shinzo Abe’s so-called “Abenomics” fiscal and monetary stimulus programme which has prompted a sharp weakening in the yen.

“Japan does not embrace the model of free trade. It’s a mercantilist system where export driven growth is the priority and Abenomics, to the extent that we’ve seen it play out so far, it seems largely to be repackaged ‘Japan Inc’ rhetoric: facilitating subsidised exports and casting that as competitiveness,” Mr Biegun told the Financial Times.

Japan is set to join the TPP talks late during its 18th round, which is under way in Malaysia. The Obama administration agreed to allow Japan’s entry earlier this year after a lengthy negotiation in which Japan made some concessions to US automakers, such as lifting the quota on vehicles imported through a special programme. But the US auto industry says this is not even close to sufficient.

“Japan is the most closed auto market in the world,” Mr Biegun said. “[It has had] a rolling set of barriers over the decades ranging from outright exclusion of importers, to harassment of import brands, and unique regulatory requirements that are often applied to a low volume import, creating excessive cost.”

But it is Japan’s alleged manipulation of the yen more than market access issues that has rankled feelings in Detroit and elsewhere in the US rust belt, since it puts US goods at a disadvantage compared to Japanese goods in third countries.

Matt Blunt, president of the American Automotive Policy Council, which represents all three big US carmakers, warned recently that “it will be impossible for his group to support the TPP” unless “strong and enforceable provisions to prevent Japan from intervening in currency markets to depress the value of the yen” are in the agreement.

A bipartisan group of 230 members of the House of Representatives, representing more than a majority, last month wrote a letter to President Barack Obama saying it was “imperative” for currency provisions to be part of the TPP, though they stopped short of mentioning Japan by name.

Washington and Tokyo have put in place bilateral negotiations designed to address the car industry tensions to run in parallel with the TPP talks, in the hope of striking a palatable deal for both sides and smooth over many of the remaining differences.

“We are well positioned to level the playing field for US automakers and workers through the TPP and parallel bilateral negotiations,” an official from the US Trade Representative’s office said on Tuesday, noting that they have been “front and centre” of discussions relating to Japan’s entry into the talks.

But Mr Biegun, a former White House National Security Council official under George W Bush, said that was not enough. “It’s incumbent upon Japanese to demonstrate what are they going to do to fix the situation,” he said. One of his concerns with the TPP negotiations – often billed as a strategic priority for the US in containing China – is that “geopolitics has gotten ahead of the trade considerations here”.

Mr Biegun said Ford supported the TPP process from the beginning and through its expansion from four to nine to 11 members, including last year’s addition of Canada and Mexico into the talks. But he said progress on sensitive issues had been slow and the talks would only become “more difficult and more complicated” with Japan’s entry.

Mr Biegun also pointed out that Ford had backed every free trade agreement the US ever negotiated, including a deal with South Korea that entered into force last year after some auto sector provisions were renegotiated by the Obama administration.

“We’re not coming at this lightly and we’re not coming at it ideologically,” Mr Biegun said. “In the US we’re the largest exporter of automobiles. So we are hugely invested in trade. We bring vehicles into the US. We ship vehicles out of the US.”

If the Obama administration failed to secure a deal with Japan on TPP that was satisfactory to the US automakers, it would mark a big split with a sector that has been supportive of the White House since its rescue of domestic car manufacturers during the financial crisis.

Japanese carmakers have a very different perspective on the TPP talks, chastising what they see as “misunderstanding” about perceived barriers to the Japanese market.

“Japan has zero auto tariffs and no restrictive customs or regulations only apply to imported vehicles,” Ron Bookbinder, an executive with the Japan Automobile Manufacturers Association, recently told a USTR hearing on TPP.

Japanese carmakers have argued that US vehicles do not sell well in Japan because they are simply not small enough, to which US manufacturers retort that they have very good business in Europe, where many consumers also prefer smaller cars.

5. House Members Demand Strong Apparel Rule of Origin for Vietnam in TPP Inside U.S. Trade, July 23, 2013

A group of 167 House members this week pressed U.S. Trade Representative Michael Froman to ensure textile and apparel provisions in the Trans-Pacific Partnership (TPP) would protect U.S. textile manufacturers, including a strong rule of origin and extended duty phase-down for sensitive items.

In a July 10 letter, members said they were troubled by the position of the Vietnamese government regarding textile negotiations and its impact on U.S. textile industry suppliers.

This is most likely a reference to Hanoi's ultimate goal of replacing the U.S.-proposed yarn-forward rule of origin with a cut-and-sew rule in TPP. This would allow Vietnamese producers to make eligible apparel for the U.S. market with third-country fabric, including from China, instead of using regional inputs. Vietnam has little indigenous fabric or yarn production, and depends on imported inputs for apparel production.

"Vietnam is seeking to replace long-standing textile rules that have been included in previous free trade agreements with a new rule that would allow Vietnam to source textiles from China and export garments and finished goods to the United States duty free," the letter states. The U.S. has used the yarn-forward rule in all its free trade agreements, but with varying degrees of exceptions.

If TPP members were to adopt a cut-and-sew rule, it could more than quadruple Vietnam's market share in the U.S., from 7 percent to nearly 30 percent, according to the letter. Most of that growth would be to the detriment of small and medium-sized textile companies in the U.S., members argue in the letter.

The House members assert that such an influx of Vietnamese apparel would cost U.S. textile exporters $10 billion and "more than a million workers in fragile economies would see their livelihoods destroyed."

It would also have a negative impact on trading partners that already receive trade preferences under a yarn-forward rule established in the North American Free Trade Agreement and Central American Free Trade Agreement, the letter argues.

The letter was organized by Ways and Means Committee member and Congressional Textile Caucus Co-Chairman Bill Pascrell (D-NJ) and Reps. Howard Coble (R-NC) and Patrick McHenry (R-NC). Other Ways and Means members that signed the letter include Reps. Charles Boustany (R-LA), Charles Rangel (D-NY), Richard Neal (D-MA), Xavier Becerra (D-CA), Lloyd Doggett (D-TX), John Larson (D-CT), Allyson Schwartz (D-PA), Danny Davis (D-IL) and Linda Sanchez (D-CA).

6. Hanging by a thread? Proposed Trade Pact Could Doom Last of Local Textile Industry Salisbury Post, July 21, 2013

JON C. LAKEY / SALISBURY POST Debbie Long attends to a machine in the spinning room at Tuscarora Yarns plant in China Grove. The company takes bulk fibers and stretches them into a fine thread of yarn.

SALISBURY — When Cone Mills closed its Salisbury plant in 1999, Debbie Long was one of the more than 600 jerked from the familiar routines of employment.

Long decided to make the best of it, she said, focusing instead on parenthood. She then searched for a half-decade before landing a full-time gig at Tuscarora Yarns in China Grove.

“When I went back into the workforce it took me about five years to land this job; something that was full time with benefits. It’s hard to find a decent-paying, full-time job with benefits,” Long said. “To be honest, my family has struggled financially because of my lack of full-time employment. This job is a godsend.”

But a proposed new trade pact — the Trans-Pacific Partnership agreement — could halt that blessing.

Critics say provisions in the agreement could significantly damage a textile industry that has only recently began to show signs of recovery.

In a July 10 letter addressed to United States Trade Representative Michael Froman, 167 congressional members argued that the agreement — which would allow Vietnam to source textiles from China and export finished garments to the United States tax-free — could fold as many as 500,000 American textile jobs.

And hundreds of them could come from Rowan County.

Trying to convince lawmakers

As machines roared outside a break room in one of the Tuscarora Yarns mills recently, employees didn’t notice an empty petition lying on one of the lunch tables.

Many of them, including Long, had already signed it.

Tuscarora administrators are fostering employees’ efforts in the petition, which aims to convince lawmakers of the need for a “Yarn-Forward” protection for American textile companies.

At a National Council of Textile Organizations meeting this spring, Tuscarora Yarns President and CFO Ervin Johnson said, industry leaders were warned about the significance of the agreement.

“This would be the death knell of the industry if we don’t stand up and fight,” Ervin Johnson said. “Now the question becomes: How do we stand up and fight?”

The proposed agreement would create a free trade bloc among 12 countries in Southeast Asia and North and South America.

But critics say the agreement would remove all trade barriers, including the elimination of import tariffs.

With a yarn-forward requirement, key production steps like yarn spinning and fabric formation would actually take place in the affected region in order to get trade preferences.

Without the rule, countries outside the region, like China, could supply textile components to countries like Vietnam for simple assembly of products that are subsequently shipped tax-free to the U.S.

‘We want some protections’

Vietnam is second only to China in terms of textile exports to the U.S., according to the most recent Major Shippers Report, released by the U.S. Department of Commerce on June 28.

Low wages and regulation, opponents say, make it impossible for U.S. manufacturers to compete with countries like Vietnam if the current agreement goes through.

Free Trade Agreements with North and Central American countries — known as NAFTA and CAFTA-DR — also could keep those international workforces from competing with duty-free exporters like Vietnam, opponents say, costing more than 1.4 million jobs.

Long has been working to educate her fellow workers and even took some petitions to local businesses in hopes of increasing the voice of American textile companies.

“I’ve already went through one plant closing because of NAFTA and CAFTA. I’d hate to see that here,” she said. “It’ll send a message to Congress that we want some protections in place.”

Supply, demand

More than 1,200 workers scurried about the grounds of China Grove Textiles when David Shaver first came to the plant in the mid-1980s.

Shaver, now the plant’s manager, said the facility’s employment has held steady at about 180 since Tuscarora purchased the mill in 2011.

Part of that loss is credited to advanced machinery that needs little hands-on work and minimal supervision.

But the migration of textiles to Central America and Asia also hollowed out the demand for American-made garments.

Employees said they’re working to boost awareness through shared petitions and word of mouth.

“What we’ve done at the plant level is we’ve been taking the petitions — the employees are in charge of gathering names,” Shaver said. “We’ve got our whole workforce excited about trying to save jobs here.”

One of those employees is Johnsie Wilhoit, a 64-year-old spinner with more than 40 years at the plant.

Wilhoit joined China Grove Textiles in the booming mill days of the late ’60s.

She held onto her job when HanesBrands later bought the plant, but in 2008 Hanes dropped several branches, including the China Grove company, as North Carolina’s then-second-largest employer began moving manufacturing jobs to Asia.

“Whenever they shut down I stayed here ‘til they kicked me out,” Wilhoit said, wiping wisps of fiber from her face and worn, gray China Grove Textiles T-shirt.

“That was the first time I had ever been laid off or lost a job. It’s not fun.”

Wilhoit said she made ends meet after getting a job as a dietary aide at Big Elm Retirement on West A Street in Kannapolis.

A company called Sustainable Textiles bought the old mill shortly after HanesBrands left, but the operation was shortlived.

Once Tuscarora purchased the property in January 2011, Shaver called his longtime coworker with a job proposition.

She was the first person he re-hired for the plant.

“Let’s face it, there’s not too many industries that are willing to take a chance on a 62-year-old broad like me,” Wilhoit said.

But now she’s afraid the impending agreement could force her to walk away from the plant for a second time.

“I’m for anything that’s going to keep jobs here in this country. I also understand that, if I can be perfectly frank, that what the little man wants oftentimes doesn’t happen,” she said. “I hope our representatives both in this state and in the rest of the country realize that we need to keep as many jobs as we can in this country.”

‘Deeply concerned’

Since 1899, Tuscarora Yarns has adapted to meet market demands, administrators said during an interview last week.

But the Trans-Pacific Partnership agreement, they indicated, is a different animal.

Johnson, the Tuscarora president and CFO, said because of the broad industry spectrum more jobs outside the textile industry would be affected than inside.

“It would be like a 10-year final death,” Johnson said. “It would change a lot of business models, no doubt.”

When asked about the impact on Tuscarora’s model, Johnson said the agreement could be “devastating.”

“If it does what this study says, certainly it would prohibit growth. Number one, we want to grow; that would be the first thing,” Johnson said.

“Secondly, it would probably test our business model here like we want it. We’re a 24/7 operation. If we’re not a 24/7 operation, I don’t know that it even makes sense to exist. I don’t know that we can exist on a constant five-day type business model. It can be definitely devastating to us.”

Tuscarora’s brass has been gleaning support from local boards since they launched an effort to petition Washington in mid-June.

China Grove Town Council, Salisbury City Council and the Rowan County Board of Commissioners have approved resolutions supporting “yarn-forward” protections in the agreement.

The resolutions and proposals are being forwarded to D.C. legislators, Johnson said.

Of the 167 House members who signed the letter opposing the agreement, several were local representatives.

U.S. Rep. Richard Hudson (R-08) told the Post in a phone interview Friday he would continue opposing the proposal as long as American jobs were at stake.

“Our part of North Carolina has lost more textile jobs than any other part of the country in the last 20 years. I’m deeply concerned about this,” Hudson said of the agreement.

The trade proposal, he said, will not lead to free trade if China and Vietnam can skirt the system.

But supporters of the agreement, he said, argue for the benefits that an accord with other regional countries, like Australia or Chile, could bring.

“These are all huge markets. We need to open up these markets to potential exporters,” Hudson said. “They make a compelling argument. But for me, if we’re going to let Vietnam insist on rule changes and take American jobs, then it’s not something I support.”

Rep. Mel Watt said the NAFTA and CAFTA agreements have had “devastating impacts” on the state’s textile industry and he also would not vote for the current agreement.

“When the agreement facilitates trans-shipment of goods to a third country through the country that you’re trying to help and in the process undercuts U.S. jobs — you at least understand that we’re trying to help Vietnam — we’re not trying to help China in the process,” Watt said. “That’s been our concern with a number of these agreements.”

Watt said he’s supportive of the global economy, but not at the expense of local jobs.

“It’s hard to be supportive of the economy of Vietnam at the expense of someone who lives down the block from you,” Watt said.

‘A fighting chance’

Still, local textile officials said the industry has plenty of fight left.

“There’s a demand for the goods that we make at this point in time,” Tuscarora Yarns Vice President of Manufacturing Doug Merritt said. “But if we continue down the road that some would like to see us go, the product demand is not going to be in this part of the world.

“We’ll be a service nation and not a manufacturing nation. We have a good story. We make a good product and we’d like to see ... users demand our product. We’re fighting hard for it.”

Hudson said he doesn’t think Froman, the trade ambassador, will brush off last week’s letter.

“I think it’s pretty hard to ignore 170 members of Congress,” he said.

Johnson, Tuscarora’s president, said provisions to protect the American textile industry would allow companies like the China Grove plant to expand.

Shaver said his plant could expand another hundred workers if “yarn-forward” policies are enacted.

Moreover, workers like Long and Wilhoit said they believe local textile plants can continue their recovery with a hand from D.C.

“I believe it’s coming back in this industry. As long as we can get a fair shot, I think we can come back even stronger,” Long said. “We do need some help in Washington to give us a fighting chance to keep our jobs.”

7. “Every day High Prices” Should Not Be Trade Agency’s Slogan The Foundry, July 19, 2013

Trans-Pacific Partnership (TPP) trade negotiations are taking place this week in Malaysia. Here’s a modest suggestion to help new U.S. Trade Representative Michael Froman bring the TPP to a successful conclusion: eliminate the position of Assistant U.S. Trade Representative for Textiles, a job that places the welfare of one special interest group above that of the United States.

The federal government currently employs 18 assistant U.S. trade representatives. Most of these jobs have broad descriptions, such as the Assistant U.S. Trade Representative for Africa or the Assistant U.S. Trade Representative for Small Business, Market Access, and Industrial Competitiveness.

One exception is the Assistant U.S. Trade Representative for Textiles, an industry that accounts for less than one-fifth of one percent of U.S. gross domestic product.

U.S. textile negotiators often take positions diametrically opposed to the interests of U.S. consumers, retailers, exporters, and others. For example, the current U.S. textile negotiator, a former National Council of Textile Organizations (NCTO) board member, reportedly continues to represent the NCTO’s interests at the TPP negotiating table. That’s bad news for American consumers, who pay billions of dollars extra every year for clothing as a result of U.S. tariffs that protect textile producers. It’s also bad news for U.S. exporters and service providers, since other nations retaliate by denying access to their own markets. Trade reporter Greg Rushford explains:

To the extent that the Americans refuse to open their markets to Vietnamese and Malaysian exporters of apparel and footwear, you can forget meaningful reforms of Vietnamese and Malaysian state-owned enterprises. By adopting the backwards-looking NCTO positions as their own, the White House is risking wiping out billions and billions of dollars of export opportunities to the big-ticket, globally competitive U.S. providers of goods and services.

While the relatively small textile industry gets its own trade negotiator, there’s no Assistant U.S. Trade Representative for 314 Million American Consumers.

The U.S. Trade Representative’s negotiating position at TPP trade talks should not be “Everyday High Prices” for Americans. Froman should eliminate the position of Assistant U.S. Trade Representative for Textiles.

8. NCTO Urges Congress to Seek Answers to TPP Negotiations Fibre2Fashion, July 18, 2013

“With the 18th Round of Trans-Pacific Partnership trade negotiations now underway in Malaysia, the timing of the hearing, and opportunity for Ways & Means Committee Members to seek clear, unambiguous answers from the USTR on President Obama’s trade policy agenda, could not be more appropriate,” Cass Johnson President of the National Council of Textile Organizations (NCTO) stated.

“Given the vital role of this agreement in sustaining American jobs and bolstering our national economy, NCTO believes that trade negotiators must remain committed to supporting standard provisions that have made previous U.S. free trade agreements successful for all parties; including the ‘yarn forward’ rule of origin, reasonable tariff reduction formulas that provide stability for domestic manufacturers, and a short supply list supported by U.S. textile industry experts.

"As more than 167 members of Congress have already made clear, anything less than full support of these principles by the Obama Administration and Ambassador Froman will undermine fair trade principles in the Trans-Pacific Partnership and further serve to threaten hundreds of thousands of U.S. textile jobs, and over a million more in the Western Hemisphere,” Johnson said.

Just last week, congressional leaders released a letter backed by NCTO to the United States Trade Representative (USTR) signed by 167 members of the U.S. House of Representatives – it includes 10 members of the House Ways & Means Committee. The letter calls for strong textile rules, including the “Yarn Forward” rule of origin and long tariff phase-outs for sensitive products to be included in the Trans-Pacific Partnership (TPP) agreement currently being negotiated by the United States and 11 other nations.

“The USTR’s continued support of the ‘yarn forward’ rule and other strong textile provisions, including long tariff phase-outs, in this and future rounds of TPP negotiations will ensure that third parties, such as China, do not take advantage of the final agreement, and send a clear message that the United States is committed to a strong textile manufacturing sector at home, across the western hemisphere and in Africa,” Johnson concluded.

The House Ways & Means Committee is slated to convene a hearing to discuss President Obama’s trade policy agenda with USTR Froman on Thursday, July 18th at 9:00 a.m. ET. The hearing will take place in Room 1100 in the Longworth House Office Building.

The National Council of Textile Organizations (NCTO), headquartered in Washington, DC with an office in Gastonia, NC, is the national trade association representing the entire spectrum of the textile sector. 9. A Brief View into a Threadbare US Manufacturing Sector

CNBC.com, July 21, 2013

Jake Bronstein wanted to see if he could produce high-quality textiles—specifically high-thread-count bedsheets—in the United States.

"I found out it's impossible," he said. "The machinery doesn't exist here, and neither do people with the skills to run it. I found that depressing."

But that disappointment didn't deter Bronstein from pursuing the idea of made-in-America threads.

He now believes that he has discovered a largely untapped vein of demand for premium, American-made underwear for men.

His company, Flint & Tinder, is on track to produce 2.5 million pairs this year, and for every 1,000 additional pairs he sells each month, another American job is created in one of 11 factories in California, Massachusetts, New York and South Carolina, Bronstein said. (Flint & Tinder itself employs nine.)

Still, getting those factories on board wasn't easy, as he initially faced the same kind of resistance from them with the briefs—they were mostly making T-shirts—as he had with his sheets.

"They told me, 'We don't make underwear in this country,' " Bronstein said. And it's true, he added, noting that virtually all the brands on department store shelves are produced abroad and under license by only a couple of companies.

He managed to persuade them by arguing, "It's the same number of holes as a T-shirt. I just need an elastic waistband."

Jake Bronstein, CEO of Flint & Tinder, explains how his dismay with low-quality underwear led him to produce a high-end brand, which is made in America and becoming a multimillion-dollar business.

But manufacturing in America means starting with a baseline cost that is five times that of competitors, whose factories are largely in India, Thailand, Indonesia and China. That's why some 800,000 apparel-making jobs have moved overseas since 1990.

Still, Bronstein said, Flint & Tinder's products are priced competitively.

"The end consumer doesn't pay a dollar more" than a luxury brand such as Ralph Lauren, he told CNBC's "Squawk Box." "As a company, we take a reduced margin, but we can make up for it through online sales."

The price for a pair of Flint & Tinder's boxer shorts is $25; the Ralph Lauren equivalent with its iconic polo player print, goes for $28 on Amazon.com.

Bronstein launched the company in April 2012 with a Kickstarter campaign. He knew he was onto something when he exceeded his goal by 10 times, raising $300,000 by pledging to put American-made skivvies on store shelves.

Another Kickstarter campaign to launch Flint & Tinder's 10-Year Hoodie (free mending for a decade included) has raised more than $1 million—the crowdfunding site's top-funded fashion campaign to date.

The promotion for the zip-up declares, "It's more than a sweatshirt. It's a battle cry: Not everything should be disposable."

Besides that nod toward more sustainable lifestyles, the blog and product line project an aesthetic of masculinity and old-fashioned self-reliance—perhaps to a kitschy fault. The website's "men's shop" features an esoteric selection ranging from "Field Archery Wall Art" to a notebook rebranded a "Captain's Log" to the kind of old-fashioned shaving brush you last saw deployed on "M*A*S*H."

"A real man does it with a straight razor," the blog admonishes.

Coming soon are $80 jeans similar to an item that would sell for double that in, for example, a J. Crew store, Bronstein said.

But Flint & Tinder has company. Another Kickstarter alum, San Francisco-bsed Gustin, has raised $450,000 for its handcrafted jeans at the same price point.

Before Flint & Tinder, "you didn't hear much about made-in-America products on Kickstarter, but now it's a growing trend," Bronstein said. "People are starting to see the value proposition."

His immersion in the apparel business has also led him to some deeper thinking on fast versus slow fashion.

"The incident at the Bangladesh apparel factory that claimed 1,000 lives is less an issue of domestic versus foreign manufacturing than it is about fast fashion and the hidden costs of disposable retail," he wrote in his blog on the company website.

"When companies make disposable products, business relationships become disposable as well—and ultimately, the labor pool they draw from winds up being disposable. That's how fast fashion has to be. It's cheap, but it comes at a cost, even if it's hidden from view."

10. More Demanded From Bangladesh Reforms Women’s Wear Daily, July 16, 2013

While Bangladesh made some positive changes toward bolstering safety in factories in amendments to its labor laws adopted by Parliament Monday, global union leaders, labor diplomats and experts said the reforms do not go far enough in meeting international standards, judging from preliminary assessments. “What I hear from my unions in Bangladesh, the first comments are that there were some small improvements. This is clearly short of what the U.S. government, the European Union and the International Labor Organization, and the unions, have expected,” according to Jyrki Raina, general secretary of IndustriALL Global Union, the umbrella grouping that also represents Bangladesh Garment workers unions. “This is clearly not enough,” Raina told WWD, and added that there are still details missing for the amendments to be ILO compliant. The global union chief in May brokered a fire and safety accord with more than 70 fashion brands and retailers to improve conditions in Bangladesh’s factories. He noted the labor reforms on safety that were adopted are at least a positive step. “Thanks to the pressure by the ILO high-level mission [to Bangladesh] in May, they got some positive things, more inspectors and some improved provisions, so they are steps forward,” Raina said.

As of press time, some labor union groups, European Union officials, and senior ILO officers were apprehensive about making an assessment until they have a full translation and expert legal opinion of the amendments, said senior sources closely engaged in talks with Bangladesh on the reforms. The same sources said ILO representatives met with the Bangladesh government in Dhaka Tuesday to get clarity on the legislative changes. “We are aware of the press reports, and our representation in Bangladesh is trying to get an official copy of the law on which basis we need to give it careful study before we comment,” John Clancy, spokesman for EU Trade Commissioner Karel De Gucht, told WWD Tuesday. The Bangladesh daily, Financial Express, reported in its Tuesday edition that according to Mikail Shipar, the Bangladesh Labor and Employment Secretary, 87 amendments were made to the Labor Act of 2006. Speaking to some of the amendments, Shipar told the newspaper that “employees would no longer need approval from factory owners to form trade unions,” and that inspections will be mandatory when a factory is up for a license or renewal, and that all exits should be kept lock-free. Published reports indicate that “no change can be made in the factory layout plan without the permission of factory inspectors.” Human Right Watch, the New York-based advocacy group, said Tuesday the amendments by Bangladesh “still fall far short” of meeting its obligations under core ILO standards. It said the amendments deal with some problematic provisions of the existing laws, while leaving others untouched, and singled out that at least 30 percent of workers in an establishment would still have to join a union for the government to register it (unions had proposed 10 percent in talks with the government sources said); that unions will be allowed to select their leaders only from workers at the establishment; and that discriminatory anti-strike provisions in the law favor foreign investors by prohibiting strikes in any establishment during the first three years of operation, if it is “owned” by foreigners or is established in collaboration with foreigners. Raina said, as things stand, Bangladesh does not meet the criteria for the ILO better factories scheme.

“This is our clear line, so we will oppose the start of that program until ILO core reforms are introduced,” he said. Finally, according to labor union sources close to Washington, speaking on the condition of anonymity, the amendments are not likely to have satisfied the U.S. government to take decisive action on reinstating the General System of Preferences trade benefits the administration suspended June 27. Bangladesh has suffered multiple factory tragedies over the last 12 months, leading to the deaths of more than 1,200 people.

11. Next TPP Talks Mulled For Brunei Brunei Times, July 22, 2013

BRUNEI may host the next round of Trans-Pacific Partnership (TPP) free trade talks next month, when Japan is expected to join in the on-going negotiations as its 12th member, informed sources were quoted as saying on Saturday. Citing unnamed sources involved in the closed-door negotiations, Kyodo News International said the 11 members currently meeting for the 18th round in Kota Kinabalu were considering holding the talks next in Brunei in late August. Japan will then fully join the nearly four-year old talks at the negotiating table here, with the world's fourth largest economy making its debut in KK on Tuesday. It has been considering to join the TPP for the couple of years. Brunei, Chile, New Zealand and Singapore made up the predecessor to the free trade pact, in what was known as the "P4" countries. Since then, the US has largely been leading the TPP, which now also includes Australia, Canada, Malaysia, Mexico, Peru and Vietnam. The TPP members take turns hosting the negotiations every two to three months, the earlier hosting of the talks in Brunei next month was under consideration since discussions on removing tariffs "have run into trouble" and due to Japan's late entry into the current round. It was therefore expected that another round of talks will be held in September after the negotiations in Brunei, the sources added. A deal on the TPP has so far been evasive as participating countries thresh out the not-publically-disclosed details of the free trade pact, but the sources said the members were looking at October 13 for a basic agreement to be reached by then, with a deal hoped to be concluded by the end of the year. Earlier this month, a request to have the TPP to be discussed in the Malaysian parliament was reportedly rejected. A Letter to the Editor to The Brunei Times this month also called for the TPP to be raised at the Legislative Council meeting. Brunei Ministry of Foreign Affairs and Trade officials often say they are not at liberty to discuss the details of the negotiations when asked, coining it a "sensitive" issue. In the past, concerns have been raised internationally related to intellectual property rights and public access to general medicines. Last year, an APEC Business Advisory Council member from New Zealand said Brunei stood to gain from "flexible and robust" growth in the long run as a member of the TPP. "I think what's important for Brunei is if you need to have a future economy that is not just oil and gas, you need to allow other people to come to your market just the same way that you want to go into theirs," said Tony Nowell, the chair of Scion and an ABAC representative from New Zealand. The Brunei Times

12. TPP Negotiators Strive To Finish Technical Work on All Chapters at Next Round

Daily News, July 20, 2013

KOTA KINABALU – Trans-Pacific Partnership (TPP) negotiators here are working toward the goal of completing as much technical work as possible in all chapters by the end of the next round, which is scheduled earlier than previously anticipated for next month in Brunei, according to informed sources here.

“There’s a lot of pressure to close everything that can be closed,” one business source here said. Others said this pressure is more palpable than it has been in any negotiating rounds this year.

This approach is seen as a clear signal that TPP members likely want to make an announcement at the October Asia Pacific Economic Cooperation (APEC) forum that goes beyond a general progress they have offered so far.

In a July 20 briefing for stakeholders here, chief negotiators indicated that conclusion of the TPP talks by the APEC meeting was still their goal, although it is unclear if conclusion would entail having completed the technical work only, sources said.

TPP negotiators have used the term “substantially closed” when describing the status of chapters for which the technical work has been finished to the extent possible, but key issues remain to be resolved. U.S. Trade Representative Michael Froman testified to the House Ways and Means Committee on July 19 that TPP negotiators in Malaysia are working towards the stated goal of finishing TPP this year without defining the term. He insisted that goal was ambitious, but doable.

Among some TPP delegations, lead negotiators in charge of chapters are being asked to produce a matrix of open issues remaining in each chapter, indicating the existing disputes and options for potential compromises, sources said.

A business source here also said there has been a noticeable uptick in the number of intersessional meetings that have taken place since the May round of talks in Peru compared to the intervals between past rounds.

A U.S. trade official here did not directly address the issue of whether negotiators are under instruction to substantially conclude all chapters by the end of the next round. “We are trying to get as much work done as we can in each successive round and we have made good progress here this week,” the official said in an interview with Inside U.S. Trade.

But the official acknowledged that the Malaysia round had been preceded by an intense schedule of intersessional meetings since the Peru round in May. As a result of this work, negotiators are “in the position of closing on as many issues as possible and that’s encouraging,” the official said.

According to the official, all negotiating groups meeting in Kota Kinabalu had some form of intersessional engagement prior to this round through actual meetings, video conferences, or plurilateral gatherings where a subset of countries within a group tried to advance certain issues. At least four of the 13 negotiating groups meeting this round held physical meetings after Peru, the official said.

The official agreed with the assessment of the Malaysian government that 14 of the 29 TPP chapters were considered substantially before the start of the round here.

In a brief released June 20, Malaysia identified the chapters that are substantially closed as sanitary and phytosanitary (SPS) measures, customs, cross-border trade in services, telecommunications, temporary entry, government procurement, labor, cooperation and capacity building, competitiveness and business facilitation, development, small and medium enterprises (SMEs), regulatory coherence, initial and general definitions, and administrative and institutional provisions.

No date has been set for the Brunei round in August, but a business source said the TPP meetings could take place in the last week. However, it is unlikely that there would be an overlap between the TPP negotiations and the annual meeting of the Association of Southeast Asian Nations (ASEAN) trade ministers, which is scheduled for Aug. 20-24. Brunei is hosting this year’s ASEAN meeting, this source said.

The ASEAN ministers’ meeting and other upcoming opportunities for high-level political engagement on TPP will be instrumental in moving the talks toward conclusion by the APEC meeting, according to this source.

Vietnamese President Truong Tan Sang will visit Washington on June 25 to meet with President Obama and the White House has announced that the agenda includes the need to complete a “high standard” TPP deal. Vice President Biden is also scheduled to visit Singapore on July 25 after stopping in India.

The U.S. official said the U.S. would naturally use those events to make further progress toward reaching a final TPP deal. “When the opportunities present themselves, like the Vietnamese president’s visit next week, we will take those as opportunities for political-level engagement,” the official said.

The U.S. official said the effort now is focused on substantially closing chapters that have less controversial issues and seek progress in chapters that are more contentious.

“The chapters that are the most sensitive, you are trying to make progress but you’re not likely to be able to substantially close [those], and the ones that you have less controversial issues, in the continuum, you will try to substantially close,” the U.S. official said.

The official explained that “substantially” closing a chapter means different things for different chapters. For example, in some cases, chapters cannot be concluded because there are a small number of issues that depend on decisions that need to be made in another negotiating group, according to the official.

In other chapters, there are rules issues that are dependent on the outcome of market access negotiations, according to the official. “So those outcomes need to be reflected in the chapter when the market access is done,” the U.S. official said.

In a third circumstance, a chapter may contain issues so contentious that they cannot be resolved by staff negotiators. “Resolution of those issues will depend on political decisions later when the final package comes together, but there is no reason for the negotiators to meet at this stage because we’re not going to resolve it until later on,” the official said. 13. Mr. Froman on TPP

Washington Trade Daily, July 18, 2013

US Trade Representative Michael Froman is optimistic that negotiations on the TransPacific Partnership agreement can by wrapped up by the end of this year, although he acknowledged yesterday that the deadline is an “ambitious” one (WTD, 7/18/13).

In his first appearance before the House Ways and Means Committee since assuming the top post at USTR, Mr. Froman said he believes the year-end goal for concluding the negotiatons can be reached even with Japan’s late entry.

The latest round of negotiations is taking place now in Malaysia. Japan will formally join the talks next week in the final days of the round.

Mr. Froman acknowledged that concluding the TPP this year will be a complicated process, but there is strong political will among the 11 countries to succeed. Striking a final deal will mean addressing difficult issues that remain on the table. The US strategy is to work “country-by-country and issue-by-issue” to get a sense of the trade offs that will be required to close the deal, he told the committee.

Ways and Means Chairman Dave Camp (R-Mich) expressed some concerns about whether Japan is ready to open up in sectors like automobiles, insurance and agriculture and to do away with long-standing nontariff barriers that keep US products out of the market. Ranking Democrat Sander Levin (Mich) said he is working on an action plan on how to address Japan’s NTBs that he will present next week to the Administration.

Mr. Froman stressed that the White House agreed to allow Japan into the talks only after Tokyo promised to take some immediate steps in those areas and participate in a set of parallel negotiations on specific issues. He assured members that the Administration has not agreed to any “up-front” exemptions of Japan’s sensitive products, even though Japanese officials have said they will insist that some products be excluded.

Speaking to reporters following the hearing, Mr. Froman said he believes the Abe government sees the TPP as a means to undertake structural reforms that might otherwise not be possible.

Messrs. Camp and Levin both said the time has come for the Administration to take on the issue of currency manipulation by trading partners. Rep. Levin said both the TPP and the TransAtlantic Trade and Investment Partnership agreement should include provisions to address currency manipulation. He also suggested that Congress tackle the currency issue as part of Trade Promotion Authority legislation it is likely to consider later this year.

Mr. Froman declined to say whether currency was on the table in the TPP. He said only that the Administration recognizes the importance of the issue and tries to address it in whatever way seems most effective.

Other Issues

On other issues related to TPP, Mr. Froman said –

● the US proposal for a consultative mechanism to resolve disputes regarding sanitary and phytosanitary measures would be quick and efficient. Many of the disciplines on SPS being negotiated would be subject to World Trade Organization dispute settlement – but that can be a time-consuming process;

● the Administration is still seeking the “right balance” between protecting innovation and access to medicines. US text has not yet been tabled, but Washington is engaged with TPP partners on the issue. He declined to say whether the Administration will stick to the 12 years of protection for biologics contained in US law or opt for the seven years that the President has proposed. The Administration’s current focus is on explaining the current 12-year law to other TPP countries;

● the Administration believes that the “yarn-forward” rule for textiles and apparel strikes the right balance between the interests of US producers, importers and retailers of apparel and US consumers; and

● countries are already lining up to be in the second tranche of TPP membership once the agreement is concluded.

Vice President Biden said yesterday in a speech to the Center for American Progress that the Administration has already had discussions with countries in the Americas and the Asia-Pacific region that want to join the TPP. The agreement is creating strong incentives for other nations to raise their standards so they can join, he stated. 14. TPP Talks Kick Off in Malaysia; Japan Waits

Japan Times, July 15, 2013

KOTA KINABALU, MALAYSIA – The 18th round of the Trans-Pacific Partnership free trade negotiations began Monday in Malaysia as Japan prepares to make its debut near the end of the 11-day conference.

Japan won’t enter the talks until July 23, when the United States, the leading economy in the TPP, completes its 90-day waiting period for notifying Congress that it intends to open trade negotiations with Japan.

The session involving the working group on market access covering tariff elimination — a crucial issue for Tokyo — is expected to conclude before Japan gets to the bargaining table, four months after announcing its intention to enter the talks.

But July 25, the last day of the round in the Malaysian resort of Kota Kinabalu, will be devoted to Japan, with top negotiators from other TPP countries giving the country updates on the status of the negotiations, which are now in their fourth year. This will likely give Japan a chance to state its position.

With Japan’s participation, the TPP countries would account for nearly 40 percent of global GDP and about a third of all world trade, even without China as a member.

Japan is aiming to retain its tariffs on such key farm products as rice and beef, while eliminating import duties on Japanese automobiles and other manufactured goods.

The TPP negotiations comprise 21 working groups on 29 chapters, including investment and government procurement.

Malaysia recently released a brief document on the TPP stating that “negotiations on technical and less contentious issues are considered substantially closed” in 14 of the 29 chapters, while “there are still outstanding issues that are sensitive and will require discussion at a later stage of the negotiations.”

Member countries are trying to hammer out a basic agreement by October and to conclude a deal by the end of the year, although some speculate the talks could fall behind schedule.

Since each member has sensitive sectors, the negotiations are likely to become more difficult as they progress.

Japan’s belated entry could also complicate the talks, because it is seeking to keep some farm products exempt from the free-trade pact’s ideal of total tariff elimination.

15. Negotiators Engage On Apparel Short Supply, Vietnam Makes Tough Demands Daily News, July 23, 2013

KOTA KINABALU – Negotiators here have been working through conflicting proposals for defining a “short-supply” list of yarns, fabrics and apparel that would provide flexibility to a yarn-forward rule of origin for textiles and apparel under a final Trans-Pacific Partnership (TPP) deal.

All TPP members have submitted short-supply proposals, but sources said in light of the different approaches presented, considerable work remains before countries will be able to reach final agreement on apparel rules of origin.

A U.S. trade official implicitly acknowledged that the issue of short-supply is far from resolved. “We had discussions here and will go back and consult with all our stakeholders and our Congress,” the official said.

Vietnam, for instance, continues to make tough demands for modifying the proposed rule of origin and the short-supply list that has been offered as a de facto derogation to that rule.

Other countries, such as Australia, have made short-supply proposals that include products for which the U.S. argues there is already manufacturing capacity among TPP members and therefore they should not be eligible for the list.

The U.S. has proposed a yarn-forward rule of origin that focuses on using regional fabric and inputs for eligible apparel, coupled with a permanent short-supply list of exemptions and a temporary short-supply list that would last three years.

This approach is being questioned by U.S. importers and retailers, although it is supported by the U.S. textile industry, which wants to promote the use of regional yarn and fabric.

One source critical of the short-supply process said Vietnamese negotiators have stressed that they want to end up in a position where they could support a yarn-forward rule of origin, but the exceptions they enumerated “would make it yarn forward in name only.”

These changes would deal with how the rule would be structured, what items would be placed on a short-supply list and the procedures for adding items to the list, this source said.

Vietnam, a major apparel exporter, has the most to gain from a rule of origin that allows maximum flexibility for use of inputs from non-TPP countries. Because Vietnam has limited capacity for manufacturing yarns and fabrics, much of what it exports is apparel cut and sewn from yarns and fabrics manufactured in China, Taiwan and South Korea.

Sources here said U.S. negotiators have tried to ward off other short-supply recommendations, especially those items for which it believes there is some level of manufacturing capacity in the U.S.

For example, Australia’s short-supply proposal most likely contains primarily wool products. As the world’s largest producer of apparel wool, Australia is seeking to have yarns and fabrics made from its wool exports in non-TPP countries receive tariff benefits under the agreement. Most Australian wool is processed into yarns and fabrics in China and Italy.

However, the U.S. has maintained a very small level of capacity to produce wool into apparel, which has survived primarily for the manufacture of U.S. military uniforms under the Berry Amendment. The amendment requires the Department of Defense to give procurement preferences to U.S.-made products.

U.S. negotiators here have argued that most wool products do not belong on the short-supply list because there is already capacity in the U.S.

But industry sources in support of Australia's approach argue that because U.S. wool production capacity is mainly in place to serve the military, it could be argued that there is a commercial shortage of wool yarns and fabrics in the U.S. It can also be argued that the current level of manufacturing in place to fulfill the Berry Amendment would not be sufficient to handle the massive amounts of wool exports Australia seeks to benefit with tariff reductions among TPP members, they said.

The U.S. trade official also signaled that outcomes on market access negotiations for apparel are tied to a decision on rules of origin on apparel.

“We have an approach associated with those market access negotiations with each of those countries and that is also related to what’s going on in the discussions on the short supply list,” the official said.

The current U.S. short-supply proposal contains 173 items, with the possible addition of another 13 that were being vetted by U.S. industry prior to the start of the round. A short-supply list would contain items not readily found in the TPP region or for which there is little manufacturing capacity.

Sources here conceded that market access discussions on textiles and apparel are unlikely to make much progress until the rule of origin can be sorted out.

When asked if the U.S. were considering introducing any additional flexibilities to its yarn-forward rule of origin proposal, the official would only say that TPP members were currently only engaged on short-supply discussions.

The U.S. does not appear to be willing to discuss the option of other flexibilities to the yarn-forward rule, despite the fact that all past U.S. free trade agreements contain more than one flexibility to yarn forward. For example, some past FTA allow some products to qualify for tariff preferences under a cut-and-sew rule or by establishing tariff-preference levels, which function as quotas for non-eligible apparel that gets the relevant FTA benefits.

“I’m still optimistic that the short-supply process can yield some significant flexibilities,” one source said.

The U.S. has taken a strong position that a final TPP deal adopt a yarn-forward rule of origin, which requires every component of a qualifying apparel item, starting with the yarn, to be made within the TPP region. A short-supply list would contain items not readily found in the TPP region or for which there is little manufacturing capacity. Short supply items could then be used in a garment that would still qualify for tariff benefits.

Editor's Note: Due to an editing error, the original version of this story incorrectly stated that not all countries have put forward short-supply proposals. All TPP countries have submitted short-supply proposals. 16. Vietnam Joins New TPP Negotiations in Malaysia

Baomi.com, July 17, 2013

(VOV) - Vietnam is joining 11 other countries at the 18th round of Trans-Pacific Partnership (TPP) negotiations in Malaysia from July 15–25.

TPP challenges to garment sector US businesses support Vietnam’s TPP agreement negotiations TPP facilitates Vietnam’s global integration

The parties involved are Japan, the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Relevant agencies will present their opinions and concerns regarding the negotiations at a special forum on July 20.

Participating delegation representatives have scheduled a press briefing for July 25 to update the TPP negotiations’ progress. All 12 countries are striving to finalise negotiations later this year.

Encompassing more than 792 million people, TPP member countries contribute nearly 40% of global GDP and one-third of total trade value.

The TPP seeks to promote deeper economic integration towards eventually establishing an Asia-Pacific Free Trade Area.

17. TPP Agreement Facilitates Vietnamese Goods Communist Party of Vietnam Online Newspaper, July 7, 2013

The Trans-Pacific Partnership (TPP) agreement, once realised, will help push forward Vietnam’s market reform, modernisation and integration, said participants at a July 17 seminar on the TPP’s impacts.

Addressing the seminar, Ray Nayler from the US Consulate General in Ho Chi Minh city said the TPP would create many favourable conditions for Vietnamese exports to penetrate the markets of the US, Australia and other TPP members. At the same time, it will help increase the flow of foreign investment into Vietnam.

According to Nayler, besides the increase of export staples such as garment and textiles, seafood, and wood products, Vietnam will also access more markets for its new products such as auto parts and processed seafood, as well as expand trade partnership.

At the same time, participants noted that each TPP member can benefit from the agreement only when they also allow other members to access their domestic markets, as TPP is a reciprocal arrangement.

Ho Chi Minh city Department of Customs said it has adopted electronic customs procedures, which is a practical tool in helping businesses improve competitiveness when Vietnam joins the free trade markets.

The seminar was held by Ho Chi Minh city Business Association, in partnership with Vietnam Union of Friendship Organisation and the American Chamber of Commerce in Vietnam (AmCham Vietnam).

The 18th round of TPP negotiations is taking place in Malaysia from July 15–25.

Negotiations have ended on five of the 29 planned chapters including trade facilitation, telecommunications, small and medium-sized enterprises and have effectively been completed on nine others. 18. Malaysia Yet To Decide On TPPA

National News Agency of Malaysia, July 16, 2013

KUALA LUMPUR, July 16 (Bernama) -- The government has not made any decision on the Trans-Pacific Partnership Agreement (TPPA) which is currently underway in Kota Kinabalu, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed. "It is still at the discussion stage, but nothing is definitive yet," he said when met at Parliament lobby here Tuesday. The TPPA is an agreement that the United States, as the leading negotiator, is hoping to ink to consolidate its role in developing a broader platform for trade liberalisation, particularly throughout the Asia-Pacific region. Malaysia is currently negotiating with 11 other countries to conclude the TPPA, a multilateral trade agreement involving Australia, Brunei, Canada, Chile, Mexico, New Zealand, Japan, Vietnam, Peru and Singapore, apart from the U.S. Mustapa said the government would ensure that its sovereignty and national interest were protected and would take into account public views, including those who protested against it, before making any decision on the TPPA. "If it is damaging to the national interest, of course, we will not sign it. What is most important, the national sovereignty, the rule of law and the federal power must be defended," he said.

Mustapa said this was because the agreement seemed to benefit foreign multinational companies, including in suing the government if the country's law was not in their favour, apart from impeding the development of local companies. The 18th round of negotiation is expected to conclude on July 25 with the final agreement expected to be inked in October. -- BERNAMA 19. TPP Malaysia Round, Fallout from U.S.-EU Talks and S&ED, USTR Testifies

Inside U.S. Trade, July 15, 2013

The 18th round of negotiations for the Trans-Pacific Partnership (TPP) starting today (July 15) in Malaysia will headline the U.S. trade agenda this week, shifting gears from last week's focus on the negotiations for a U.S.-EU trade agreement and high-level talks between the United States and China.

Inside U.S. Trade will have a reporter on the ground in Kota Kinabalu, Malaysia, providing regular coverage until the conclusion of the round on July 25. The round kicks off amid signs that the Obama administration wants to resolve the dispute with Vietnam over apparel rules of origin by September. The two sides held a separate bilateral meeting in advance of the round, which sources said was the first time the U.S. met bilaterally with a TPP trading partner specifically on the issue of textiles immediately ahead of a round.

The rule of origin for apparel is so critical because Vietnam has refused to fully engage in industrial goods market access negotiations, and other aspects of TPP, unless the U.S. drops its demand for a rule that requires all eligible apparel to be made from regional fabric and inputs.

Another factor that may impact the ability of TPP countries to conclude the deal by October -- their stated goal -- is Japan's entry into the talks, which will occur mid-round on June 23 after the conclusion of a 90-day consultation period within the U.S.

A Japanese official last week held open the possibility that Tokyo may seek to reopen texts already agreed once it has reviewed them, which runs counter to the position of current TPP partners that new entrants cannot reopen provisions on which consensus has already been reached. But even if Japan accepts all the text that has been agreed so far, the most controversial issues are still open and Japan is free to table new proposals on these issues.

U.S. auto companies are still pushing back against Japan's participation in TPP. General Motors is urging its dealers, employees, suppliers, retirees and customers to sign an online petition to members of Congress seeking "important restrictions" in a final agreement to ensure that the U.S. also reaps benefits from the deal.

A cover note says the petition is an effort to influence the details of the agreement so it includes a "strong, enforceable currency disciplines that will prevent Japan from manipulating the value of the yen and opens the Japanese market to U.S. products." It also notes that GM, Ford, Chrysler and the UAW are all united in this effort.

This week's focus on TPP shifts attention from two other major trade events that were in the spotlight last week: the U.S.-EU negotiations and the U.S.-China Strategic and Economic Dialogue (S&ED).

Treasury officials said last week that commitments made by Beijing at the S&ED would open the door to intensive U.S.-China negotiations for a bilateral investment treaty. Treasury Undersecretary Lael Brainard will shed further light on the S&ED outcome in remarks at the Carnegie Endowment today (July 15).

On the U.S.-EU negotiations, the European Commission is holding a briefing for stakeholders on July 16, but it remains to be seen how forthcoming commission negotiators will be. The first round of talks last week did not delve deeply into substantive issues and instead gave negotiators an opportunity to discuss similarities and differences in their objectives as well as technical matters, such as how to structure the chapters of a potential deal.

Engagement between senior U.S. and European officials will continue this week when U.S. Trade Representative Michael Froman holds separate meetings on July 16 with EU Commissioner for Internal Market and Services Michel Barnier and EU Commissioner for Energy Gunther Oettinger, according to USTR's weekly press schedule.

Barnier's office has jurisdiction over financial regulation and public procurement, which are both shaping up to be major issues in the negotiations for a U.S.-EU trade agreement, also known as the Transatlantic Trade and Investment Partnership (TTIP).

Froman and Deputy USTR Miriam Sapiro are also slated to hold separate meetings this week with Jean-Luc Demarty, the director-general of the commission's trade arm. In addition, Froman will discuss TTIP in keynote remarks at a July 17 closed-door meeting hosted by the Transatlantic Policy Network.

Sapiro will also hold meetings on July 16 with representatives from the European Parliament, including officials from the European People's Party and Progressive Alliance of Socialists and Democrats. She will also meet this week with a representative from the office of Parliament President Martin Schulz, as well as with parliamentarians from the foreign affairs and environment committees.

In a related development, the EU will be under scrutiny this week in Geneva as its trade regime is examined under the Trade Policy Review at the World Trade Organization. That review will take place on July 16 and 18, according to the WTO.

Also in Geneva, negotiators from more than 20 countries this week are trying to seal an agreement on new products to include within the scope of an expanded Information Technology Agreement. The effort to widen the tariff-cutting deal – first inked in 1996 – faces an uphill battle, with China resisting tariff cuts on roughly half of the products being discussed.

TPP, TTIP and a possible renewal of fast-track negotiating authority will likely be among topics addressed when Froman testifies on July 18 before the House Ways and Means Committee on the president's trade policy agenda.

Chairman Dave Camp (R-MI) strongly supports renewal of fast track, also known as Trade Promotion Authority (TPA). The staff for the chairmen and ranking members of the Ways and Means and Senate Finance committees have been working on a new TPA bill, and Finance staff has apparently not given up on the idea of holding a hearing in July to explore fast track. After first floating July 11 as an “aspirational” date for the hearing, staff had subsequently discussed holding it tomorrow (July 16), but that is now unlikely since Finance must give notice at least a week in advance.

The Senate is also slated to take up several trade-related issues this week. It may begin consideration as early as tomorrow on the nomination of Fred Hochberg to serve another term as the president and chairman of the Export-Import Bank, along with a series of other executive branch nominations. In addition, a Senate Appropriations subcommittee on July 16 is slated to mark up a fiscal year 2014 funding bill that will include appropriations for the Commerce Department and USTR.

Also on the agenda this week is a visit of senior executives and CEOs from the U.S. steel industry to meet with members of Congress and administration officials to discuss trade issues such as currency manipulation and import trends, as well as tax reform and energy. The delegation from the American Iron and Steel Institute is slated to meet with Froman on July 16.

One of the biggest trade issues facing the steel industry is global overcapacity that has risen to such an extent as to threaten the viability of steel producers in developed countries. The issue was raised in the July 1-2 meeting of the steel committee in the Organization for Economic Cooperation and Development (OECD), where all participants -- including China, Russia, India and Brazil -- agreed that excess capacity is a major problem but failed to give any indication as to how this might be addressed. 20. Malaysia Stands to Gain from TPPA

The Borneo Post, July 15, 2013

KUALA LUMPUR, July 14 (Bernama) -- Concerns that the Trans-Pacific Partnership Agreement (TPPA) will be disadvantageous to Malaysia are largely misplaced as negotiators will certainly safeguard the country's economic and trade interests during the trade talks. As a trading nation, it makes economic sense for Kuala Lumpur to join the TPPA to gain greater access into the markets of its trading partners especially the United States, Japan and ASEAN. Unfortunately, irresponsible quarters are circulating what the Ministry of International Trade and Industry (MITI)

describes as inaccurate information. Among them are allegations of a study by the United Nations Development Programme (UNDP) containing recommendations for Malaysia not to sign the TPPA. MITI rightly has come out to categorically deny these allegations saying that they "grossly misrepresent the Malaysian Government's position with regard to our trade agenda." The public can be rest assured that Malaysian negotiators would safeguard the country's domestic trade and economic interests and more importantly the New Economic Policy (NEP). They are not going to sell out the country. After all, the Cabinet has to give the go-ahead to Malaysia's offer at the talks which begins its 18th round in Kota Kinabalu from July 15 to 25, before any deal is signed. Claims that the US and Japan will close off their markets to Malaysia and disadvantage domestic industries, is again misplaced for America has been a major market for local semi-conductors and electrical and electronic components for so long. Although it is a trade deal, it also impacts foreign investments whereby Japan has been a major investor in Malaysia along with the US and ASEAN countries. Investments follow trade closely, thus there will be obvious advantages to Malaysia both in terms of expanded markets and inflow of investments. For instance, the textile industry has come out in full support of the TPPA, saying Malaysia's total textile and apparel exports are projected to increase by 20 per cent with the implementation of the pact. The Malaysian Textile Manufacturers Association says the elimination of duties under the trade pact would make Malaysian textile and apparel products more competitive. Exports to TPP member countries in 2012 amounted to RM3.3 billion. The TPP agreement will see a decrease of import duty for Malaysian textile and apparel products entering the TPP member countries. TPPA, a free trade initiative involving 12 countries, is expected to expand exports of participating countries into a large global market base and provide cheaper product base for consumers. This is through an effective lowering of proposed tariff among participating countries. With the proposed elimination or reduction of duties in the TPP agreement, Malaysian products would be more competitive, particularly in the larger US market. In any trade pact, there would be a certain amount of give and take with concessions having to be made by some countries. Malaysian negotiators would just have to tread carefully. Judging from the strong stand they took against the US and Europe and other developed countries at the World Trade Organisation (WTO) talks which collapsed in Cancun, the people can be rest assured that TPPA would benefit Malaysia in the long-run. Negotiating countries for the TPPA include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, US and Vietnam. Japan will make its entry as the 12th TPP member in Kota Kinabalu, Sabah. Member countries are targetting to conclude negotiations by this year with the aim of liberalising trade. There are fears that the US is forcing the TPP aimed at sidelining China, which is unfounded because Chinese exports

to the US runs into the billions of dollars. The American economy is inextricably linked to the China and no one economy can shut out cash-rich China. It also has a huge market and most multinational companies are already well-represented in the vast lucrative market. The governments from where these MNCs originate are certainly not going to do anything to jeopardise trade and economic linkages with China. At the 18th round of the TPP negotiations, 180 stakeholders will be presenting their views. Progress of the TPP negotiations in Kota Kinabalu is expected to be assessed during the Asia-Pacific Economic Cooperation (APEC) leaders meeting in October in Bali this year. For Malaysia, the clear message in negotiating the TPPA is for domestic industries and the economy to become more competitive in an undoubtedly challenging globalised environment. --BERNAMA 21. China Interested but Still Long Way from Moving to Join TPP, Trade Experts Say

National News Agency of Malaysia, July 14, 2013

Key Development: Experts say China likely is far from actively seeking to join the TPP talks, though the country says it is studying the advantages and disadvantages.

Potential Impact: If China does join the negotiations, it could make those negotiations much more difficult as most experts do not think China is ready to acquiesce to regulatory harmonization that is involved in TPP.

What's Next: If China asks for TPP observer status, that could mark a more significant move toward actively joining negotiations.

SHENZHEN, China—Chinese officials recently expressed interest in joining the proposed Trans-Pacific Partnership agreement and are studying the ongoing negotiations—which are currently in their 18th round at Kota Kinabalu, Malaysia—but experts say China likely is far from actively seeking to join the talks.

The most recent official comments came in late May when Shen Danyang, a spokesman for the Ministry of Commerce (MOFCOM), said China was studying the “advantages, disadvantages and the possibility of joining the TPP based on careful research,” echoing comments he made at the National People's Congress meetings in Beijing in March.

Reading from nearly the same script, Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, which is under MOFCOM, told BNA by phone July 17 that China has not done enough research yet on TPP.

“It is not a yes or a no question of joining the TPP,” Bai said. “China needs to know what the advantages and disadvantages are.”

While Chinese officials have been careful to remain essentially neutral in comments about TPP, early reaction from commenters and trade academics in China when negotiations on the trade pact began at the end of 2011 saw it as a U.S. plot to encircle China as part of an overall geopolitical “Asia pivot” strategy, Scott Harold, a China specialist at RAND Corporation who has studied that commentary, told BNA by phone on July 17.

Since those early reactions, however, Harold said it seems there has been an effort to “tamp down some of the very strident framing comments” that trade experts and academics were making, and that officials were taking a neutral stance of studying and watching TPP developments.

The only real signal the Chinese could send about whether they are serious about acting on TPP “would be if they asked for observer status,” Harold said.

“China is certainly keeping an eye on the TPP negotiations,” Eugene Lim, head of Baker & McKenzie's International Trade Practice in Hong Kong and China, told BNA by phone on July 17. “It is going to be a significant trade agreement for many countries in this part of the world.”

China More Focused on Other Talks

China is focusing more active attention on hatching a somewhat stalled free trade agreement with Japan and South Korea, as well as beginning the first stages of negotiations on the Regional Comprehensive Economic Partnership (RCEP).

The RCEP is a potential free trade agreement for the 10 countries of the Association of Southeast Nations (ASEAN) along with India, Australia, and New Zealand. Negotiations for RCEP were launched at meetings in Brunei in May.

When assessing China's interest in the TPP, it is important to understand China's involvement in negotiations for the RCEP negotiations, which have a “less complex negotiating agenda,” Lim said, and could be concluded by 2015.

Whether China would join TPP negotiations “remains to be seen” because there are many areas of TPP that “China would potentially struggle with implementing,” Lim said, pointing out hurdles related to requirements on labor, competition laws, and environmental regulations as possible sticking points for that country.

China could be quite far off from involvement in the TPP negotiations, Harold said, noting the gap between China's aims and the TPP's aims and the length of time—from the early 1980s to the late 1990s—that China took between expressing interest in the WTO and joining.

Fundamental Differences in Goals

“China's [economy and political system] is so fundamentally different from what the TPP is aiming at,” Harold said. He pointed out issues similar to those raised by Lim, such as the TPP's goals of harmonizing the regulatory environments between the member countries and making it possible for parties to seek direct action within the courts of a member country, something that would be hard for China to accept currently.

But these are also hurdles for countries involved in the negotiations, such as Peru and Vietnam, and if China does decide to join negotiations, “it would add a lot more value to the TPP agreement by allowing the U.S. and China to engage these countries on potentially equal footing,” Lim said.

Some observers also sense that countries currently involved in the TPP negotiations might not want China to join in during the early phase because its participation could bog down and complicate negotiations. Also, relations with countries that would have to accept China's involvement in the negotiations—particularly Japan, and to a lesser extent, Vietnam—are at a particularly icy stage because of disagreements regarding sovereignty over islands in the region.

“If China joins the TPP, the negotiations will surely be more difficult, since [China] is the number one in trade volume and the U.S. is number three,” Bai said. “Negotiations between two of the biggest economies could be difficult. I don't know if there is a timetable on this.”

China likely would want to “have a bigger say on the text of the agreement” and have the flexibility to “revisit the negotiated text” if it did join the TPP agreement, Lim said.

22. Japan May be Latecomer but TPP Trade Party Has Just Begun Japan Times, July 22, 2013

Japan will finally sit down at the table with 11 other nations in Malaysia on Tuesday to negotiate the trade rules for the Trans-Pacific Partnership agreement after years of contentious political wrangling.

The current TPP participants — Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam — have already gone through 17 rounds and aim to reach an agreement by year’s end. Late-comer Japan has only three days left to state its case before round 18, which started July 15, ends on Thursday.

But Japan, whose GDP accounts for more than a fifth of all 12 TPP nations combined, still has a solid chance to be on the leading edge of drafting new trade and investment rules for the Asia-Pacific region.

Experts say that Japan’s economy is already open in many sectors, to a certain extent, and that Tokyo should aggressively negotiate to get the other participants to further open their markets, too. But they also said that Japan will not be able to protect all of the sectors the government has deemed “important” enough to shelter with high tariffs, including rice, beef, pork, sugar, dairy products and wheat.

The game is just beginning, says Yorizumi Watanabe, a professor of international political economy at Keio University.

“It is not too late. Actually, the negotiations won’t get into full swing until Japan joins,” said Watanabe, a former trade negotiator.

While the TPP could end up becoming a new global trade standard, Japan will have to make sacrifices to remain a player in what is being touted as the world’s most progressive regional economic integration scheme.

One of these sacrifices is built into the TPP scheme: New entrants, like Japan, must in principle agree with what was decided in the earlier rounds.

Watanabe, however, said that a key official from one of the TPP participants told him that little progress has been made in drafting the rules for the free-trade accord or in abolishing tariffs.

Other experts said that Japan should thus get actively involved in crafting rules for 21 fields, including investment, trade remedies, government procurement and competition to create a high level of regional economic integration.

University of Tokyo professor Junji Nakagawa, an expert in international economic law, said that a major goal for Japan should be to open up other markets in a way that is conducive to Japanese business.

“Japanese firms have been building big supply chains in the Asia-Pacific region. It’s important that the trade and investment markets in this region are open so that they can do business in more stable, vigorous ways,” Nakagawa said.

Liberalizing government procurement is one goal Japan is keen to push. Only four of the TPP countries, including Japan, are party to the World Trade Organization’s government procurement agreement, which requires that fair and open access be provided to overseas firms.

If the other TPP members agree to open their government procurement markets, it will create more business opportunities for Japanese companies eager to build infrastructure in emerging countries in Asia, Nakagawa said.

Competition policy is also part of the TPP process. The United States is seeking to level the playing field by urging participants not to allow state-owned enterprises to hold the advantage in their markets.

Japan has privatized, to a greater or lesser extent, many of its state-owned enterprises, making it possible to accept the U.S. proposal, which would apparently make it easier for Japanese firms to enter overseas markets, Nakagawa said.

Watanabe meanwhile said that Japan could actually lead the negotiations.

“Japan’s GDP accounts for 22 percent of the 12 TPP members. This is a huge and attractive market to the other members, so the size of the Japanese market is a resource for negotiations,” he said.

Japan has also acquired valuable negotiating experience by participating in other trade talks, including the General Agreement on Tariffs and Trade, the WTO and bilateral free-trade pacts.

Watanabe said chief negotiator Koji Tsuruoka is an experienced hand who will be aided by a contingent of more than 100 officials that will help him get up to speed on the talks.

“We have to fill the information gap among the existing TPP countries as soon as possible,” Akira Amari, the minister in charge of TPP issues, said July 16. “Through this round, we will firmly inform other countries about our government’s stance.”

But experts said Japan will have no choice but to drop protections on certain sensitive products because the TPP will mandate a high standard for opening markets. Japan has imposed tariffs on about 9,000 items but has never relented on 940 of them — including rice, milk and beef — in past FTAs. Nakagawa said members will probably have to free up around 98 percent of their protected sectors, including items that Japan deems sensitive. On the other hand, Japan wants other countries to lift tariffs on industrial products, including cars.

Watanabe, who was chief negotiator for the FTA with Mexico signed in 2004, said trade talks are all about balancing interests.

“It’s important that offers and requests are balanced. Japan can’t be the sole winner,” he said.

Both Nakagawa and Watanabe said it is critical that Japan remain on board with the TPP. Since Japan is also pursuing free-trade pacts with China and South Korea, as well as with the EU and with the Association of Southeast Asian Nations, its experience with the TPP will allow it to play a leading role in setting international trade rules.

“Global trade and investment rules are not something that change frequently. The current rules are based on GATT and have been in place for about 60 years . . . the rules currently being drafted will possibly be in place for the next 50 years, too,” Nakagawa said.

“Japan can play a significant role in the rule-making process and spread the new rules to ASEAN and the EU. This is a big chance,” he said.

While the TPP members are aiming to conclude the talks by the end of the year, Nakagawa and Watanabe said that goal is unrealistic, especially now that Japan has joined. After Malaysia there will be a couple more rounds, but not enough to wrap up the TPP by year’s end, they said.

Watanabe said the U.S. probably wants to reach an agreement by the time of the general election in autumn 2014, because President Barack Obama, who promised to double America’s exports in five years, will want to point to the TPP deal as a sign of progress.

Watanabe also said China has been closely studying the TPP process and noted it is just a matter of time before the world’s second-biggest economy joins in.

But the high market-opening standards pursued by the TPP will make it difficult for China, which has many powerful state-owned enterprises, to join before the current members reach an accord, Nakagawa said. 23. Japan election Results Could Boost US-Pacific Free Trade Pact

The Hill, July 21, 2013

The strong showing for the Liberal Democratic Party in Sunday’s Japanese elections could boost the prospects for the U.S.-backed TransPacific Partnership (TPP) free trade agreement.

Exit polls indicate that Prime Minister Shinzo Abe, who supports TPP, won big in the voting for the Diet’s upper house.

"During this election voters overwhelmingly told us that they want us to push on with our economic policies," Abe said in a press conference touting the result.

The prime minister’s coalition is poised to control both houses of the parliament for the first time since 2007. The main opposition Democratic Party of Japan (DPJ) won only 17 seats.

Broadcaster NHK said Abe’s Liberal Democratic Party and its ally New Komeito are poised to gain at least 76 of the 121 seats up for grabs in the election. This would give Abe’s coalition an outright majority of 135 out of 242 seats in the upper chamber.

In Japan, control of the lower house in the Diet determines which party can form an executive government and name a prime minister, but the upper house has the power to block legislation over the objections of the prime minister.

Abe was selected by the LDP to be prime minister in December but his program, popularly known as “Abenomics,” which spurs growth at the risk of higher inflation, has been stymied by the upper house.

The TPP pact could require Japan to drop long-standing automotive and agricultural barriers and only a fully empowered Abe was seen as being able to enact the changes.

President Obama informed Congress this spring that the U.S. intends to include Japan in the ongoing TPP talks. Japan participated in the latest round of TPP talks in Malaysia last week.

Official election results are expected on Monday.

24. Japan Joins TPP the Afternoon of July 23 Washington Trade Daily, July 12, 2013

Japan is slated to make its debut at the Trans-Pacific Partnership trade talks on July 23, but its participation will be limited to only three days of the 11-day session set to be launched by the United States and 10 other countries in Kota Kinabalu, Malaysia, on Monday, Jiji Press news service reported from Kuala Lumpur (WTD, 7/12/13). Japan will likely be able to join the 18th round of TPP talks on the afternoon of July 23 after the United States completes its official procedures for granting approval to Tokyo’s participation. The Malaysian session is set to last until July 25.

While the current 11 members in the free trade negotiations are aiming to conclude the talks by the end of the year, Japan is required to accept all agreements reached to date. The United States and the 10 other countries — Canada, Mexico, Peru, Chile, Brunei, Malaysia, Singapore, Vietnam, Australia and New Zealand — have already wrapped up discussions on such issues as telecommunications and capability development, according to sources close to the talks.

From now, the focus will shift to market access, an area where the strategic interests of the various countries conflict. The key for Japan will be whether it can secure exemptions from the TPP’s basic principle of tariff elimination, for rice and some other farm products. Among other difficult issues is the so-called investor-state dispute settlement system, which allows investors to sue foreign governments if they suffer losses in those countries due to regulatory barriers and other obstacles. Australia, for example, opposes the ISDS mechanism and thus is at odds with Washington. The Australian government argues that it has a sufficient system to address such disputes based on current laws.

In the field of intellectual property protection, the United States wants to extend the patent period for pharmaceutical products. But Malaysia is strongly opposed, saying that the proposal, if accepted, will likely delay the launch of more affordable generic drugs. An official at the Malaysian Ministry of International Trade and Industry said that the country is trying to cooperate with other nations so that the TPP negotiations will produce balanced results.

25. Objections to Japan Entry into TPP Continue to Ring Loud Business Times, July 7, 2013

KOTA KINABALU: Japan, the latest addition to the Trans-Pacific Partnership (TPP) agreement, will join in talks later this week but objections to its entry continue to ring loudly. The US automotive industry remains up in arms against its Japanese counterpart, accusing it of being the "most closed automotive market". The Japanese automotive industry has benefited greatly from the significant currency shifts. Ford Motor believes that it is important that TPP shows its "real leadership" in delivering a high-class trade deal, including addressing critical issues like currency mani-pulation.

"It must include an effective means of dealing with an issue with the real potential to corrode the benefits of an entire agreement," said Russell Scoular when presenting his industry's perspective at the stakeholder session, during the ongoing 18th round of TPP negotiations. The American giant, which recognises that close to 40 per cent of global automotive production would soon be shifted to this part of the world, wants the agreement to say no to tariffs, non-tariff barriers and non-World Trade Organisation

(WTO) compliant policies (such as protecting "national champions"). Scoular, who is government affairs manager with Ford Australia, compared the Japanese yen with the currencies of TPP partners like the US and Malaysia. The yen had weakened significantly by 28 per cent against the US dollar and 27 per cent versus the ringgit between October last year and July 10 this year. This has resulted in Japanese automotive players enjoying a windfall from the export of their small cars. Meanwhile, Dr Burcu Kilic, from Public Citizen, a lobbying organisation, warned that addressing the pa-tent issues in TPP could be a challenge with Japan on board. "It has its strong patent regime. Its industry application alone stretches 100 pages. It will be a challenge for Japan and other negotiating countries because Japan not only has a strong system, it also has its own way of doing things."

26. CAFTA-DR Textile Sector May Lose Jobs if TPP Implemented Fibre2Fashion, July 22, 2013

The countries that have signed CAFTA-DR free trade agreement may lose about 100,000 jobs in the textile industry if the Trans-Pacific Partnership (TPP) agreement is signed in its current form, which allows Vietnam to import raw materials from China and export finished goods to the US free of duty, a diplomat has said.

The Dominican Republic-Central America FTA (CAFTA-DR) was the first free trade agreement signed by the US in 2004 with a group of smaller developing economies, namely Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

Speaking at a press conference, Salvadoran Ambassador to the US, Ruben Zamora, said if the countries currently negotiating the TPP allow Vietnam to import textile raw material from China for duty-free exports to the US and other nations, about 100,000 jobs would be lost in Central America and 500,000 jobs in the US.

El Slavador alone would lose about 40,000 jobs in the textile sector, which would be detrimental for the Central American country’s economic growth, he added, according to a La Opinion report.

He said he has already raised the concerns with officials of the U.S. Trade Representative. The Presidents of the Central American countries also voiced their concern during President Barack Obama’s visit to Costa Rica in May this year, he added.

The TPP agreement is currently being negotiated by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States.

In the first five months of 2013, the US imported US$ 3.058 billion worth of textiles and apparel from CAFTA-DR countries, showing a year-on-year increase of mere 1.36 percent, according to Major Shippers Report of the U.S. Department of Commerce.

In 2012, CAFTA-DR textile and garment exports to the US amounted to US$ 7.87 billion.

27. Expanding Latin America – Southeast Asia Economic Cooperation Center for Strategic and International Studies – CSIS Asia House, July 16, 2013

The presidents of Chile, Colombia, Mexico and Peru meet in 2012 during the Fourth Pacific Alliance Summit. Latin American economic engagement and trade with Asia is growing steadily through the Pacific Alliance and TPP. Source: European Southern Observatory’s flickr photostream, used under a creative commons license.

The last year has seen the negotiation and consolidation of two major Latin American trade blocs with the explicit purpose of increasing Pacific trade: the Pacific Alliance and the Trans-Pacific Partnership (TPP). Several Latin American officials have visited their counterparts in Southeast Asia to explore the potential for expanding interregional trade. China

is threatening to supplant the European Union as Latin America’s second-largest trade partner, and the region’s exports to ASEAN countries have increased six-fold since the turn of the millennium.

To be sure, relations between Latin America and Southeast Asia are in the midst of a rapid rise—a rise which stands in stark contrast to the previous, more limited nature of the regions’ affairs. What has sparked this recent effort for dynamic interregional engagement? And what potential does this relationship hold moving forward?

Ultimately, it is unsurprising that the regions are gravitating toward one another—especially on the economic front. Their economies are highly compatible and, by increasing ties, all countries involved stand to benefit. The regions’ comparably sized populations, robust economies with average projected annual growth of over four percent, and economic complementarity largely drive the keen interest in deepening ties on both sides of the Pacific Ocean.

Moreover, as the relationship develops, the regions’ increasingly intertwined economies will likely bring them together in the political realm as well. In the context of a world—and especially a United States and European Union—still struggling to recover from the 2008 global economic recession, Latin American and ASEAN countries are coming to recognize the benefits of engaging increased trade and investment with one another.

The recent developments with the TPP and the Pacific Alliance further this point. The TPP, made up of countries on both sides of the Pacific, is a high-standards trade agreement that seeks to dramatically liberalize interregional trade, address issues of intellectual property, standardize rules of origin, include government procurement, and more. And the Pacific Alliance—currently comprised of Mexico, Chile, Peru, Colombia, and Costa Rica, with many additional observers—has among its goals the firm commitment to its members’ commercial relations with Asia, especially with ASEAN. Pacific Alliance members already have more free trade agreements with Asia than do the rest of the Americas combined with negotiations expected to proceed with little controversy or disruption moving forward.

Given the growth and rapid rise to prominence of both the TPP and the Pacific Alliance, neither of which includes Brazil, Latin America’s largest economy, and their shared goal of improving engagement with Asia, it would not be surprising to see China and Brazil showing interest in these groups moving forward. Indeed, it would be wise for the two to do just that. The Pacific Alliance should be of particular interest to the United States, as well, based as it is on a commitment to democracy, rules-based trade, and parallel economic interests—by and large the U.S. motto in the region.

Latin America is changing—and it is changing fast. The leaders in the region are increasingly branching out. Where they might once have waited on the United States, they are increasingly looking west—not north—for promising markets and mutually beneficial economic relationships. It is these leaders that are now championing economic liberalization and rules-based trade across the Pacific, boosting economies on both sides of the ocean. It is time for the United States to realize that it is no longer the only major player in the region—and, as the environment becomes increasingly competitive, the U.S. government will do well to take advantage of the bridge Latin America is building with ASEAN nations, coming onboard before the opportunity passes.

At the end of the day, what matters most for the future of relations between Latin America and Southeast Asia is that the two sides understand one another in order to work together effectively for their mutual benefit. As that awareness grows, so too will the potential of the Pacific Alliance, the TPP, and broader interregional efforts.

To that end, there are several paths immediately available for the United States moving forward. U.S. formal admission to the Pacific Alliance as an observer state is imminent, and will firmly send the message that the Obama Administration supports regional liberalization and integration. In a similar vein, the U.S. Congress should continue to demonstrate its strong support for the ongoing TPP negotiations—and, at some point, the United States would do well to push for China’s inclusion in that group, whose importance will only grow.

Latin America and Southeast Asia are poised to grow into pivotal players in each other’s futures. So let’s get moving.

28. Mexico Aims to Boost Apparel Sector Women’s Wear Daily, July 15, 2013

MEXICO CITY — Mexico’s textiles and apparel industry expects its 2012 World Trade Organization case against China’s unfair subsidies to importers to be settled by September, industry leaders said. They also expect a Mexican-Chinese working group, set up to improve the countries’ Customs cooperation and

knowledge to counter a flood of undervalued Chinese imports to Mexico, to announce a series of actions by then. “We are looking for a very clear definition of the trade rules affecting our industries so the triangulation of subvalued products [sent from China but often with Malaysia or Vietnam origination certificates] stops,” Sergio López de la Cerda, president of apparel industry group Canaive, told WWD. His comments came after Mexican and Chinese presidents Enrique Peña Nieto and Xi Jinping signed several strategic agreements last month to bolster the nation’s trade relations. One of the agreements involved a working group comprised of Mexico and China’s economic and foreign ministries tasked to come up with a series of rules and guidelines to curtail China’s subvalued imports and widen Mexico’s access to China’s market. Experts feel Mexico has the potential to export as much as $500 million to China as a string of new value-added textile producers and fashion brands gear up to enter the Chinese market. López de la Cerda said the working group’s expected agreements and recommendations, when they are developed, should help even out the countries’ trade imbalance. In 2012, China exported $2.2 billion worth of textiles and apparel to Mexico, while Mexico exported just $150 million to China. The group’s results could come in parallel with a settlement to Mexico’s WTO dispute or without it. “If we reach an agreement before then, that would be great, but if not, the WTO suit will continue its process,” López de la Cerda said. Moisés Kalach, president of textiles lobby Canaintex, noted that the presidents charged their ministries to work to settle the WTO suit in three months. “This is a presidential mandate,” Kalach said. “We hope this will be resolved as soon as possible. Mexico is not trying to be protectionist. We just want fair commerce with China.” Meanwhile, a pact Canaive signed last fall with new Mexican President Peña Nieto to create a four-pronged strategy to improve the textile and apparel industry’s fortunes remains in place, López de la Cerda said. Two of the agreement’s goals aim to combat Mexico’s unrelenting counterfeit and contraband trade, and create a more fashion-centric country to boost domestic apparel sales and exports. Last year, López de la Cerda said a new prevalidation system that checked subvalued merchandise against a slew of reference prices was working well. That, in addition to the Peña Nieto accord, would help slash illegal clothing sales to 40 percent from 60 percent of the market by 2016, López de la Cerda predicted. However, he conceded things have not gone as well as expected. Customs raids have been weaker than hoped, and new uncertainty about how the fledgling administration will fight contraband has made that goal less realistic. “The prevalidation system is working, but not with the results we wanted,” López de la Cerda said. “We are advancing, but we are not satisfied.” As part of a sweeping financial reform due in September to build a more “inclusive Mexico,” Peña Nieto has pledged to create new jobs for informal workers, who account for 60 percent of Mexico’s active population. The World Bank defines such workers as people obtaining wages from “activities and income that are partially or fully outside government regulation, taxation and observation.” These efforts should help move people out of the illegal groups behind the undervalued Chinese imports, López de la Cerda said. “Contraband is an issue involving both exporters and importers,” he said. “We hope the government will introduce enough incentives to move people out of these illegal markets. We also hope Customs and law enforcement operations will strengthen.” Canaive’s plans to create a stronger “Made in Mexico” fashion brand by joining forces with the textile, footwear, leather goods and accessories sectors is also gaining traction, López de la Cerda added. The scheme’s first step, the creation of a fashion council, was completed in January, with López de la Cerda at its helm. López de la Cerda said the council was about to set up a 20-member technical leadership committee made up of four top fashion designers and 16 industry experts.

“The idea is for top industry executives, experts and designers to manage this committee so that the fashion culture we want to create in Mexico permeates the country as soon as possible,” López de la Cerda said. He forecast Mexico’s textiles and apparel sector will grow 3 percent this year, driven by strengthening domestic demand and exports that are predicted to climb 3 to 5 percent to $6.5 billion. Meanwhile, the local market should grow as much as 3 percent from nearly 2 percent in 2012 as consumption increases on the back of government spending. Exports will benefit from U.S. manufacturers’ ongoing production shift to Mexico as Asian manufacturing costs continue to climb. “We are once again becoming an increasingly desirable destination for U.S. brands,” López de la Cerda added. 29. Mexican Textile Industry Worried TPP Short Supply Could Undermine ROO

Inside U.S. Trade, July 3, 2013

Mexican textile producers are worried that a final "short-supply" list of textile inputs that will emerge in the Trans-Pacific Partnership (TPP) as eligible for third-country sourcing may be so expansive that it could end up eroding the strict yarn-forward rule of origin that U.S. and Mexican negotiators want to be central to regional apparel production.

In a June 28 interview, Nora Ambriz, executive director of Mexico's National Textile Industry Chamber, said that if the short-supply list is too large, it would essentially have the same outcome as a rule of origin that is less stringent than the yarn-forward rule.

Textile items on the short-supply list would be subject to a cut-and-sew rule, meaning they could originate from non-TPP countries like China, be cut and sewn into apparel within the TPP region, and be eligible for tariff cuts negotiated under the agreement.

Vietnam favors this flexible rule because it imports the vast majority of the textiles for its apparel production from China and other non-TPP countries. But the United States and Mexico favor the stricter yarn-forward rule, under which every component of an originating apparel item, starting with the yarn, would have to be produced in the TPP region.

"If Vietnam insists on a broader short-supply list, wouldn't that just be a way for it to continue pressing for more flexible rules without agreeing to the principle of yarn-forward or the short-supply mechanism as a proposal to try to find a compromise on this issue?" Ambriz said.

A Vietnamese embassy official, who spoke last month in Washington in what the embassy said was his personal capacity, said the U.S. short-supply proposal of roughly 170 items is too limited for Vietnam to accept (Inside U.S. Trade, June 21). The U.S. tabled its short-supply proposal at the May TPP round in Peru, after which Vietnam and Mexico said they would need more time to analyze it before providing a formal response (Inside U.S. Trade, May 31).

Ambriz said the Mexican textile chamber and the Mexican government support yarn-forward as the general principle for the apparel rule of origin in TPP. They believe that short supply should only be used as an exception in limited cases where it is demonstrated that sufficient supply does not exist in any of the TPP countries, not just the U.S., she said.

This is a likely reference to the fact that the initial U.S. proposal tabled in Peru was limited only to textile inputs that are not produced in the U.S. A Mexican source stressed that there may be items on the U.S. list that are made in other TPP countries with textile production such as Mexico, Peru and Malaysia.

But this source argued it does not make sense for a country like Vietnam to propose adding or subtracting items from the short-supply list when it has not accepted that yarn-forward will be the prevailing rule in TPP.

This source said one of the reasons Mexico joined TPP is to ensure that the production chains that were built up in North America over the past 20 years since the entry into force of the North American Free Trade Agreement (NAFTA) can be used to export to Asia. If Mexico were not a TPP member, goods it jointly produced with the U.S. would not have preferential access under TPP.

According to this source, Mexico's entry into TPP will also help "level the playing field" for Mexican textile producers because now Asian countries in TPP that produce textiles and apparel will have to follow labor and environmental rules with which the Mexican industry already complies.

This source emphasized that the yarn-forward rule in NAFTA has been successful in bringing investment in textile production to Mexico. Using the same rule in TPP could promote investment in textile production in Vietnam and other participating countries, and it could also boost trade in textile inputs within the TPP region, according to this source. But so far, Vietnam has not been receptive to these arguments in favor of yarn-forward, the source said.

U.S. apparel importers, who are allied with Vietnam on this issue, reject the notion that yarn-forward has worked under NAFTA and the Central American Free Trade Agreement. For instance, a May 2013 briefing presentation by the TPP Apparel Coalition cites U.S. government data showing that although U.S. textile and apparel exports initially grew under NAFTA, they have declined over the last decade.

NAFTA was negotiated at a time when world apparel and textile trade was governed by a system of quotas under the Multifiber Arrangement (MFA), making the duty-free, quota-free access that NAFTA bestowed extremely valuable.

Since the MFA expired in 2005, textiles and apparel have been traded without quota restraints, and China has emerged as a dominant supplier to the detriment of U.S. and Mexican production. In recent years, Vietnam has also emerged as a low-cost supplier that can sell competitively compared to producers in CAFTA and other FTA countries despite the tariff differential.

The apparel coalition also argued that the yarn-forward has a "dismal track record" under U.S. free trade agreements, since apparel imports under FTAs that include this rule have declined over the past 12 years while imports from other countries have grown.

30. First TTIP Round Washington Trade Daily, July 11, 2013

A full contingent of some 160 “negotiators” – including regulators – from the United States and the European Union on Friday finished up their first formal round for a TransAtlantic Trade and Investment Partnership agreement which, if successful, will create the biggest bilateral free trade zone in the world (WTD, 7/11/13).

Both sides “walked through” all the major areas for an “ambitious” end-result, exchanged initial thoughts about how to approach each one and discussed priorities and objectives for the next round in Brussels. The most important and difficult issues – both negotiators suggested – will involve market access for goods, services and foreign investment as well as a process for greater convergence of regulations between the two mature economics and how to get there.

The next round will take place in mid-October in Brussels.

The two chief negotiators – Assistant US Trade Representative for Europe and the Middle East Daniel Mullaney and EU counterpart, Ignacio Garcia-Bercero – expressed optimism at a press conference that the final product will be comprehensive and ambitious and will add to each other’s economic growth, jobs, competitiveness and greater ease of doing business.

Mr. Mullaney said there is a meeting of minds on the overarching purpose of the negotiations. He added, however, that some “architectural” issues need to be further discussed.

15 Market Access Areas

Last week negotiators identified 15 market access areas and settled on some specific approaches to negotiating them. Overall, there will be 24 working groups, but some could be expanded and others combined, said Mr. Mullaney.

On the tougher issues of rules, EU negotiator Garcia-Bercero said negotiators discussed the respective different approaches to intellectual property rights, competition policy, customs practices and the environment. The Washington meeting, he suggested, got a start on what could be the final outcome in each. Sanitary and phytosanitary issues took up considerable time this week, said Mr. Mullaney. It will continue to be a focus.

Separate – but parallel – talks began earlier in the week about information sharing, which were sparked by recent revelations over the electronic “snooping” by the National Security Agency. The two negotiators confirmed that the high-priority issues of corporate and consumer data transfer also will be on a similar parallel track.

After the meeting with the press, both chief negotiators traveled to Capitol Hill to brief members and staff.

A large delegation of European Parliament members will be in Washington this week to discuss TTIP as well as a number of other bilateral matters.

31. Exports Revive at Tirupur Business Standard, July 22, 2013

Firms confident of 15-20% growth over last year, with diversion of Bangladesh garment orders, recovery in main markets

After a sharp decline, exports from the textile town of Tirupur have bounced back. The town in west-central Tamil Nadu, 50 km from Coimbatore and 460 km from here, has reported a 10 per cent growth in order flow in the past two months. Exporters from the textile hub have told the Union minister of textiles that they will clock around Rs 15,000 crore in 2013-14, an increase of 15-20 per cent over last year. The Union ministry has already raised the annual export target to $43 billion (Rs 25,750 crore) from $36 bn (Rs 21,500 crore) last year for the apparel industry, as part of a plan to leverage the sharp rupee depreciation to lift textile exports. A Sakthivel, president, Tirupur Exporters Association, said order flow in the past two months rose 10 per cent as compared to a decline of three to five per cent during the same period last year. The industry exported garments worth Rs 12,500 crore last year. These shipments had fallen by 10-15 per cent in 2009-10 and 2010-11; in 2011-12, growth was flat, thanks to the rupee fluctuation against the dollar. In 2006-07, when the industry clocked around Rs 11,000 crore, it had set a target to reach $4 bn by 2012; however, it could reach only $2.75 bn. “We are doing well in the last three months as orders from Bangladesh (meaning those originally meant for there) are now coming to India. The US economy is showing some positive sign and the main markets of Germany and the UK in Europe have also picked up. To some extent, the foray into new markets have also helped the industry,” said Sakthivel. These markets include Japan, South Africa, Israel and South America. With these positive signs, the industry is expected to close the current financial year with export turnover of around Rs 15,000 crore, as compared to Rs 12,500 crore in 2012-13. Tirupur exporters said the free trade agreement expected to be signed soon with the European Union would help them compete with Bangladesh, which is now enjoying duty-free benefits. The other major challenge, said Sakthivel, was cost of production. A leading exporter said power cuts were affecting all units. Currently, thanks to wind energy, the town which used to see seven to eight hours of daily power cuts is breathing. “Wind energy is temporary for three to four months, after which again we will face severe power shortage. Unless the government acts fast, it will be difficult to turn these inquiries to orders,” he said. Besides, the recent increases in diesel prices is hitting the industry, said Sakthivel. To boost exports and to meet the competition, exporters have asked the government for a scheme to buy diesel at international prices from an oil marketing company. And, for concession on duty credit scrip use. The Association also says there is a big shortage of workers in meeting the rising demand. The industry has lost workers after the earlier downturns, which had resulted in units having to close.

32. Enforcement, Trade Preference and Other Activities Examined in Annual ITC Report Sandler & Travis Trade Advisory Services, Inc., July 15, 2013

The International Trade Commission released July 11 The Year in Trade 2012, its annual review of the previous year's trade-related activities. This report includes information on (a) antidumping, countervailing, safeguard, intellectual property rights infringement and section 301 investigations; (b) the operation of trade preference programs; (c) significant activities in the World Trade Organization, the Organization for Economic Cooperation and Development and the Asia-Pacific Economic Cooperation forum; (d) developments in bilateral and regional free trade agreements; (f) bilateral trade issues with major trading partners such as the European Union, Canada, China, Mexico, Japan, Korea, Taiwan, Brazil, India and Russia; and (g) U.S. trade in goods and services.

Highlights of the 2012 report include the following.

AD/CV. The ITC instituted five new preliminary AD injury investigations and completed 16 final investigations, and seven AD duty orders were issued on six products from four countries. Nine new preliminary CV injury investigations were launched and nine final investigations were completed, with two CV duty orders issued on two products from China. The ITC instituted 42 sunset reviews of existing AD and CV duty orders and suspension agreements and completed 46 reviews, resulting in 38 orders being continued for up to five additional years.

IPR Infringement. There were 127 active section 337 investigations and ancillary proceedings, 52 of which were new. In all but four of the new investigations patent infringement was the only type of unfair act alleged. Approximately 40% of active investigations involved telecommunications and computer equipment, integrated circuits, and display devices such as digital televisions.

GSP. Imports entering duty-free under the Generalized System of Preferences totaled $19.9 billion, 5.9% of total U.S. imports from GSP beneficiary countries and 0.9% of total imports from all trading partners. India was the leading GSP beneficiary, followed by Thailand, Brazil and Indonesia. Crude petroleum and new pneumatic rubber tires for motorcars were the top products entered under GSP. Argentina was suspended from GSP effective May 28, South Sudan became a beneficiary (effective April 15) and a least-developed beneficiary (effective May 28), and Senegal became eligible for least-developed beneficiary treatment (effective Sept. 3). St. Kitts and Nevis, Gibraltar, and the Turks and Caicos Islands were removed from the list of GSP beneficiaries based on high income (effective Jan. 1, 2014).

AGOA. Forty sub-Saharan African countries were designated for benefits under the African Growth and Opportunity Act and 27 were eligible for AGOA textile and apparel benefits. Duty-free U.S. imports under AGOA, including those covered by GSP, were valued at $34.7 billion. Imports under AGOA exclusive of GSP were valued at $32.9 billion, down 36.9% from 2011 largely due to a decline in the value of U.S. imports of petroleum-related products, which made up 90% of imports under AGOA in 2012. South Sudan became eligible for AGOA benefits as of Dec. 20, 2012, while Guinea-Bissau and Mali were removed as of Jan. 1, 2013.

CBERA. At the end of 2012, 16 countries and dependent territories were eligible for preferences under the Caribbean Basin Economic Recovery Act and seven were eligible for Caribbean Basin Trade Partnership Act preferences. U.S. imports under CBERA decreased by 13.3% to $3.1 billion, reflecting a decline in U.S. imports of crude petroleum, methanol, knitted apparel products, and undenatured ethyl alcohol, which are major imports from CBERA countries. Although Trinidad and Tobago remained the leading supplier of U.S. imports under CBERA, Haiti accounted for nearly all of U.S. imports of apparel entering under CBTPA. U.S. imports of apparel from Haiti totaled $730.1 million, up 4.1% from 2011, of which $423.6 million entered under CBTPA. U.S. imports of apparel entering under the Haitian Hemispheric Opportunity through Partnership Encouragement Act and the Haiti Economic Lift Program, which added special provisions to CBERA, rose by one-third to $303.4 million.

Trade with FTA Partners. Two-way merchandise trade between the U.S. and its FTA partners amounted to $1.4 trillion, or 37.7% of total U.S merchandise trade. Canada and Mexico accounted for 75% of this amount ($1 trillion), and the U.S. merchandise trade deficit with these countries fell 2.4% to $181.0 billion. U.S. merchandise trade with other FTA partners increased 4.4% to $228.8 billion and the U.S. registered a $23.3 billion surplus in such trade with these 15 partners, up 24.6% from 2011. The completion of FTAs with Korea, Colombia and Panama added an additional $110.3 billion (8.8%) to trade with FTA partners. Imports entered under FTA provisions were valued at $393.7 billion, accounting for 17.5% of total U.S. imports.

WTO Dispute Settlement. Of the 27 new requests for dispute settlement consultations filed with the WTO, the U.S. was involved in five as the complainant and six as the respondent. There were 11 new dispute panels established, including three at the request of the U.S. against China and two by China against the U.S.

Safeguards. The ITC conducted no new safeguard investigations and the last remaining safeguard measure in effect, on passenger vehicle and light truck tires from China, expired in September.

Section 301. One section 301 case, concerning the EU ban on hormone-treated beef, remained ongoing and no new section 301 petitions were filed.

Trade Deficit. The annual U.S. trade deficit decreased from $560.0 billion to $540.0 billion, largely on a rise in the services surplus from $178.5 billion to a record $195.8 billion.

33. Peruvian Textile Exports Can Spur Trade with US: Envoy Fibre2Fashion, July 12, 2013

If textile exports pick up pace, it can spur trade between Peru and the United States in the coming years, U.S. Ambassador in Lima, Rose M. Likins has said.

Speaking at the Peru-United States Forum, organized by the American Chamber of Commerce of Peru (AmCham Peru), Ms. Likins said trade between Peru and the US has more than doubled since the Peru-US free trade agreement (FTA) was signed in 2008.

She said the bilateral trade between Peru and the US was around US$ 16 billion in 2012, and it is expected to grow to US$ 16.5 billion in 2013.

She added that the trade could further grow in the coming years if textile exports pick up, Peruvian news agency andina reported.

Textiles, including garments, have been a major component of Peruvian exports to the US, and trade would rise if there is a recovery in this sector, Ms. Likins said.

In 2012, the US imported US$ 642.585 million worth of textiles and apparel from Peru, compared to imports of US$ 743.427 million made in 2011.

During the first five months of 2013, the US imported US$ 272.776 million worth of textiles and clothing from Peru, according to the Major Shippers Data from the Office of Textiles and Apparel (OTEXA), U.S. Department of Commerce 34. Asian Garment Industry to Undergo Further Segmentation

China Daily, July 7, 2013

By Liu Xiaozhuo (chinadaily.com.cn) in the next three to four years as competition becomes more intense, experts said. China, Thailand and Vietnam will mainly produce high-end clothing, while Bangladesh, Laos, Burma and Cambodia will mainly produce low-end clothing.

At present, the majority of garments within the global marketplace are produced in Asia. Between 2005 and 2011, Vietnam's garment export increased by 32 percent and China's increased by 15 percent. Percentage number increases for India, Turkey, Malaysia and Thailand were at about 7 percent, according to data from the Vietnam Textile & Apparel Association (VITAS).

Statistics from the Thai Garment Manufacturers Association (TGMA) have revealed that garment exports from China account for 35 percent of the world's garment export business. Bangladesh, India, Pakistan and Sri Lanka occupy 16 percent to 18 percent of the global market. For Southeast Asian countries the numbers range from 10 to 12 percent.

As start-up capital is not high and Asia has plenty of cheap labor, the garment manufacturing and textile industry play important roles in the economic development of many of Asian countries while also having a significant effect on people's interests.

Lu Qijian, secretary-general of the Garment Manufacturers Association in Cambodia said that Cambodia's garment and textile exports make up more than 80 percent of the country's gross export business. Its contribution to the nation's GDP accounts for 15 percent to 18 percent. The garment export income of Bangladesh makes up about 78 percent of the country's annual foreign exchange income.

Though the garment industry in southern and Southeast Asian countries is booming, its development still faces limitation challenges. One major problem has been the rise in labor costs.

Cheap labor has always been an advantage of the Asian textile and garment industry as it is more evident in South Asian countries. But in recent years, labor costs have been rising. Minimum wage in Vietnam has gone up by 20 percent, and Indonesia and Laos are at 20 percent and 22 percent this year. The average monthly salary for a Cambodian is almost 100 dollars, which leads to labor shortage issues.

In addition to labor, investors also have to deal with low productivity and bad product quality concerns. Moreover, it has been hard to raise Southeast Asia's garment industry net value because it is too dependent on raw material imports.

A general manager of a Thailand textile company said that at present only Thailand can carry out production of all the domains within the garment industry. Cambodia and Bangladesh are lacking in raw materials and can only produce ready-to-wear apparel.

According to Vietnamese media, 11.8 percent of the fabric needed by the Vietnam garment industry is produced domestically. Most high-end fabric is imported. In 2012, Cambodia imported from the Chinese mainland, Taiwan, Thailand, Japan and South Korea raw materials worth $3.12 billion.

Compared to China, Southeast Asian countries and South Asian countries have more labor advantages. Therefore, some Chinese low-end garment manufacturers are moving there. Lu Qijian said that the high-end garment industry still thrives in China because China has advanced technology and high-end skills.

Have you recently been featured “In the News”? Please send member news stories to elevy@ncto.org

Cass Johnson President National Council of Textile Organizations (NCTO) 1001 Connecticut Ave NW, Ste 315 Washington, DC 20036 p: 202-822-8025 / f: 202-822-8029 cjohnson@ncto.org www.ncto.org

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