AAFA urges negotiators to preserve TPLs in NAFTA

The American Apparel & Footwear Association (AAFA), an alliance of ten business groups representing firms from across the Canadian, Mexican and US textile and apparel supply chain, has urged the North American Free Trade Agreement (NAFTA) negotiators to preserve tariff preference levels (TPLs) during talks as these help keep operations competitive.

Retaining the size and scope of the TPLs is essential to ensure that supply chains and the North American jobs they support are not harmed, the association said in a letter addressed to the lead trade representatives from the three nations.

TPLs are special NAFTA provisions allowing customs duty at a preferential rate to non-originating goods, i.e., goods not obtained or produced in the three NAFTA countries, up to a specified quantity.

AAFA urged negotiators to fully retain TPLs as these maximize the ability to use North American content in manufacturers’ global supply chains.

NAFTA originally included permanent provisions that gave each trading partner the ability to supplement strict yarn forward rules, which means the yarn used to form the fabric must originate in a NAFTA country, with limited amounts of non-originating input.

That provision allowed North American supply chains to complement originating input purchases, support manufacturing operations in all three countries, and continue using NAFTA despite the worldwide sourcing options available, AAFA feels.

US trade representative Robert Lighthizer, Canadian foreign affairs minister Chrystia Freeland and Mexican secretary of the economy Ildefonso Guajardo lead the respective teams.

The first round of talks on updating the NAFTA, which came into effect on January 1, 1994, was scheduled in Washington from August 16 to 20 and the second round was convened in Mexico from September 1 to 5.

The teams will meet in Canada in late September and return to the United States in October, with additional rounds being planned for the remainder of the year. (DS)

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