Ten business groups – representing companies from across the textile and apparel supply chain in Canada, the US, and Mexico – have urged negotiators to preserve Tariff Preference Levels (TPLs) in the NAFTA negotiations.
Ahead of the third round of discussions to renegotiate the North American Free Trade Agreement (NAFTA), which got underway at the weekend, the groups said TPLs "help keep NAFTA operations competitive" despite the proliferation of sourcing options worldwide.
A letter to the lead negotiators – US Trade Representative Robert Lighthizer, Canadian Foreign Affairs Minister Chrystia Freeland, and Mexican Secretary of the Economy Ildefonso Guajardo – urged the retention of the existing Tariff Preference Levels (TPLs), describing them as "a key flexibility that maximises the ability to use North American content in our members' global supply chains."
The TPLs provide duty-free access for specified quantities of yarns, fabrics, apparel and made-up textile goods from non-NAFTA countries, but that are subject to significant processing in one or more NAFTA countries. The TPLs are agreed upon annual levels that vary by product.
"When originally negotiated, NAFTA included innovative and permanent provisions that gave each trading partner the ability to supplement strict yarn forward rules with limited amounts of non-originating input," the letter explains.
"Such flexibilities are especially important given how quickly changes manifest themselves in the fashion industry. Permanence is vital to giving companies the predictability to make long-term investments in sourcing and manufacturing.
"As a result, many of today's North American supply chains rely on these provisions to complement originating input purchases, to support manufacturing operations in all three countries, to provide their customers affordable fashions, and to continue using NAFTA despite the proliferation of sourcing options worldwide.
"Key to that goal is our strongly shared view that the existing Tariff Preference Levels (TPLs)…be fully retained.
"In short, TPLs help keep NAFTA operations competitive. Retaining, at a minimum, the size and scope of the TPLs is essential to ensuring that these supply chains, and the North American jobs they support, are not harmed."
The ten groups – the American Apparel & Footwear Association, Cámara Nacional de la Industria del Vestido, Canadian Apparel Federation, Council of Fashion Designers of America, National Retail Federation, Outdoor Industry Association, Promotional Products Association, International Retail Council of Canada, Retail Industry Leaders Association, and the US Fashion Industry Association – also say they support "a modernised NAFTA that will lead to more job creation and commercial opportunities within and among our three countries."
For a more detailed look at key issues for textile and apparel supply chains in the NAFTA renegotiation, click on the following link: