The map of world trade is being hurriedly redrawn by a bevy of massive regional trade agreements, potentially redefining the rules that govern international commerce. And future changes could usher in tectonic shifts in global free trade, collectively harmonizing regulatory regimes, streamlining supply chains, consolidating regional industries and eliminating gratuitous barriers to international competition.
On Thursday, January 23, Texworld USA provided its attendees with an opportunity to see a sweeping snapshot of the state of global trade, especially as it specifically applies to the textile and apparel industries. Gail Strickler, U.S. Trade Representative Assistant for Textiles and Apparel, gave a presentation titled, “Update on Trade Policy and U.S. Trade Negotiations,” a information-rich session that provided a comprehensive overview of both existing and pending trade negotiations.
Strickler was introduced by Tricia Carey, U.S. Merchandising Manager for Lenzing Fibers Inc. Carey emphasized that Strickler is a familiar fixture in the apparel and textile world with more than thirty years of experience, and an advocate well equipped with a considerable storehouse of insider knowledge. Prior to her government appointment, she worked for Saxon Textile Corp. from 1980 to 2007, eventually becoming the company’s president and CEO until it was acquired by Patriarch Group and became a division of Duro Textile LLC, where she also served as vice president of the Global Apparel Division.
Strickler has also sharpened her understanding of apparel and textile commerce in higher education. She was the associate director of the Institute for Textile and Apparel Product Safety at Philadelphia University, where she was responsible for supervising textile research and development programs, and also developed sustainability and environmental strategy programs for both brands and retailers.
The global trade scene is a complex, diffuse one and Strickler’s overview was a clinic in clear synopsis. Her presentation was divided into three main parts: preferential programs, existing free trade agreements (FTA) and pending negotiations, the principal focus of her discussion.
Quick to outline the stakes of global trade, Strickler pointed out that 42 percent of all U.S. tariffs are collected from apparel and textile products, though the industry as a whole accounts for a much smaller portion of overall U.S. commerce. She pointed out that the U.S. has extraordinary significance as a sovereign player on the field of international trade, not just because of its manufacturing and exports, but also because of its massive consumption power.
And the ramifications of global trade transcend purely economic issues, bearing upon the lives of families struggling to lift themselves out of poverty in low-wage, high unemployment countries. Strickler pointed out that women in the developing world, who comprise the bulk of the labor force in the apparel and textile factories, rely upon these positions to construct a fence between their children and starvation. In fact, the children of employed mothers are 80 percent less likely to be malnourished. Sometimes, the consequences of trade policy have life and death significance.
While the mainstream press largely focuses on major trade deals like the Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (T-TIP), there is a bevy of others of great importance, and quite a few preferential programs as well. These program are largely unilaterally directed and establish duty-free and sometimes quota-free access to U.S. markets for a specific industry or subset of products. Among these, she discussed the African Growth and Opportunity Act, Andean Trade Promotion and Eradication Act, Caribbean Basin Trade Partnership Act, and the Haitian Hemispheric Opportunity Through Partnership Encouragement Act. Strickler treated the audience to quick but incisive analysis of each, detailing the pertinent stakes, unfurling their complex legislative histories. This section of her presentation was an edifying lesson in the sometimes torturously complex contours of trade negotiation.
The fulcrum of Strickler’s presentation, however, was her comments on the outstanding negotiations for the TPP and the T-TIP. She began discussing the TPP which has been both a tinderbox of controversy and a lighting rod of enthusiastic hope ever since negotiations begun. The participating nations are the U.S., Vietnam, Singapore, Australia, Peru, Brunei, New Zealand, Chile, Malaysia, Mexico, Canada and Japan. And the opportunities, as well as risks, are unusually high. The eleven countries involved in the negotiations sent $15.1 billion worth of apparel and textile imports to the U.S. last year.
According to Strickler, the historic uniqueness of the TPP is, in part, its inclusiveness. It encompasses twelve very different nations, each with its own idiosyncratic economic needs and cultural perspectives. Also, the agreement is designed specifically to recruit additional countries in the future, progressively avalanching into a wider assemblage of free trade partners. Also, the TPP prioritizes some non-traditional trade issues, like labor conditions and environmental sustainability. At the heart of the FTA is the desire to broker more regional integration, dismantle business-stymieing trade obstacles and to streamline regulatory process.
While the TPP was originally expected to reach a settlement before the conclusion of 2013, Strickler believes the process is soon to find a compromise. She reminded the audience of the mountain of issues that an international agreement of such breadth must attend to: she is responsible for figuring out the trade status of more than 1,605 different products. Nevertheless, she expressed confidence that the TPP would reach an agreement early this year.
One of the highlights of Strickler’s presentation was her adumbration of the U.S.’s trade advantages, especially with respect to yarn production. With the rising costs in Asia, the U.S. is well positioned to make huge competitive strides. In the last several months, $753 million have poured into the U.S. markets in the form of investments in yarn spinning. And the changing face of yarn-forward rules will only increase the U.S.’s already impressive strategic footing.
Strickler also discussed T-TIP, a historically important free trade agreement between the U.S. and the E.U. Launched in the summer of 2013, T-TIP is designed to vitalize competitiveness and catalyze growth, potentially creating thirteen million jobs across the two colossal trade blocs. At the heart of T-TIP is regulatory harmonization, a grand consolidation of rules often needlessly disparate. Like the TPP, the T-TIP will greatly impact the prevailing rules of origin and, as a consequence, have a lasting imprint on the apparel and textile industries in the U.S.
Strickler’s assessment of global trade, full of analytical detail and perspective, was invaluable to anyone who does business in either the apparel or textile sectors. It was a testament to Texworld USA’s abiding commitment to educating its attendees.