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AAFA Begs USTR to Trash Trump’s Tariffs

Let the lobbying begin.

A day after Katherine Tai was confirmed by the Senate as the new United States Trade Representative (USTR), American Apparel & Footwear Association president and CEO Steve Lamar sent her a letter requesting a meeting and detailing the “list of pressing trade matters that impact our members, and the workers they employ and consumers they serve.”

Topping the list were tariffs. Lamar wrote that the punitive tariffs resulting from the Section 301 investigation initiated by the Trump administration on China “have emerged as a huge cost burden with severe consequences,” resulting “in price increases for American consumers, American job losses, and other irreversible economic damage to the U.S.”

“We do not believe these tariffs align with the worker-centric trade policy agenda of the Biden Administration,” he said. “While we urge the swift removal of all punitive tariffs, we understand that a thorough China policy review is underway. In the meantime, given the urgency of this matter and the fact that we continue to weather the adverse economic and health effects of the global Covid-19 pandemic, we are requesting the elimination of tariffs on reusable surgical and isolation gowns and medical scrubs, the retroactive extension for product exclusions that expired in 2020, and the implementation of a new, more transparent product exclusion process.”

Next on Lamar’s agenda were two critical trade preference programs–the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB)–that lapsed at the end of 2020, eliminating duty breaks on a range of products.

Lamar said the GSP and MTB programs have been supported for decades by overwhelming bipartisan majorities and he asked that Tai “convey your support to Congress for the swift reauthorization and retroactive renewal of both programs to minimize the damage as much as possible.”

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Turning to another important trade preference program, the African Growth and Opportunity Act (AGOA), Lamar said even though its expiration date is 2025, U.S. investment in the region already faces mounting uncertainty.

“Companies are poised to diversify out of China, with Africa being a logical geographic region for reinvestment for many,” he said. “The on-again, off-again nature of the program before the 10-year renewal has proven extremely disruptive, ultimately preventing the industry from taking full advantage of the first 15 years of the program. The certainty gained from renewing AGOA this year for another 10 years would give companies clarity on the timeframe they need to develop a vertical, responsible, and competitive industry in Africa up to and past 2025.”

As for future trade pacts, Lamar said AAFA supports the ongoing negotiations with the U.K. and Kenya and the U.S. joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) “at the earliest possible moment.”

Closer to home, Lamar said “as companies move away from China, the Western Hemisphere should be a logical region to diversify their supply chains.”

“Unfortunately, trade in the region is underutilized due to strict rules of origin (ROO) in the CAFTA-DR agreement,” he wrote. “There are several ways to create jobs in the region and strengthen our ties with critical partners. We look forward to working with your office and Congress to identify ways to grow trade and increase the competitiveness of the region.”

Bringing up labor rights, including forced labor, Lamar said AAFA has been an advocate for strong labor provisions in U.S. trade agreements and preference programs, as well as smart enforcement of those provisions. He said “our industry does not tolerate forced labor in our supply chains…from our over decade-long efforts with the Cotton Campaign to end forced labor in Uzbekistan and our actions to protect migrant workers through the AAFA/FLA Commitment to Responsible Recruitment to our efforts today on the Uyghur issue.”

“We look forward to working with you to improve labor rights, improve enforcement and prevent forced labor through U.S. trade policy,” he said.

Lastly, Lamar urged Tai to fill the chief innovation and intellectual property negotiator position created by the Trade Facilitation and Trade Enforcement Act.

“As you begin to conduct trade negotiations and enforce trade agreements related to U.S. intellectual property, this role has a critical part to play,” he added. “Filling this position with skilled talent will ensure that the U.S. is best positioned to advance its trade interests related to intellectual property. Moreover, it will be necessary for the chief innovation and intellectual property negotiator to take appropriate actions to address acts, policies and practices of foreign governments that have a significant adverse impact on the value of American innovation.”