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US Seeks Duty-Free Status for Apparel and Textiles in EU Trade Agreement

The U.S. wants comprehensive duty free treatment for textiles and apparel products as part of its proposed trade agreement with the European Union.

The Office of the U.S. Trade Representative (USTR) said the U.S. could pursue negotiations with the EU in stages, based on consultations with Congress. Among its 24 negotiating objectives is increased transparency in import and export licensing procedures and better monitoring and action against import and export monopolies to prevent trade distortions. It also wants expanded market access for exports for re-manufactured or partially assembled goods and improved regulatory compatibility to facilitate exports.

U.S. Trade Representative Robert Lighthizer notified Congress in October that the Trump Administration intends to negotiate three separate trade agreements with the EU, U.K. and Japan. Under trade promotion authority regulations, USTR is required to publish objectives for the negotiations at least 30 days before formal trade negotiations begin.

The U.S.-EU agreement should develop rules of origin that ensure that preferential benefits go to products “genuinely made in the United States and the EU,” and that rules of origin “incentivize production” in the U.S. and EU. It should also “establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles,” USTR said.

In the area of customs and trade facilitation, the U.S. will aim to build mechanisms to ensure shipments are released quickly after determining compliance with applicable laws and regulations. In addition, objectives in this area include providing for streamlined and expedited customs treatment for express delivery shipments, simplified customs procedures for low-value goods and a more reciprocal de minimis shipment value–the minimum value for goods that can enter the country duty-free–all generally aimed at promoting cross-border e-commerce.

USTR’s notification also outlines specific objectives to ensure the EU doesn’t manipulate exchange rates to prevent effective balance of payments adjustment or to gain an unfair competitive advantage. The U.S. also wants to create a mechanism to take appropriate action if the EU negotiates a free trade agreement with a non-market country, such as China. Additionally, the U.S. wants to strength existing procedures and create new ones to address antidumping and countervailing duty evasion.

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Intellectual property rights, labor, dispute settlement, subsidies and the environment, will also be areas of focus for the agreement.

U.S. goods and services trade with the EU totaled nearly $1.2 trillion in 2017. Exports reached $527 billion and imports were $627 billion. The U.S. goods and services trade deficit with the EU was $100 billion in 2017.