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Industry Stoked Over House Passage of USMCA, Urges Senate to Quickly Follow

From textile to retail, the U.S. apparel industry praised the House of Representative’s passage of the U.S.-Mexico-Canada Agreement (USMCA) on Thursday.

The USMCA was negotiated by the three countries as a remake of the North American Free Trade Agreement (NAFTA) and not only did it have the rare backing of importers and domestic manufacturers, but also bipartisan political backing, with a vote of 385 to 41. It was notably passed in the House the day after the chamber passed articles of impeachment against President Trump, who pushed for USMCA.

The National Retail Federation (NRF) called on the Senate to immediately take action and send it to Trump for him to sign.

“This agreement provides significant updates to the North American Free Trade Agreement, which has benefited U.S. retailers, workers and consumers for a quarter-century,” David French, senior vice president for government relations at NRF, said. “These modernized provisions will help ensure that North American trade policy reflects today’s global economy and will continue to benefit the U.S. economy. USMCA is a meaningful trade victory that will provide benefits for decades to come.”

NRF has supported the administration’s efforts to modernize NAFTA, French said, citing provisions on digital trade, customs procedures and trade facilitation as key improvements in the new agreement.

“Final passage of USMCA is key to providing continued growth for U.S. companies that rely on the North American market for goods and services,” French added. “It also guarantees that American families can continue to find the products they need at prices they can afford. We look forward to seeing USMCA enacted in the new year.”

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The American Apparel & Footwear Association (AAFA) cited USMCA as vital to strengthening North American supply chains that support hundreds of thousands of American jobs.

“Special thanks to the U.S. Trade Representative’s office and the House leadership for their work to move this legislation forward,” Rick Helfenbein, president and CEO of the AAFA, said. “We now encourage the Senate to quickly put this agreement up for vote and ensure a seamless transition from NAFTA.”

Mexico and Canada represents the two largest export markets for the American textile industry at nearly $12 billion last year, said Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), representing the full spectrum of U.S. textiles from fiber though finished sewn products.

“Several provisions in USMCA will help producers expand and build new business in the critical Western Hemisphere supply chain,” she said.

NCTO worked with the administration during negotiations on USMCA and successfully lobbied for several provisions and improvements that were subsequently incorporated in the trade deal that will close loopholes and strengthen U.S. Customs enforcement.

“We expect U.S. textile companies to export more to the region and invest more in the U.S. when USMCA is implemented,” Glas said. “Textile executives from North Carolina to New York have said they will seek to take advantage of the modifications in the trade deal and build new business in areas such as pocketing and sewing thread, as a result of stronger rules of origin and Customs enforcement.”

The USMCA makes significant improvements to NAFTA, NCTO noted. They include creation of a separate chapter for textiles and apparel rules of origin with strong customs enforcement language and stronger rules of origin for sewing thread, pocketing, narrow elastics and certain coated fabrics.  Under the current NAFTA, these items can be sourced from outside the region, while USMCA fixes this loophole and ensures these secondary components are originating to the region.

In addition, USMCA fixes the Kissell Amendment “Buy American” loophole, ensuring that a significant amount the Department of Homeland Security spends annually on clothing and textiles for the Transportation Security Administration is spent on domestically produced products.