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TPP – The Devil Is In The Details

By Andy Warlick
Gastonia, N.C.
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The National Cotton Council holds the position that the Trans Pacific Partnership (TPP) agreement should include rules that will not undermine the substantial volume of trade the United States has built with other Western Hemisphere countries.

What is the Trans Pacific Partnership?

The TPP is an ambitious trade negotiation that includes the United States, Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, with Japan in the process of joining. The Obama Ad-ministration places a high priority on concluding the partnership in hopes of enhancing trade and investment among member countries. During the recently-concluded 16th round of TPP negotiations, the partner countries agreed on an accelerated track toward conclusion of a “next-generation, comprehensive agreement.”

What are the NCC’s main concerns?

U.S. exports of raw cotton, cottonseed and cottonseed products would be largely unaffected whether or not there is a TPP. However, the primary area of concern, as is often the case in these types of negotiations, is trade in textiles and apparel. The U.S. cotton industry supports a yarn-forward rule-of-origin, which essentially means that in order to qualify for preferential access, the yarn production and subsequent processing must occur in a TPP country. Unfortunately, Vietnam, which now is the second largest supplier of textiles and apparel to the United States, wants rules that would undermine the U.S. textile industry. They are asking for rules that basically would provide Vietnam’s state-owned apparel manufacturers with direct access to China’s massive state-run textile enterprises to create apparel and other products that would then be duty-free into all other TPP countries – something never imagined in any previous free trade agreements (FTAs).

What is being done?

The NCC is a member of a global coalition of fiber, textile and apparel groups – Textile and Apparel Alliance for TPP (TAAT) – that represents nearly two million agricultural and manufacturing workers from 30 countries and a supply chain that exports $25 billion in two-way textile and apparel trade each year. The NCC is working closely with the National Council of Textile Organizations to convey our support for effective textile rules that will protect the domestic demand base for U.S. cotton. If a more lenient rule is included in the TPP, it will undermine $25 billion in annual trade that U.S. textile manufacturers have built with our FTA partners in Central and South America based on the existing FTAs (NAFTA, CAFTA) and the Andean Trade Preferences Act. We believe an effective TPP can be negotiated without provisions that cause the loss of good paying jobs in the U.S. textile industry – still a very important customer of U.S. cotton farmers. TPP negotiations will continue to be monitored, including the 17th round in Lima, Peru, in May, and any concerns will be conveyed to the Obama Administration.

Andy Warlick is a Gastonia, N.C., textile manufacturer and a National Cotton Council of America vice president. He and other NCC leaders contribute columns on this Cotton Farming page.

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