SCLC/ECC Spring 2007 Meeting International Trade Update Stephen Lamar Exec. Vice President

© Copyright AAFA. All rights reserved. 2007

SCLC/ECC Spring 2007 Meeting

International Trade Update

Stephen LamarExec. Vice PresidentAmerican Apparel & Footwear Association


Elections

• Elections were NOT about Trade– General dissatisfaction on economy (incl. trade)– Trade dominant in several elections

• But Trade very much affected by Elections– New Congress MUCH more protectionist

• Freshmen Dems• GOP no longer whipping from leadership

– Trade not a priority– Pro Trade Democrats (New Dem, Blue Dog) – Chairmen Rangel and Baucus will be key


How did we fare in 2006?

Two FTAs – Oman and Bahrain Staggered CAFTA-DR Implementation Trade Preference Programs

Haiti AGOA Andean GSP

Vietnam WTO Accession Misc. Tariff Bills Port Security No Schumer/Graham Burma Sanctions Renewal (3-year)


Trade Agenda for 2007• Trade/Labor

– Pending FTAs • Peru• Colombia• Korea • Panama

– Trade Promotion Authority (TPA)

• China/Enforcement• Preference Programs

– Andean– LDC– GSP– CBTPA

• Doha Round

• TAA

• CAFTA-DR Implementation

• Vietnam Monitoring

• Preference Program Implementation

• Affordable Footwear Initiative

• Pakistan ROZ

• Annual Burma Sanctions Renewal


Trade/Labor• Integral part of a Democrat trade agenda

– A New Trade Policy For America

• Three key labor concepts:– Internationally recognized labor rights

– No derogation

– Equally enforceable

• Hidden agenda– Will big labor really support trade?

– Big issues over whether this changes US labor laws

– New Anti-Sweatshop push?


• Israel• NAFTA• Jordan• Chile• Singapore• Australia• Morocco

Current and Future U.S. Free Trade Agreements

• CAFTA-DR*

• Bahrain• Oman• Peru• Colombia• Panama

• South Korea• Malaysia• FTAA• ASEAN• Middle East

In force Under negotiation Stalled/DowngradedPending Regional Initiatives Potential

• Ecuador• SACU• UAE• Thailand• Japan

*El Salvador, Honduras, Nicaragua, Guatemala, and DR only.

Note: Peru, Colombia and Ecuador may be merged.

Note: Oman approved by Congress but not yet entered into force.


FTA Issues• Peru and Colombia

– Labor rights concerns– Environmental concerns in Peru– Human Rights concerns in Colombia– Andean expiration

• Panama– Labor rights– Canal project

• South Korea– Big agreement; huge priority– Controversy

• Beef• Autos


Doha Round• Launched Nov 2002

– Development agenda

• Faltered July 2006• Key issues

– Agricultural issues• Subsidies• Market Access

– Developing countries

– NAMA• Textile mischief


Trade Promotion Authority

• Ability of President to negotiate trade agreements– Congressional power of attorney

• Up or Down Vote

• Consultation

• Expires June 30, 2007

• No more FTAs or Doha Round until renewed.


CAFTA-DR Status and Issues

• El Salvador, Honduras, Nicaragua, DR, & Guatemala Have Implemented

• Costa Rica Joining 1st Quarter 2008?• Cumulation Deal• Pocketing Deal• DR Trousers• Sock Safeguard?• Nicaragua TPL• Retroactivity• Regulations Published


U.S. Apparel Imports from DR-CAFTA Region

Actual U.S. Imports(In Billions of Square Meter Equivalent - SMEs)

2.5

3.0

3.5

4.0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: OTEXA, U.S. Commerce Department.Source: OTEXA, U.S. Commerce Department.


CAFTA-DR: Positive Signs

• Investments Up

• Nicaragua Apparel Imports Up

• CAFTA Apparel Import Decline Flattening

• US Yarn Exports Up

• Individual Product Growth– Dresses 40 percent– PJs 167 percent


What to Do About China?- Huge budget deficit- Vocal and active “blame China” crowd- China Concerns:

- Labor/human rights- IPR Issues (WTO)- Currency- Subsidies (WTO)

-Politically popular to use trade remedies/safeguards- CVD Issues

- Expect China legislation- Wrapped up in “enforcement” debate


A few words on Vietnam

• WTO Accession – January 11, 2007– Quota free on January 11, 2007

• Vietnam PNTR Approved• Anti Subsidy Safeguard

– Expires January 10, 2008 (July 10, 2009)• Dole/Graham commitment

– Monitoring– Review every 6 months– Earliest liability for AD duties – mid-August 2006– Expires January 20, 2009– Electoral Mischief?– Precedent for China?


For the rest of the Bush Administration…

• June 30, 2007 – Expiration of TPA• June 30, 2007 – Expiration of ATPDEA• December 31, 2007 – Expiration of TAA

• January 10, 2008 – Expiration of Vietnam safeguard• September 30, 2008 – Expiration of CBTPA• December 31, 2008 – Expiration of China agreement• December 31, 2008 – Expiration of GSP

• January 20, 2009 – Expiration of Vietnam monitoring


Final thought

Source of duties collected by US Treasury

54%

46%

All other goods

Textile, Apparel, andFootwear


Final thought

Source of U.S. imports

94%

6%

All other goods

Textile, Apparel, andFootwear


American Apparel and Footwear Association

1601 N. Kent Street, 12th Floor

Arlington, VA 22209

703-797-9041

[email protected]

www.apparelandfootwear.org

Thank You

Documents

SCLC/ECC Spring 2007 Meeting International Trade Update Stephen Lamar Exec. Vice President