Achieving 21st Century Terms of Trade for Apparel and Footwear in the TPP. Steve Lamar Executive VP Vietnam TPP Stakeholders Briefing June 2011
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1 Achieving 21st Century Terms of Trade for Apparel and Footwear in the TPP Steve Lamar Executive VP Vietnam TPP Stakeholders Briefing June 2011
2 The US Market US consumers spent $338.1 billion buying clothes and shoes in Americans purchased an estimated 20.5 billion garments and 2.3 billion pairs of shoes in That means that every man, woman, and child in the United States, on average, spent over $1,100 each to buy an average of 68 new garments and 8 pairs of shoes in 2010.
3 U.S. Apparel Imports 50% of U.S. market in 1991 Millions of Garments 25,000 20,000 15,000 10,000 5, % of U.S. market today 98% 50% US Imports US Production
4 Top 5 Apparel Suppliers to U.S Today Taiwan China (42%) Hong Kong Vietnam (8%) Korea Bangladesh (6%) China Honduras (5%) Philippines Indonesia (5%)
5 U.S. Footwear Imports 53% of US market in ,500,000 99% of US market today 99% Thousands of Pairs 2,000,000 1,500,000 1,000, , % US Imports US Production
6 Top 5 Footwear Suppliers to U.S Today Taiwan China (88%) Italy Vietnam (5%) Korea Indonesia (2%) Brazil Brazil (1%) Hong Kong Italy (1%)
7 TPP Opportunities New FTAs between US and four Asian countries. Brunei Malaysia New Zealand Vietnam Improve and strengthen partnerships with existing US FTA partners Australia Chile Peru Singapore Expand Regional Links Improve Customs Procedures Lay Foundation for Simple and Harmonized Rules
8 Average Duty Paid on US Imports of Apparel from Top 10 Apparel Countries % 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% China Vietnam Indonesia Bangladesh Mexico India Honduras Cambodia El Salvador Pakistan Source: USITC
9 Average Duty Paid on US Imports of Footwear from Top 10 Footwear Countries % 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% China Vietnam Italy Indonesia Brazil Mexico India Dominican Rep Thailand Spain Source: USITC
10 Distribution of Duties Paid by Vietnam During 2010 Travel Goods Footw ear Knit Apparel Woven Apparel Source: USITC Total Duties: $1.33 billion
11 Distribution of Malaysia Duties in 2010 Electrical and Electronic Machinery Knit Apparel Woven Apparel Total Duties: $185 million Source: USITC
12 TPP Apparel Coalition
13 TPP Apparel Coalition Key Goals We support the negotiation of a 21st Century TPP agreement, which offers a potential growth platform for economic integration, trade and investment that could provide tremendous new opportunities for our members to buy and sell goods and services, to sustain and grow well paying U.S. jobs and to provide high value add for the US and TPP economies.
14 TPP Apparel Coalition Objectives No separate textile and apparel chapter. Liberalize and simplify the Rules of Origin. Immediate and reciprocal duty-free treatment for all qualifying products. Harmonize and streamline customs procedures. Harmonize the other rules and regulations such as product safety and labeling among all TPP countries. Strengthen intellectual property rights (IPR) protections among all TPP countries. Create a "living" agreement that welcomes additional parties and can evolve to address new textile and apparel issues as they arise.
15 Key Apparel Features in US TPP FTAs Date Basic ROO Duty Free TPL TPL Feature Australia 1/1/2005 Yarn Forward 15 year phase out No Chile 1/1/2004 Yarn Forward Immediate Yes Permanent, 10 year drop down Peru 2/1/2009 Yarn Forward Immediate No Singapore 1/1/2004 Yarn Forward Immediate Yes Temporary, declining, duty free phased in.
16 Percent US Apparel Import Growth of 4 TPP FTAs % % % % 50.00% 0.00% Australia Singapore Chile Peru 50.00% % % Years After Implementation Source: US Commerce Dept, data based on SMEs
17 TPP Footwear Associations
18 Key Footwear Features in US TPP FTAs Date Regular ROO Regular Tariff Schedule Sensitive ROO Sensitive Tariff Schedule Australia 1/1/2005 Tariff shift plus value added. Immediate Tariff shift plus higher value added. No 3 rd country uppers. 10 year linear phase out. Chile 1/1/2004 Tariff shift plus value added. Immediate Tariff shift plus higher value added. No 3 rd country uppers. 10 year phase out begins in year 8. Peru 2/1/2009 Tariff shift plus value added. Immediate Tariff shift plus higher value added. No 3 rd country uppers. 10 year linear phase out. Singapore 1/1/2004 Tariff shift plus value added. Formula approach with immediate, 4 year, 8 year, and 10 year phase outs. Tariff shift plus higher value added. No 3 rd country uppers. Formula approach with immediate, 4 year, 8 year, and 10 year phase outs.
19 THANK YOU! Steve Lamar Executive Vice President
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