Suite 500 1717 Pennsylvania Avenue, N.W. Washington, D.C. 20006-4623 U.S.A. (202) 289-1313 Fax (202) 289-1330 www.btlaw.com David M. Spooner Partner (202) 371-6377 David.Spooner@btlaw.com January 15, 2019 The Honorable Edward Gresser Chair of the Trade Policy Staff Committee, Office of the United States Trade Representative 600 17th Street, N.W. Washington, DC 20508 RE: Public Comments Concerning a U.S.-United Kingdom Trade Agreement: Request for Comments on Negotiating Objectives for a U.S.-United Kingdom Trade Agreement [Docket Number USTR-2018-0036] Dear Mr. Gresser: On behalf of the U.S. Fashion Industry Association (USFIA), and pursuant to the scheduling notice published by the Office of the U.S. Trade Representative (USTR) in the Federal Register, 1 please find attached the USFIA s comments on the negotiating objectives of a U.S. United Kingdom trade agreement. The deadline for submission of pre-hearing statements is January 15, 2019. Thus, this submission is timely filed. 1 Request for Comments on Negotiating Objectives for a U.S.-United Kingdom Trade Agreement, 83 Fed. Reg. 57790 (November 16, 2018).
January 15, 2019 Page 2 If you have any questions or require additional information, please do not hesitate to contact the undersigned. Sincerely, David M. Spooner, Esq. Barnes & Thornburg, LLP COUNSEL TO THE U.S. FASHION INDUSTRY ASSOCIATION BARNESÞBURGLLP
United States Fashion Industry Association Public Comments U.S.-United Kingdom Trade Agreement: Comments on Negotiating Objectives for a U.S.-United Kingdom Trade Agreement Investigation Number USTR-2018-0036 Julia K. Hughes, President, United States Fashion Industry Association Think about the last item of clothing you purchased maybe a dress or suit jacket from Ralph Lauren or Primark, or a pair of jeans from Levi s, or a sports bra or running shorts from Under Armour. More likely than not, the label was very long, with care and content information in a variety of formats. This label is a minor inconvenience for the consumer, but it s quite a bigger problem for global brands and retailers who are producing garments in their global supply chains, trying to comply with the myriad of care and content labeling requirements in numerous countries in which they want to sell their products. This is just one example of how the U.S.-United Kingdom Trade Agreement could help American brands and retailers do more business in the United Kingdom, while allowing them to streamline their business operations and grow and create jobs right here in the United States. The United States Fashion Industry Association (USFIA) represents many of these fashion brands, retailers, importers, and wholesalers based in the United States and doing business
globally. Our member companies manage complex supply chains that span the globe, and trade with the United Kingdom is important for sourcing and retail. Of course, the U.S.-United Kingdom trade relationship is important for retail, especially in the fashion industry. Indeed, in 2017, U.K. consumers spent a cumulative 395 billion at retail establishments. 1 The United States and the U.K. are the home of many of the world s most iconic fashion brands and retailers, and consumers in the United Kingdom want Levi s jeans, Ralph Lauren suits, and Under Armour athletic gear just as much as consumers in the United States want fashion from Primark, Burberry, and Alexander McQueen. Yet, the United States and United Kingdom have higher tariffs and more restrictive practices on textile and leather products than almost every other consumer product. We strongly urge USTR to adopt, as a top priority in the negotiation of this agreement, the full, immediate, and reciprocal elimination of apparel tariffs, which would reduce the cost of doing business between the United States and United Kingdom and allow global brands on both sides of the Atlantic to sell more products, expand their operations, and create more high-quality, high-paying jobs at home in areas like design, compliance, retail, and marketing. As an added bonus, the elimination of these duties would give American consumers more choice by reducing the price of the products they want. 2 1 House of Commons Library, 29 October 2018. 2 The U.K., of course, remains part of the EU and, as such, currently imposes tariffs at EU rates. Hence, the below chart s reference to Tariff s Imposed by EU.
Figure 1: The current average most-favored nation tariffs imposed by EU and US. (Source: Hylke Vandenbussche et al. Free trade between the EU and US: A match made in heaven. Center for Economic and Policy Research, August 24 2018, https://voxeu.org/article/free-trade-between-eu-and-us-match-made-heaven.) Furthermore, in addition to eliminating all duties, we believe it is time for the United States to recognize that the textile and apparel sector does not need special rules of origin or special protection in the trade negotiations, and urge USTR to include a flexible, 21st-century rule of origin that recognizes the unique, global nature of the fashion industry s supply chains, in which sourcing decisions are based on consumer demand. A useful, 21st-century trade agreement with the United Kingdom should contain a flexible rule of origin for all products. During the Transatlantic Trade Investment Partnership (TTIP) negotiations a few years ago, USFIA worked with like-minded organizations and companies based in Europe, including the U.K., and found that they shared our views on the key issues that limit trade between the United States and United Kingdom, as well as the EU more
broadly. (With this statement, we ve included a copy of a joint statement with the European Branded Clothing Alliance that lays out those recommendations.) Returning to the concept of the garment labels, the U.K. of course, requires apparel to contain the same labels as other EU member nations. The U.S.-United Kingdom Trade Agreement could therefore provide an opportunity to simplify and harmonize product regulations, including care and content labeling requirements, customs procedures, product safety and testing requirements, and sustainability and factory safety in supply chains. There s simply no reason why we should need different regulations than our friends in the United Kingdom and in harmonizing these regulations, we ll not only enable more cross-regional trade and reduce waste in time, money, and company resources (further reducing consumer costs), but we ll also set the global standard, as other countries will follow our lead. The United States and United Kingdom have a strong relationship, with trade between us supporting millions of jobs on both sides of the Atlantic. An ambitious, high-standard, 21stcentury trade agreement with the United Kingdom could serve as the model for future trade agreements not only in the United States, but around the world, when other nations see the cost savings and efficiencies that result from eliminating tariffs and reducing trade barriers. Fashion is made possible by global trade and in many cases, by the important relationship between the United States and United Kingdom.
Let s make it easier to do business by eliminating the tariff and non-tariff barriers that harm companies and harm consumers.
JOINT STATEMENT BY FTA & USFIA 21 st April 2015 TTIP is a Win-Win Deal: Facts & Figures This week, as the United States and European Union work on the 9 th round of Transatlantic Trade & Investment Partnership (TTIP) negotiations, the Foreign Trade Association (FTA) and the United States Fashion Industry Association (USFIA) reiterate the importance of concluding this landmark agreement. (Read our op- ed in The Hill in Washington, D.C.: http://thehill.com/opinion/op- ed/238633- us- eu- and- trade) Representing brands, retailers, and importers based in the European Union and United States, respectively, FTA and USFIA agree that a milestone, 21 st - century agreement between the European Union and United States could have many benefits for the fashion sector, and many other sectors, as well as our economies and people. As the negotiators take a fresh look at the proposals on the table and make a plan to conclude an agreement, we urge them to consider the following facts about the negotiations. 1. Already today, the EU-US trade relationship is a driving force for economic growth and a factor of success without that the full potential yet has been realized. Bilateral trade in goods climbed to more than $700 billion in 2014, double the level of 2000 1 and already supports 13 million jobs in the European Union and United States 2. This huge market accounts for more than 50 percent of the global GDP in terms of value and 40 percent in terms of purchasing power. 3 Regardless of the general favorable conditions, a variety of obstacles remain in place, which complicate trade and investment and hamper growth across the Atlantic. Against 1 http://transatlanticrelations.org/content/out- now- transatlantic- economy- 2015 2 https://ustr.gov/ttip 3 http://transatlanticrelations.org/content/out- now- transatlantic- economy- 2015 21 st April 2015 1
JOINT STATEMENT BY FTA & USFIA this background, the TTIP present a tremendous opportunity to achieve stronger market integration and to create even more jobs and growth. 2. TTIP will be highly beneficial to both the US and EU economies by boosting growth and creating jobs. 4 An ambitious agreement could create as many as 750,000 new jobs in the United States 5, and wages for skilled and less skilled workers in the EU could grow by roughly 0.5% 6. The expansion of transatlantic commerce would add 119 billion to Europe s economy and 95 billion to the United States economy each year 7. This boost would contribute to long- term growth for all sectors, as well as long- term economic gains for families. In fact, American households (defined as a family of four) stand to gain approximately $865 annually, while European households stand to gain approximately $720 8 (or 545 9 ) annually. 3. The elimination of all tariffs and reduction of technical barriers would benefit all FTA and USFIA member companies based in the European Union and the United States. The European Union and United States both have more restrictive practices on textile, leather, and fashion products than most consumer goods. By eliminating tariffs and reducing technical barriers, our members would experience greater efficiencies and reduced costs of doing business, allowing them to sell more products globally, expand their operations, and create more jobs. 10 4. Given the size and influence of trade across the Atlantic, an agreement would contribute to the progressive strengthening of global rules, and the World Trade Organization. By joining together to harmonize regulations and reduce trade barriers, the European Union and United States have an opportunity to create uniform, high- standard regulations for the entire world on everything from product labeling, to product testing, to sustainability and safety in the global value chain. This would benefit companies, which are increasingly global, by reducing costs and delays at borders in fact the cost of dealing with unnecessary bureaucracy can represent 10-25% of total business costs. 11 We believe TTIP also will set the stage for the World Trade Organization to expand the commitment to multilateral agreements. 5. With strong clauses regarding regulatory cooperation, a centerpiece of a potential deal, the transatlantic pact could serve as a model for other 4 While there is public debate about the potential economic, social and environmental effects resulting from TTIP, the vast majority of scientific studies and assessments comes to the finding that the benefits will by far exceed the negative consequences. 5 http://www.atlanticcouncil.org/publications/reports/ttip- and- the- fifty- states- job- growth- from- coast- to- coast 6 http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf 7 http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf 8 http://www.atlanticcouncil.org/publications/reports/ttip- and- the- fifty- states- job- growth- from- coast- to- coast 9 http://trade.ec.europa.eu/doclib/docs/2013/march/tradoc_150737.pdf 10 Today s global value chains create quality jobs at home and nearly 70 percent of the value added due to GVCs stays in the United States (Report by TTP Apparel Coalition 2013) while 50-80 percent stays in Europe (Copenhagen Economics Study 2013) so expanding trade will only create jobs. 11 http://trade.ec.europa.eu/doclib/docs/2013/may/tradoc_151351.pdf 21 st April 2015 2
JOINT STATEMENT BY FTA & USFIA agreements. When two of the largest economies and most important markets for exports come together to harmonize standards and regulations, other nations will get on board, too. And when they see the widespread benefits of an ambitious elimination of tariffs and reduction of barriers, other trading partners will likely follow suit, further eliminating trade barriers around the world. Moreover, harmonized industry standards across the Atlantic would enable third countries to switch to a single production line for manufactured goods exported to the US and EU. 6. Only an ambitious and comprehensive TTIP will serve the common objective of promoting economic growth and a stronger mutual market integration. The final outcome of the negotiation process should fulfill the high expectations and go beyond the removal of tariffs and the harvest of low hanging fruits. The current tendency to extend the list of non- negotiable issues beyond what was agreed in the mandates is putting at risk the initial aim of a far- reaching agreement generating significant added value for the business community. A TTIP Light agreement is in the interest of neither party. Along these lines, FTA and USFIA are highly supportive of the negotiations. In the light of the negative publicity surrounding the TTIP, especially in Europe, we have to encourage our governments to keep up their ambitions to negotiate a comprehensive agreement. The TTIP will result in an enormous benefit for consumer and companies on both sides of the Atlantic. * * * The Foreign Trade Association (FTA) is the leading business association of European and international commerce that promotes the value of free trade. We bring together over 1,500 retailers, importers, brand companies, and national associations, with a combined turnover of more than 700 billion Euros, to improve the political and legal framework for trade in a sustainable way. pierre.groening@fta- intl.org Tel: + 32 274 164 03 www.fta- intl.org The United States Fashion Industry Association (USFIA) represents the fashion industry: textile and apparel brands, retailers, importers, and wholesalers based in the United States and doing business globally. Headquartered in Washington, D.C., USFIA works to eliminate the tariff and non- tariff barriers that impede the industry s ability to trade freely and create economic opportunities in the United States and abroad. ssault@usfashionindustry.com Tel: +12024190444 www.usfashionindustry.com 21 st April 2015 3