September 2, 2003
Ms. Regina K. Vargo
Assistant United States Trade Representative for the Americas
United States Trade Representative
600 17th Street NW
Washington, DC 20508
Dear Ms Vargo:
As negotiations on the Central American Free Trade Agreement (CAFTA), advance to more serious discussions about rules of origin and trade preference levels (TPLs), the undersigned organizations strongly urge you to hold steadfastly to the terms initially tabled by USTR with respect to these critically important provisions.
Our organizations, representing by far the majority of U.S. textile manufacturers and fiber producers, processors and handlers, support a CAFTA agreement that includes a rule of origin and Customs enforcement measures that will prevent non-participating countries from obtaining unfair benefits from the agreement. To accomplish this we support a CAFTA that is based on:
- A North American Free Trade Agreement (NAFTA) type yarn-forward rule of origin with no provisions for TPLs;
- Customs enforcement provisions concerning textiles and apparel that are no less demanding than those embodied in the NAFTA, and which include a kick-out clause that would allow the U.S. to withdraw tariff benefits for any country that does not enforce the customs-related textile provisions of the agreement;
- Short supply provisions as defined in the Caribbean Basin Trade Partnership Act (CBTPA); and
- Provisions that would establish effective rules to deal with intellectual property violations, including those relating to designs, copyrights, trademarks and patterns.
We are deeply concerned that the rule of origin proposed by Central American negotiators during the New Orleans round, while purporting to be a yarn forward rule, contained numerous important exemptions and definitional language that would permit a large volume of third country yarns and fabrics to qualify for CAFTA trade preferences. We are also concerned about the Central Americansí accumulation proposal, which would extend benefits to countries other than the U.S., Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.
Our organizations agree that a well-designed, timely CAFTA will have a positive influence on the economic health of the fiber and textile industries in the U.S. and in the Central American participating countries. Conversely, an agreement with provisions that provide benefits to third countries will assuredly exacerbate the chronic economic problems and loss of jobs in the U.S. and in Central American member countries. TPLs and exemptions to a NAFTA-type rule of origin will provide yet another platform for Asian sources, especially non-market countries such as China, to flood the U.S. market with cheap, state-subsidized imports.
USTRís initial CAFTA proposal is one the undersigned organizations are prepared to support in a final agreement. We appreciate USTRís determination during negotiations to date to reject proposals that would compromise the effectiveness of CAFTA for its signatory countries, and we urge you to maintain that resolve throughout the remaining negotiations.
American Textile Manufacturers Institute
American Yarn Spinners Association
National Cotton Council
American Cotton Shippers Association
American Fiber Manufacturers Association
American Sheep Industry Association
American Textile Machinery Association
North Carolina Manufacturers Alliance
Manufacture Alabama Textile Council
Georgia Textile Manufacturers Association
The Association of Georgiaís Textile, Carpet and Consumer Products Manufacturers
South Carolina Manufacturers Alliance