Congressional Letter To USTR Expressing TPP Concerns

Print Version

Published: June 14, 2013
 
Updated: June 14, 2013
 

United States Trade Representative

600 17th Street NW
Washington, DC 20508

Dear Ambassador _______________:

The undersigned members of Congress write to express our collective concern regarding the Trans-Pacific Partnership (TPP) negotiations.Specifically, we are troubled with the position of the Vietnamese government regarding the textile negotiations and the impact this could have on the U.S. textile industry, its suppliers and its export partners.After 16 rounds of negotiations, Vietnam is seeking to replace long standing textile rules that have been included in previous free trade agreements with a new rule that would allow Vietnam to source textiles from China and export garments and finished goods to the United States duty free.A recent study concluded that if adopted as part of the TPP, this rule would cost more than 500,000 U.S. textile and related jobs and put more than 1.5 million jobs in the textile and apparel supply chains in the Western Hemisphere and Africa in jeopardy.

The TPP talks are entering what is expected to be the final year of negotiations and because of the Vietnamese government's intransigence, the United States government ranks textiles and apparel among the three most difficult negotiating chapters.We strongly urge the USTR to maintain its current position for strong textile rules which include the "yarn forward" rule-of-origin.From NAFTA to the recently implemented Korean free trade pact, the yarn forward rule has been an essential component of every U.S. free trade agreement over the past 25 years. This rule has a proven track record of job creation in the U.S. and our free trade areas, it is responsible for hundreds of thousands of U.S. manufacturing workers and millions of direct and indirect jobs in countries south of our border and in Africa.Specifically, the yarn-forward rule is responsible for $25 billion in two-way trade between the United States and Mexico, Haiti, the CAFTA-DR countries and the Andean region.

The yarn forward rule has been a success because it ensures that only textile and apparel manufacturers within a particular free trade region, such as the proposed TPP, gets the benefits from the agreement.Vietnam however wants to replace this proven rule with a new rule that would allow its state owned companies to flood the U.S. market using subsidized Chinese inputs.Vietnam predicts that under this new rule, its market share in the U.S. would rapidly increase from 7 to nearly 30 percent.Almost all of this growth would be taken from small and medium sized textile companies in the U.S. and our trading partners in the Western Hemisphere and Africa.Over ten billion dollars of current U.S. textile exports would be lost while more than a million workers in fragile economies would see their livelihoods destroyed.

While the toll on U.S. manufacturing workers would be high, the social and economic impact on small developing economies south of our border that depend on the textile and apparel supply chain would be devastating.That is why textile and apparel groups representing Haiti, the CAFTA-DR countries, Mexico, the Andean countries – as well as groups representing the AGOA countries - have joined with the U.S. industry in support of maintaining strong textile rules in the TPP.These groups represent thousands of small privately owned companies[1] that have been created under the existing preference rules and which provide badly needed jobs and opportunities to their countries.

In addition to the rules-of-origin, the TPP must include other rules that have long been the standard for previous FTAs.These include extended duty phase-down periods for sensitive textile and apparel products and strong customs enforcement rules and resources.These are particularly important given the array of subsidies and benefits that Vietnam's state run economy gives to its textile sector. These benefits have fueled Vietnam's rise as a major apparel exporter by allowing Vietnam to artificially reduce prices on manufactured goods.The U.S. government must insist on a reasonable transition period with Vietnam and other TPP partners as duty preferences are phased into existence.

We understand that the TPP is intended to encourage two-way trade with the countries participating in the talks. However, we strongly believe that the terms of this trade agreement must be fairly constructed, that long standing and established rules should not be eroded, and that a final agreement must preserve and create investment in U.S. manufacturing and jobs, particularly in small and medium sized businesses.Maintaining provisions like yarn forward along with strong duty preference provisions in the TPP will not only help the domestic textile industry keep good-paying, productive private textile jobs in the U.S. but will aid in the development and opening of new export markets amongst these important trading partners.We look forward to working with the USTR as the TPP negotiations press forward this year.As the TPP negotiations come to a conclusion, we will be mindful of the outcome of the textile and apparel rules in determining our ultimate views on a final agreement.

Thank you for your consideration of the perspectives this letter has outlined.

Sincerely,

Patrick McHenry (Member of Congress)
Howard Coble (Member of Congress)
Bill Pascrell (Member of Congress)

TPP Letter Co-signers

Alabama

Jo Bonner (R-01)
Martha Roby (R-02)
Robert Aderholt (R-04)
Mo Brooks (R-05)

Arizona

Ed Pastor (D-07)

California

Sam Farr (D-20)
Linda Sanchez (D-38)

Connecticut

John Larson (D-01)
Joe Courtney (D-02)
Rosa DeLauro (D-03)

Georgia

Jack Kingston (R-01)
Sanford Bishop (D-02)
Lynn Westmoreland (R-03)
Austin Scott (R-08)
Doug Collins (R-09)
Phil Gingrey (R-11)
David Scott (D-13)
Tom Graves (R-14)

Illinois

Dan Lipinski (D-03)
Jan Schakowski (D-09)

Indiana

Larry Bucshon (R-08)

Louisiana

Rodney Alexander (R-05)
Charles Boustany (R-07)

Maine

Chellie Pingree (D-01)
Mike Michaud (D-02)

Massachusetts

Richard Neal (D-01)
Jim McGovern (D-02)
Niki Tsongas (D-03)
Michael Capuano (D-07)
Stephen Lynch (D-08)

Mississippi

Alan Nunnelee (R-01)
Bennie Thompson (D-02)

New Hampshire

Carol Shea-Porter (D-01)
Ann McLane Kuster (D-02)

New Jersey

Frank LoBiondo (R-02)
Frank Pallone (D-06)
Albio Sires (D-08)
Bill Pascrell (D-09)
Donald Payne (D-10)

New York

Carolyn McCarthy (D-04)
Yvette Clarke (D-11)
Carolyn Maloney (D-12)
Paul Tonko (D-20)
Bill Owens (D-21)
Louise Slaughter (D-25)
Brian Higgins (D-26)
Chris Collins (R-27)

North Carolina

G.K. Butterfield (D-01)
Renee Ellmers (R-02)
Walter Jones (R-03)
David Price (D-04)
Howard Coble (R-06)
Mike McIntyre (D-07)
Richard Hudson (R-08)
Robert Pittenger (R-09)
Patrick McHenry (R-10)
Mark Meadows (R-11)
Mel Watt (D-12)
George Holding (R-13)

Pennsylvania

Tom Marino (R-10)
Lou Barletta (R-11)
Allyson Schwartz (D-13)
Matt Cartwright (D-17)

Rhode Island

Jim Cicilline (D-01)
Jim Langevin (D-02)

South Carolina

Joe Wilson (R-02)
Jeff Duncan (R-03)
Trey Gowdy (R-04)
Mick Mulvaney (R-05)
Tom Rice (R-07)

Tennessee

Phil Roe (R-01)
John 'Johnny' Duncan Jr. (R-02)

Texas

Michael Conaway (R-11)
Rubén Hinojosa (D-15)
Randy Neugebauer (R-19)

Virginia

Morgan Griffith (R-09)

West Virginia

Shelley Moore Capito (R-02)

Wisconsin

Mark Pocan (D-02)


[1] The Textile and Apparel Coalition for TPP (www.taa-tpp.com)