The United States Industrial Fabrics Institute (USIFI) and the Narrow Fabrics Institute (NFI), both divisions of the Industrial Fabrics Association International IFAI) have submitted their comments regarding US President Donald Trump's intent to open the North American Free Trade Agreement for modernization in today's marketplace. Other trade associations -- including the National Council of Textile Organizations -- and industry companies have also submitted the public comments regarding NAFTA.
The following is the USIFI/NFI public comment filed on June 12 with the US Trade Representatives Office.
June 12, 2017
These comments are provided on behalf of the United States Industrial Fabrics Institute (USIFI) and Narrow Fabrics Institute (NFI) in response to the Federal Register request for public comments found at 82 FR 23699 and dated May 23, 2017 (USTR–2017–0006).
The United States Industrial Fabrics Institute (USIFI) is a division of the Industrial Fabrics
Association International (IFAI). Member companies manufacture highly-specialized textile
products, advanced materials, and components used to support a variety of high-value-added and sophisticated industries. These include the aerospace, automotive, construction, marine, medical, military and safety/protective gear sectors among others. USIFI currently has 75 member companies, and its headquarters are in Roseville, MN. http://usindustrialbabrics.ifai.com/
The Narrow Fabrics Institute (NFI) is a division of the Industrial Fabrics Association International (IFAI) whose mission is to work on common interests and issues in the narrow fabrics industry. Narrow fabrics are defined as textiles that are no more than 12 inches (300mm) in width and are made by weaving, knitting or braiding fibers or yarns with an edge to prevent unraveling. The primary product areas of NFI’s 57 member companies include automotive, military, safety, transportation, medical, and other (aerospace, industrial, pet, recreational, electronics). The North America market is estimated at over $335 million in annual sales. http://narrowfabrics.ifai.com/
USIFI and NFI agree that NAFTA is due for comprehensive review to determine whether it can be improved. However, noting that U.S. textile and apparel exports to NAFTA totaled $11.1 billion in 2016 and the high level of integration that exists today in the North American textile supply chain, USIFI and NFI oppose a wholesale cancelation of NAFTA.
Instead, USIFI and NFI support an improvement along the lines of:
Committing greater resources and focus to customs enforcement
During the past 30 years, there has been a systematic deemphasis of commercial fraud
enforcement at U.S. Customs and Border Protection (CBP). CBP suffers from both a lack of resources and focus, especially noting the uptick in the number of trade agreements and
overall trade flows during this timeframe. Consequently, the benefits of these agreements
have been siphoned off by third-party countries and importers willing and able to
circumvent U.S. trade laws and agreements.
USIFI and NFI strongly support the adoption of a new mentality that places an increased,
but proper, emphasis on customs enforcement of NAFTA and other FTAs. We encourage
the Trump administration and Congress to tangibly demonstrate that new approach by
increasing resources at CBP to enable more effective enforcement of U.S. trade laws and
USIFI and NFI also note that more effective trade enforcement will not only pay for itself,
but also generate new revenues that could then be used to promote trade facilitation
through the rebuilding and expansion of America’s infrastructure.
Eliminating exceptions to yarn forward in the NAFTA rule of origin
The standard rule of origin for textiles in nearly all U.S. FTAs is the yarn-forward rule, which requires yarn and everything following the yarn stage to be done in the FTA region. Yarn forward was originally devised under NAFTA and is the accepted rule of origin for the domestic textile industry because it reserves key benefits for manufacturers within the signatory countries. A yarn-forward concept is also markedly easier to enforce versus a value-added rule of origin.
Although most U.S. FTAs are built on yarn forward as the basic structure, exceptions to the basic rule exist in many agreements that shift business away from U.S. producers to FTA parties, namely China. These yarn-forward loopholes take many forms, with the most egregious being TPLs. TPLs allow for a specific quantity products to be shipped duty free among free trade partner countries even though the components within the product are sourced from countries that are not signatories to the agreement.
Under NAFTA, Mexico is permitted ship up to the equivalent of 24 million square meters (SME) of certain fabrics and made-up textile articles, including man-made fiber industrial products, annually to the U.S. duty free. Canada has a 72 million SME TPL for this category of articles. There are three additional TPLs for cotton and man-made fiber yarns, cotton and man-made fiber apparel, and wool apparel. These and other loopholes and should be eliminated in any renegotiation.
Closing the loophole that dilutes the Kissell Amendment
The Kissell Amendment, 6 USC 453b, is a Berry Amendment-like buy American law for textiles that applies to the Department of Homeland Security (DHS). In practice, however, DHS only applies Kissell to purchases by the Coast Guard and Transportation Security Administration (TSA) because of U.S. commitments made under the WTO’s Revised Agreement on Government Procurement (GPA).
With respect to its application to TSA, Kissell has further been diluted. This is because the U.S. government failed to notify Mexico and Canada under NAFTA, as well as Chile under the Chilean FTA, that the United States was reserving TSA from the GPA when TSA was created. Thus, the United States has taken the position that those countries are acceptable as U.S. sources under Kissell. This oversight should be rectified in any NAFTA renegotiation.
Thank you for your consideration of our views, and we look forward to working with the Trump administration in the NAFTA modernization effort.
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Posted January 15, 2020
Round One is Done. The first step is resolving the on-going trade dispute between the US and China is over with after the signing today of the Phase One Deal on 301 Tariffs. Reaction to the agreement in the US textile value chain is mixed. The National Council of Textile Organizations (NCTO) which represents US textile fiber, yarn and material makers, gave out a hesitant endorsement of the agreement, saying the group is still studying the details of the agreement. The American Apparel & Footwear Association (AAFA) issued a press statement after the signing expressing disappointment that the "Phase One" trade deal signed with China contains limited tariff relief fo US companies and consumers.
One of the key concession given by the US to get China to agree to the trade deal was the decision on January 13 by the US Treasury Department to remove the designation of China as a currency manipulator. The US had designated China as a manipulator in August, a goal long-sought by NCTO. BeaverLake6 Report has reached out to NCTO for comment on the change in the US government's position and will update this post as information becomes available.
Posted January 7, 2020
The historic political fight in Washington may actually benefit the US technical textiles industry in 2020.
In more "normal" times, even with bipartisan support of trade deals and building legislation, it's a slow process to get something done in Washington. In a funny way, under the current polar vortex called impeachment, things may actually get done faster. President Donald Trump wants to show he is still able to carry out his campaign promises and impeachment is not hindering his ability to administer. The Democrats, fearful of a bogged down impeachment process that could wear down their public support, are eager to show they can also get something done and avoid a blame they are only consumed with getting rid of the president.
Thus, you see both sides touting what's in the United States/Mexico/Canada Agreement (USMCA). The National Council of Textile Organizations (NCTO) is focused on the impact of what the agreement means in terms of fiber and yarn sourcing; however, I am more interested in the end product markets that benefit from the trade agreement. In the USMCA, the amount of material made in North America that goes into a vehicle increases significantly. The largest single end-market for technical textiles is the automotive industry. The USMCA means more products like headliner material, airbags and seatbelts, acoustical and vibration dampening, carpeting, composites and industrial hoses will be needed. USMCA is a terrific win for the many smaller technical textile parts makers in the US.
As for infrastructure, the current authorization, the Fixing America's Surface Transportation (FAST) Act of 2015, expires at the end of 2020. President Trump wants more than $1 trillion to help fix the country's roads and bridges. There is a bipartisan support for the new legislation because it's passage will benefit so many states. The winners for us? It would hands-down be the geosynthetics industry, as well as those who make construction-used products like tarps and protective covers, and personal protection gear.
So, expect to see some things getting accomplished in Washington in 2020. It is an election year and never underestimate the self-preservation instincts of a politician.
Posted January 7, 2020
December 3, 2019
Thanks to the BeaverLake6 Report's arrangements with China Textile magazine and the China Nonwoven & Industrial Textile Association (CNITA), we have received the report "A Brief Analysis of Economic Operation of the Industrial Textile Industry in the First Half of 2019" writtened by CNITA's market research department.
In the first half of 2019, China's economy faced a complicated development environment. Issues such as the downturn in automotive demand and the US/China trade dispute are having an impact. Production is still growing but the markets are relatively flat. Click here to read the entire report in the China section. Posted
November 24, 2019
The second edition of the Eurasian Geosynthetics Symposium (EAGS 2019) was held November 18-19, 2019 in Beijing, China. Many of the leading experts in geosynthetics delivered presentations. Ms. Flora Zhao, the director of the editorial department for China Textile magazine, has given us an extensive review of the symposium program. Click here to go to our China section to read her report.
The IFAI Expo 2019 was held last week in Orlando, Fla., USA. The exhibition was a smaller event than in years past but it still remains a powerful showcase of industry products. In the Special Report section, you will find analysis of the show, plus news that comes from the Industrial Fabrics Association International's Annual Meeting and the winners of the International Achievement Awards. Click here to read the articles. Posted October 10, 2019
In 2018, China's industrial textile industry maintained a relatively rapid growth. The year, though, also found more complex challenges for the industry, including the tariff issues with the US. Thanks to BeaverLake6 Reports' exclusive arrangement with China Textile magazine, we are presenting the English-translated version of the final 2018 report written by the China Nonwovens & Industrial Textile Association (CNITA). The report included information on fiber and material production, plus selected large end-product markets. Click here to read the report. Posted September 3, 2019
NCTO Members Testifying at US International Trade Commission. Surprisingly, there appears to be a little worry the announced new US tariffs on China (Section 301) may be reaching too far with its scope. The National Council of Textile Organizations (NCTO), which has been firmly behind most of the textile-tariffs against China over the last year, is expressing concern the new Tranche Four retaliatory tariffs may affect US imports on products needed by the US domestic textile industry.
[Read the rest of my editorial that takes NCTO to task for its hypocritical "moral" argument supporting the proposed additional products but excluding its industry's suppliers by clicking here.]
Posted June 17, 2019
Despite the increasingly complex industry demands, the Chinese technical textiles market was relatively stable. Nonwovens output increased over last year. Key specific markets such as tire cord also increased in 2018 over 2017. Overall operating income for industrial textiles used in China reached $34 billion. Click here to read the complete summary provided to BeaverLake6 Report by China Textile magazine through our exclusive relationship. Posted February 15, 2019
INDA, the Association of the Nonwovens Fabrics Industry, has issued its final report on IDEA19. The event held March 25-27, 2019 in Miami Beach, Fla., USA, attracted 6,500+ participants and 509 exhibiting companies from 75 countries. Show floor space was a record 168,600 square feet, a 9% increase over the previous show.
Surprisingly, the people and exhibitor participation figures are not record numbers. The IDEA16 show in Boston, Mass., USA, attracted 7000+ and 555 exhibitors.
So, why was participation down this year from IDEA16? I think an explanation for the decline is the South Florida location of IDEA19. Click here to read more.
BeaverLake6 Report is pleased to provide an exclusive interview with Li Lingshen, Ph.D., Vice President of the China National Textile and Apparel Council, and President of the China Nonwovens & Industrial Textiles Association, the overseeing organization for the technical textiles industry in China. Click here to read the interview.
Positive Reviews but Still Uncertainty. On November 16, 2018, two of the US textile industry associations testified before the US International Trade Commission (ITC) in a special hearing to determine the economic impact of the proposed United States-Mexico-Canada Agreement (USMCA). The leaders of the American Apparel & Footwear Association (AAFA) and the National Council of Textile Organizations (NCTO) provided statements on how they feel the new agreement will affect their member companies.
The two organizations clearly have different biases; however, in looking over the AAFA and NCTO statements, it appears to me that while the organizations both clearly said they were not offering an endorsement yet of the agreement, they gave general overall approval for USMCA, acknowledging the 1992 North American Free Trade Agreement (NAFTA) needed updating. Both organizations are taking a wait-and-see attitude to more fully look at how the agreement impacts the complex supply chain of textiles and apparel. Click here to read more.
NAFTA Replacement Agreement Negotiated. On October 1, President Donald Trump announced the US, Mexico and Canada had reached an agreement whichreplaces the North American Free Trade Agreement (NAFTA) that went into effect in 1994. The new United States-Mexico-Canada Agreement (USMCA) contains provisions and language that has an impact on the technical textiles industry; the most important are 1) a special section covering textiles and apparel and 2) rules of origin that will require 75% of automotive content (under NAFTA 62.5%) be made in North America. Mexico and Canada are the two largest importers of US made technical textiles and the automotive industry is the largest intended end market of these technical textiles. Click here to go to the United States Trade Representative's website and read the "Textiles and Apparel Goods" chapter. Posted October 3, 2018
Are you looking for a quick understanding of the China technical textiles industry? Through our special relationship with China Nonwovens & Industrial Textiles Association (CNITA) and their China Textile publication, BeaverLake6 Report is pleased to post the English-translation of the recently issued "Status Quo of China's Nonwovens and Industrial Textiles Industry, 2017." The report covers the different levels of the industry, geographic export demographics, and forecast the needs in the major end market applications. Click here to read the report in our China Textile website section.
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