US Trade Industry Information and Issues
United States-Mexico Trade Fact Sheet: Rebalancing NAFTA to Support Manufacturing
The United States and Mexico have reached a preliminary agreement in principle, subject to finalization and implementation, that supports North American manufacturing and mutually beneficial trade. The new agreement will create more balanced, reciprocal trade that supports high-paying jobs for Americans and grows the United States and Mexican economies.
RULES OF ORIGIN AND ORIGIN PROCEDURES
The United States and Mexico have concluded substantive discussions on new rules of origin and origin procedures, including product-specific rules for passenger vehicles, light trucks, and auto parts. This update to the rules of origin will provide greater incentives to source goods and materials in the United States and North America.
Key Achievement: Increasing Regional Value Content Rule
This deal encourages United States manufacturing and regional economic growth by requiring that 75 percent of auto content be made in the United States and Mexico.
The rules will:
- Incentivize billions annually in additional United States vehicle and auto parts production.
- Help to preserve and re-shore vehicle and parts production in the United States.
- Transform supply chains to use more United States content, especially content that is key to future automobile production and high-paying jobs.
- Close gaps in the current NAFTA agreement that incentivized low wages in automobile and parts production.
Key Achievement: Creating New Labor Value Content Rule
This deal uses trade rules to drive higher wages by requiring that 40-45 percent of auto content be made by workers earning at least $16 per hour.
The rules will:
- Support better jobs for United States producers and workers by requiring that a significant portion of vehicle content be made with high-wage labor.
- Ensure that United States producers and workers are able to compete on an even playing field, and incentivize new vehicle and parts investments in the United States.
- Encourage more investment by auto companies in research and development in the region.
Key Achievement: Exceeding NAFTA 1.0 and TPP Standards with Stronger Rules of Origin and Enforcement
The United States and Mexico have agreed to stronger rules of origin that exceed those of both NAFTA 1.0 and the Trans-Pacific Partnership (TPP), including for autos and automobile parts and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber.
This deal exceeds NAFTA 1.0 and the TPP by establishing procedures that streamline certification and verification of rules of origin and that promote strong enforcement. This includes new cooperation and enforcement provisions that help to prevent duty evasion before it happens.
The new rules will help ensure that only producers using sufficient and significant United States and Mexican parts and materials receive preferential tariff benefits.
GOODS MARKET ACCESS
New commitments have been included in the Market Access chapter to reflect developments in United States trade agreements that address non-tariff barriers related to trade in remanufactured goods, import licensing, and export licensing.
Key Achievement: Exceeding NAFTA 1.0 and TPP Standards to More Effectively Support Trade in Manufactured Goods
The new Market Access chapter will more effectively support trade in manufactured goods between the United States and Mexico by removing provisions that are no longer relevant, updating key references, and affirming commitments that have phased in from the original agreement.
Specifically, the Market Access chapter:
- Maintains duty-free treatment for originating goods.
- Maintains the prohibition on export duties, taxes, and other charges and the waiver of specific customs processing fees.
- Adds new provisions for transparency in import licensing and export licensing procedures.
- Prohibits Parties from applying: (a) requirements to use local distributors for importation; (b) restrictions on the importation of commercial goods that contain cryptography; (c) import restrictions on used goods to remanufactured goods; and (d) requirements for consular transactions and their associated fees and charges.
- Updates provisions for duty-free temporary admission of goods to cover shipping containers or other substantial holders used in the shipment of goods.
TEXTILES
The new provisions on textiles incentivize greater United States and Mexican production in textiles and apparel trade, strengthen customs enforcement, and facilitate broader consultation and cooperation among the Parties on issues related to textiles and apparel trade.
Key Achievement: Strengthening Supply Chains to Provide New Market Opportunities for the Textile and Apparel Sector
The provisions will:
- Promote greater use of
Made-in-the-USA fibers, yarns, and fabrics by:
- Limiting rules that allow for some use of non-NAFTA inputs in textile and apparel trade.
- Requiring that sewing thread, pocketing fabric, narrow elastic bands, and coated fabric, when incorporated in apparel and other finished products, be made in the region for those finished products to qualify for trade benefits.
- Establish a Textiles chapter for United States–Mexico trade, including textile-specific verification and customs cooperation provisions that provide new tools for strengthening customs enforcement and preventing fraud and circumvention in this important sector.
The new Textiles chapter provisions are stronger than those in NAFTA 1.0 with respect to both enforcement and incentivizing North American production of textiles.
SECTORAL ANNEXES
The United States and Mexico have also reached agreement on new provisions covering trade in specific manufacturing sectors, including Information and Communication Technology, Pharmaceuticals, Medical Devices, Cosmetic Products, and Chemical Substances. Each of the annexes includes provisions that exceed NAFTA 1.0 and TPP that promote enhanced regulatory compatibility, best regulatory practices, and increased trade between both countries.
US Department of Commerce
Industry Trade Advisory Committee Textiles and Clothing (ITAC13)
(as of January 4, 2018)
Chair
Jane L. Johnson
Manager, Government Relations
Unifi, Inc.
Vice-Chairman
Mark S. Jaeger, Esq.
Senior Vice President, Human Resources,
Jockey International, Inc.
Members
Charles L. Sanders
Vice President, Customs and Trade Compliance
Union Underwear Company, Inc. dba Fruit of the Loom
Dean Draughn
Vice President, Materials and Commercialization, Sourcing
Under Armor, Inc.
Edward G. Cochrane
Vice President and Secretary
Mount Vernon Mills, Inc.
Eric F. Warshaw
President
ErexCorp
Representing Secondary Materials and Recycled Textiles Association
H. Clayton Jenkins
Vice President, Global Sourcing, Compliance
Brown Show Company, Inc.
Jeffrey B. Whalen, Esq.
Senior Counsel, Customs
Nike, Inc.
Jessica E. Franken
Director, Government Affairs
The Franken Group, LLC
Representing INDA: Association of the Nonwoven Fabrics Industry
Katherine M. Dutih
Manager, Government Relations
Milliken Company
Kathie M. Leonard
President and Chief Executive Officer
Auburn Manufacturing, Inc.
Marc L. Fleischaker, Esq.
Partner and Chair Emeritus
Arent Fox LLP
Representing Rubber and Plastic Footwear Manufacturers
Maristella Iacobello
Vice President, Customs Compliance
PVH Corporation
Mathew B. LeBretton, Esq.
Director, Public Affairs
New Balance Athletic Shoe, Inc.
Michael D. Korchmar
Chief Executive Officer
The Leather Specialty Company
Nathanael “Nate” E. Herman
Director, Government Relations
Travel Goods Association
Patricia (Patti) M. Bates
Vice President, Sales
Glen Raven Technical Fabrics, LLC
Representing United States Industrial Fabrics Institute
R. Matthew Priest
President
Footwear Distributors and Retailers of America
Sara O. Beatty
Principal
Whitehaven Trade Advisors
Representing National Council of Textile Organizations
Shawn J. Dougherty
Director, Strategy and Trade Affairs
Dillion Yarn Corporation
Stephanie H. Lester
Senior Director, Government Affairs
Gap Inc.
Stephen E. Lamar
Executive Vice President
American Apparel & Footwear Association
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Coming Events
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September 26-27: 2018 SPESA Executive Conference, Louisville, Ky., USA
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September 27-28: 5th Digital Textile Congress 2018, Ghent, Belgium
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October 2-3: Filter Media Training Course, Philadelphia, Penn., USA
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October 2-4: Filtration 2018 International Conference & Exposition, Philadelphia, Penn., USA
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October 7-8: 2018 Southern Textile Research Conference, Myrtle Beach., N.C., USA
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October 8-10: 2018 AUSA Annual Meeting & Exposition, Washington, D.C., USA
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October 9-12: Nonwoven Fabric Property Development and Characterization, Raleigh, N.C., USA
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October 10-11: 4th International Conference on Nonwovens for High-Performance Applications, Cannes, France
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October 15-19: ITMA Asia + CITME 2018, Shanghai, China
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October 15-19: CAMX, Composites and Advanced Materials Expo, Dallas, Texas, USA
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October 16-17: GeoDallas 2018, Dallas, Texas, USA
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October 16-18: IFAI Expo 2018, Dallas, Texas, USA
Click here to view the complete technical textiles events calendar that includes show information links.
New Trade Deal with Mexico is Good News for US Textile Industry
Automotive Manufacturing Leading End Market for Technical Textiles Shipped to Mexico.
The United States and Mexico have reached a preliminary agreement that covers a substantial revision of the North American Free Trade Agreement (NAFTA); specifically, the rules of origin for automotive parts. It is expected to incentivize billions annually in additional US vehicle and auto parts production.
To qualify for zero tariffs under NAFTA, the current rule of origin requires 62.5% of the automotive parts must be made in NAFTA countries (Mexico, Canada and US). The new agreement increases to 75% for the parts to avoid the tariff. What's intriguing is that we don't know if the countries still include Canada, a substantial manufacturer of vehicles and automotive parts. Regardless, this will most certainly be a boon for US technical textile manufacturers as almost 50% of US technical textiles exports goes to Mexico and automotive fabrics are the leading destination end-product segment in making products such as airbags, headliners and seating.
Sobering Thought. Despite the "first glance" optimism, there may well be concern this revision could backfire on the US and Mexico. As I previously noted in my 2018 State of the US Technical Textiles Industry (March/April 2018, Textile World), increasing the percentage of automotive component parts (plus a new requirement that 40-45% of the auto content be made by workers earning at least $16 per hour) could end up pricing Mexican-made vehicles out of the very competitive global marketplace. Mexico currently makes 3.4 million cars annually for the world market.
Mea Culpa. In my same article noted above, I honestly thought revisions to NAFTA would not get done in 2018 because of the elections going on in Mexico, Canada and the US. I underestimated the dodged determination of the Trump Administration to push this trade issue forward. Why Mexico has acted on it without Canada's input is still to be understood.
Click here to read the entire statement posted by the US Trade Representative.
Steve Warner
Publisher
Posted August 28, 2018
Frédérique Mutel Stepping Down as JEC President
Frederique Mutel
In a message to BeaverLake6 Report, JEC Group President Frédérique Mutel has confirmed she has stepped down at the leader of the composite trade organization that she has led since 1997. At the head of JEC since its creation, Ms. Frederique Mutel fully committed to the expansion of composites, was instrumental in the establishment of JEC as provider of high value knowledge and networking services. At the same time, conducting a strong international development. No replace has been announced.
On July 13, 2018, Ms. Mutel was promoted to the rank of Officer in the Order of the Legion of Honour by decree of the President of the France. A very deserving honor for a key leader in the development of the composites industry. Posted July 25, 2018
State of the Chinese Technical Textiles Markets in 2017
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. Posted June 18, 2018
Report Published on the US Technical Textiles Industry
I am pleased to announce the second part of my report 2018 State of the U.S.Technical Textiles Industry has been published by Textile World magazine.
This first part features a general industry overview, plus an evaluation of the status and impact of US trade positions.
The second part, featured in the April/May issue will cover major end markets for technical textiles such as automotive and military.
Click here to go to the Textile World website to download a copy.
Steve Warner, Publisher
New Dates for ITMA Asia + CITME 2018 Textile Machinery Show
The joint owners of the ITMA Asia + CITME 2018 textile machinery exhibition have announced new dates for the 6th combined showcase to be held at the National Exhibition and Convention Centre in Shanghai, China. The new dates are October 15-19, 2018. According to show owners CEMATEX and Chinese partners, the Sub-Council of Textile Industry, CCPIT (CCPIT-Tex), China Textile Machinery Association (CTMA) and China Exhibition Centre Group Corporation (CIEC), the shift in the exhibition dates is due to a new national initiative, which affected the scheduling of all events at the exhibition center in October. [Note: BeaverLake6 Report is an industry media partner for the show.] Posted February 11, 2018
New Glen Raven CEO Interviewed for Textile World Magazine
CEO Leib Oehmig
In October at the IFAI Expo 2017, I had the opportunity to sit down with -- at the time -- incoming Glen Raven CEO Leib Oehmig for an interview that has now been posted on the Textile World website and will also be in their printed November/December issue.
I've known Mr. Oehmig for probably more than 20 years and have watched his steady management progression within the Glen Raven organization. During the interview, he was very gracious with his time at a busy show and transparent in answering questions on a far-ranging number of topics including the management transition from Alan Gant, Jr., to Mr. Oehmig, the first non-Gant family member to lead Glen Raven. Click here to read the interview and learn more about the thoughts of one of our industry leaders.
Steve Warner
Publisher
"Buy American" Amendments Needed in US FY 2018 National Defense Authorization Act
As the saying goes "Politics make strange bedfellows." Today we find more than one-third of the Senate Democrats urging the inclusion of key amendments in the US FY 2018 National Defense Authorization Act (2018 NDAA) that would strengthen the US government's "Buy American" policies.
Versions of the NDAA were recently passed by both the Senate and House and a joint committee is working out a single bill. The submitted Senate version, however, left out proposed key amendments designed to prevent the weakening of domestic sourcing for the US military. One amendment included the prevention for lifting of the restrictions in place for domestic sourcing of wearable electronic products and another amendment prevents certain exceptions to the Berry Amendment which would allow non-domestic sourcing through memoranda of agreement with foreign governments.
What's the "strange bedfellows" aspect? Well, "Buy American" is also one of the key positions taken by the Trump administration. So, we have both the Democrats and the Trump administration on the same side, trying to keep strong the US domestic capability for supplying the military. Strange bedfellows given the current political animosity in Washington...but still the cooperation is vital for the US domestic textile industry.
Steve Warner
Publisher
Posted November 3, 2017
Is Saving the US Navy's Peacoat a Matter of National Security?
Since last August, the US Navy has been planning to phase out its iconic traditional wool peacoat in favor of a less expensive, synthetic cold weather parka which is lighter in weight and more versatile in types of inclement weather. It actually replaces two types of coats and the seabag the wool coat is stored.
The wool coat, however, has some powerful friends in the US Congress. Companies such as Northwest Woolen Mills in Woonsocket, R.I. and Sterlingware in Boston, Mass. Altogether, the supply chain involved in the manufacture of these woolen peacoats -- including sheep farmers -- is estimated to account for 400 jobs in the Northeast. Add to the drama that the new parka, made by the long-time military supplier Propper, is expected to be manufactured in Puerto Rico, a perceived feeling the new coat will be made by non-American workers.
Steve Warner
Publisher
June 29. 2017
President Trump's Reveals 2017 Trade Policy Agenda
The Office of the U.S. Trade Representative (USTR) has released President Trump's 2017 Trade Policy Agenda. The document, officially called 2017 Trade Policy Agenda and 2016 Annual Report of the President of the United States on the Trade Agreements Program, outlines the new Administration’s four trade priorities:
- Defending the US National Sovereignty over Trade Policy
- Strictly Enforcing US Trade Laws
- Using Leverage to Open Foreign Markets
- Negotiating New and Better Trade Deals
BeaverLake6 Report has created a special page within this website and placed the first chapter of the 336-page document which summarizes the policy. Click here to read it. Posted March 2, 2017
What's the NCTO Game Plan for the Post-TPP Era?
Back on March 24, 2016, I was one of the first to predict the Trans-Pacific Partnership (TPP) agreement was a dead deal. In fact, I said that I wouldn’t be surprised that, if Donald Trump became President, the agreement is shredded on day one of his new administration. Well, I was off by three days. Yesterday, President Trump signed an Executive Order, officially withdrawing the United States from the TPP agreement. Now the question is can the National Council of Textile Organizations put together a comprehensive plan for the domestic textile industry in a post-TPP era? Click here to read the rest. Posted January 25, 2017
Media Partners
In My Opinion
In 2015, I posted more than 425 items of interest for our industry on the BeaverLake6 Report website. In reviewing it all last week, it got me to thinking about putting together a list of influential events, news and trends that I observed during the past year. I have focused primarily on the US marketplace but each of “the things that mattered” to me has global implications.
So, here go my thoughts in no particular order of importance. Let me know if you agree or if I have missed some. Click here to read the list.
Steve Warner
Publisher
Posted January 17, 2016
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