A coalition of US apparel and retail organisations is
urging the US Trade Commission to eliminate import tariffs on apparel sourced
from key sourcing countries and to renew and expand the scope of the
Generalised System of Preferences (GSP) to include certain apparel products.
The
American Apparel and Footwear Association (AAFA), the National Retail
Federation (NRF), the Retail Industry Leaders Association (RILA), and the
United States Fashion Industry Associated (USFIA) have submitted a post hearing
statement to the chairman of the US International Trade Commission.
The organisations argued the US imposes
higher “most-favoured-nation duty rates” on apparel products than nearly any
other sector which also factors into the cost competitiveness of source
countries.
The coalition highlighted that despite being
ineligible for duty free treatment under the GSP, which excludes apparel
products, countries like Bangladesh, India, Indonesia, Cambodia and Pakistan
remain competitive. This, according to the organisations, reflects the
important role these countries play in the broader supply chain diversification
efforts of apparel and retailers.
The organisations shared increased costs to
both businesses and American customers was evident from the imposition of the
section 301 tariffs on products from China. They said: “Tariffs are taxes that
are paid by the importer and eventually paid by the consumer.”
The coalition argued that higher tariffs on
apparel would have the biggest impact on low and middle-income consumers.
Therefore, the coalition pointed out that imposing tariffs on other source
countries would be “counterproductive.”
They stated: “The decision to source
products from a particular country depends on a variety of factors. These
factors include, in no particular order: vertical integration; speed to market;
cost competitiveness; product capability; the skillset of the available labour
force; geopolitical stability; proximity to raw materials; adherence to
quality, social and environmental compliance standards; capacity; supplier
relationships; ongoing supplier investments in capabilities like automation for
embellishments; and available infrastructure and logistics considerations.
Supplier relationships based on longevity and rooted in trust are also
incredibly important for our members.”
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The organisations instead urged the US
government to accelerate ongoing supply chain diversification efforts through
renewal of the GSP programme. They added that the GSP programme should be
expanded further to include certain apparel products.
The coalition also encouraged the US
government to pursue “high ambition” trade agreements with Indo-Pacific
countries that lower tariff and non-tariff barriers, raise standards –
including labour and environmental standards, and contain strong dispute settlement
provisions.