Thursday, September 11, 2014

Next Week Could be Critical to Outcome for Textiles in TPP

On September 10th Trans-Pacific Partnership ("TPP") chief negotiators completed 10 days of intensive meetings in Hanoi and report having made important progress across a range of issues.

During the session in Hanoi, Vietnam, the United States and its TPP partners – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam – reportedly resolved many issues and narrowed gaps in other areas. According to a release by the Office of the United States Trade Representative, the teams made important progress on State-owned enterprises, intellectual property, investment, rules of origin, transparency and anti-corruption, and labor and continued to move forward with their work to construct ambitious packages for preferential access to each other’s markets for goods, services/investment, financial services, and government procurement.

Having reduced a number of outstanding issues, the United States and the other 11 TPP countries says they look forward to resolving the remaining issues as quickly as possible, including both on the text and market access packages. Market access presumably includes resolution of the long-standing difference between the United States and Vietnam regarding access to the U.S. market for textiles and apparel, specifically, the rule of origin. The U.S. has sought the "yarn forward" rule, while conceding that certain inputs not available in the region may be on a "short supply" list. Vietnam has sought "flexibility" which is generally understood to refer to a single transformation rule.

U.S. Ambassador Michael Froman has announced plans to work bilaterally with many of his TPP counterparts in the coming weeks. Next week, he will meet with Vietnamese Deputy Prime Minister Ninh in Washington, D.C. According to press accounts, the rules of origin for textiles and apparel will be on the agenda for those Washington meetings next week.

On a related note, the Vietnam Ministry of Industry and Trade published, Monday, on its website a report on foreign investment in the textile and apparel industries in Vietnam, driving, in part, by the anticipated benefits of TPP.

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