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Trade Agenda in 2006 and Beyond: A View from Washington ISC/SCLC Spring 2006 Meeting

Trade Agenda in 2006 and Beyond: A View from Washington ISC/SCLC Spring 2006 Meeting Stephen Lamar Sr. Vice President American Apparel & Footwear Association April 2006. Where are we in 2006?. What’s Hot in Washington Trade Agenda. Where are we in 2006?. What’s Hot in Washington

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Trade Agenda in 2006 and Beyond: A View from Washington ISC/SCLC Spring 2006 Meeting

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  1. Trade Agenda in 2006 and Beyond: A View from Washington ISC/SCLC Spring 2006 Meeting Stephen Lamar Sr. Vice President American Apparel & Footwear Association April 2006

  2. Where are we in 2006? • What’s Hot in Washington • Trade Agenda

  3. Where are we in 2006? • What’s Hot in Washington • Trade Agenda

  4. Washington Political Scene • 194 Days Until the Next Election • Democrats Smell Blood.. • Perception That Republicans “Smell” • Scandals • White House Missteps • Budget Deficit • Iraq • Gas Prices • “Do Nothing” Congress? • Reverse of 1994? • Problem: Democrats Have No Ideas

  5. Washington Agenda • Budget • National Defense/Homeland Security • Tax • Health Care • Energy • Immigration? • Port Security • Lobby Reform?

  6. Where are we in 2006? • What’s Hot in Washington • Trade Agenda

  7. Trade Agenda • 429 Days Until Expiration of TPA • Doha Round • Free Trade Agenda • China/Enforcement • Schumer/Graham • IPR • Trade Aspects of Port and Immigration Debate • Dogs and Cats • CAFTA Fix • Misc. Trade Bill • Burma • Vietnam • Trade Preference Programs • New Leadership

  8. FTA Agenda • In place: • 8 FTAs with 11 countries (14 countries) • Pending/Under Negotiation • 11 FTAs with 15 countries • Opportunity: • Reduce Duties/Duty Free • Permanent Access/More Comprehensive • Danger: • Tight Rules of Origin/Enforcement • Sloppy/Delayed Implementation • Status: Steady but slow progress.

  9. Current and Future U.S. Free Trade Agreements • Ecuador • Thailand • UAE • SACU • FTAA • ASEAN • Middle East • Israel • NAFTA • Jordan • Chile • Singapore • Australia • Morocco • CAFTA-DR* • Bahrain • Oman • Peru • Colombia • Panama • South Korea • Malaysia • Egypt • Indonesia * El Salvador, Honduras, Nicaragua only. Note: Peru, Colombia and Ecuador may be merged. In force Under negotiation Pending Proposed Potential

  10. Other Major U.S. Trade Preference Programs • 9802 Programs • CBTPA • Jordan QIZ • Egypt QIZ • AGOA • ATPDEA • Insular Territories Goal: Reduce U.S. Duties

  11. Tariff Peaks Travel Goods Textiles, Apparel, and Shoes Source: USITC

  12. Who Pays U.S. Duties? (part I) Source: USITC

  13. China Mexico Honduras Bangladesh El Salvador Indonesia Vietnam IndiaDom. Rep. Cambodia China Brazil Vietnam Indonesia Italy Thailand Mexico Dom. Rep. Hong Kong India Who Pays U.S. Duties? (part II) Top 10 Apparel and Footwear Exporters to the U.S. (2005) ApparelFootwear Source: USITC Duty Free Not Duty Free

  14. Who Pays U.S Duties? (part III) Bangladesh Effective Duty Rate: 14.7 percent Belgium Effective Duty Rate: 1.0 percent Source: USITC

  15. Doha Round • Multilateral Negotiations (2001) • Opportunity: • Reduce Duties Further • Eliminate Non Tariff Barriers • Harmonize and Facilitate Trade • Danger: • Proposals to Limit Impact on Textiles • Reintroduce Quotas/Extend Safeguards • Status: Going nowhere fast

  16. Did Safeguards Work? • Ended Self Imposed Uncertainty for Many • Textile and Apparel Production: Down • Textile and Apparel Imports: Up • Imports from Asia: Up • Imports from Mexico/CAFTA: Down • Textile And Apparel Import Penetration: Up • Textile and Apparel Employment: Down • Apparel Prices Down

  17. China’s Incredible Growth Source: US Commerce Department

  18. China’s Incredible Growth? Source: US Commerce Department

  19. U.S. Apparel Imports 1994 & 2005 Source: US Commerce Department

  20. More on Safeguards… 1.7% 4.2% Percent of U.S. import market during 1st 2 months of 2006 Source: U.S. Department of Commerce

  21. What to DoAbout China? China WTO Obligations • IPR Issues • Currency • Distribution Rights w/in China • China Safeguards • Bilateral Agreement • Textile Safeguards • Product Specific Safeguards • Trade Remedies • Anti Dumping/CVD • Congressional Action

  22. A word on CAFTA-DR • 3 countries implemented • Still waiting for CR, DR, and Guatemala • Footwear working well. • Textile and apparel issues (Go to Asia): • Co Production Nightmare • Pockets/Linings and TPL Change • Socks Change • Cumulation • Other Technical Fixes

  23. How Are Other Countries Doing? Source: US Commerce Department

  24. For Rest of 2006… • Homeland security will remain critical • Trade enforcement will remain important • Duty free will be a slow process • Trade fatigue plus mischief in Congress will discourage much positive action.

  25. Thank You American Apparel and Footwear Association 1601 N. Kent Street, 12th Floor Arlington, VA 22209 703-797-9041 slamar@apparelandfootwear.org www.apparelandfootwear.org

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