International Textile Trade

1. ACE 387 1 International Textile Trade Chapter 11: Structures for Facilitating and Managing Textile and Apparel Trade

2. ACE 387 2 Chapter 11: Government Structures Structures at the International Level Structures at the National Level The United States Other structures In North America: Canada, Mexico In the European Union Reflections on Structures for Facilitating and Managing T&A Trade (First) Complex system of policies requires complex system of structures to manage policies. Chapter 11 covers government structures and special interest groups. (Then, explain the slide)(First) Complex system of policies requires complex system of structures to manage policies. Chapter 11 covers government structures and special interest groups. (Then, explain the slide)

3. ACE 387 3 1) International Level: Official Governmental Structures 1) The World Trade organization (WTO) 2) Other International Organizations ?The United nations Conference on Trade and Development (UNCTAD) ?The International Labor Office (ILO) ?The International Trade Center (ITC) ? The Organization for Economic Cooperation and Development (OECD) 3) National missions 4) Unofficial Special Interest Group

4. ACE 387 4 The World Trade Organization (WTO) Established by agreement in Uruguay Round of trade talks. Began Jan 1, 1995; to replace GATT Headquarters of WTO is in Geneva, Switzerland To implement the world trade agreements made in the Uruguay Round (1993). All agreements under one institution covering more area of trade.

5. ACE 387 5 Differences Between WTO and GATT More areas of trade covered Increased power to set rules and resolve disputes Agricultural trade included for first time GATT only had responsibility for trade in manufactured goods Services covered for first time Trade-related intellectual property rights (TRIPS) MFA being phased out, so in 10 years (2005), textile trade directly under WTO

6. ACE 387 6 Divisions deal with T&A under WTO The Textiles Division Only division with responsibilities to take care of trade for a specific sector, except for agriculture Textiles Monitoring Body (TMB) To supervise implementation of agreements To handle disputes To conduct major reviews before end of each stage of phase-out of MFA (remember, 3 phases: 1995, 1998, 2002, 2005) Replaces TSB (Textiles Surveillance Body) that supervised Cannot force any party to comply with its recommendations, but will do what it can to solve problems

7. ACE 387 7 Other International Organizations The United nations Conference on Trade and Development (UNCTAD) Furthers interests of developing countries in matters related to economic development, including trade. International Labor Office (ILO) Conducts research on global production and trade shifts for a number of sectors, including textiles and apparel. Studies on international labor standards, working conditions, shifts in comparative advantage, etc.

8. ACE 387 8 International Trade Center (ITC) Part of UN to assist developing countries with trade promotion efforts Organization for Economic Cooperation & Development (OECD) Some research on aspects of textile trade National missions Refers to trade ambassadors from different countries (Contracting Parties) that represented their country to GATT and now will do the same for WTO.

9. ACE 387 9 Unofficial Special Interest Groups 1. The International Textiles and Clothing Bureau (ITCB) Coordinates interests of 20-some exporting nations Now is a formal group Supported by governments of member nations Trade assistance, view sharing, information Worked hard to get MFA eliminated 2. International Industry Federations Represent both exporting and importing nations, so don't take positions on trade issues International Apparel Federation (IAF) International Textile Manufacturers Federation (ITMF) Retail

10. ACE 387 10 Structures at the National Level: US How do the US structures function at the international level? ? Figure 11-7 US Official Government Structures Section 204 of Agricultural Act US Executive Branch Committee for Implementation of Textile Agreements (CITA) US Congress Office of Textiles and Apparel (OTEXA) USITC - US International Trade Commission US Customs Service Special Interest Groups

11. ACE 387 11 Section 204 of Agricultural Act Provided the cornerstone for US participation in MFA The Agriculture Act of 1956, Section 24 Established cotton export subsidies, but also... Authorized textile import quotas and the negotiation of bilateral agreements; the first was a 5-yr agreement with Japan. In 1962, was amended to include ALL fibers, not just cotton AND to allow US to apply unilateral restraints on imports from any country that is not a part of a multilateral agreement. This would include all countries that are NOT parties to MFA.

12. ACE 387 12 US Executive Branch US Textile and apparel trade policy is set by the executive branch. President has power to set policies, but the US Trade Representative who is the chief official who represents the president, holds cabinet-level and ambassadorial rank. Represents US in negotiations. Chief US Textile Negotiator also holds ambassadorial rank and the T&A sector is the ONLY one with its own institutionalized negotiator in the United States Trade Representative's (USTR) office.

13. ACE 387 13 Committee for Implementation of Textile Agreements CITA carries out the day to day operations of the U.S. textile and apparel import control program implementation of trade policy. Can request safeguards measures under the ATC Interagency committee, mostly made up of people from Commerce Department. Now chaired by Deputy Assistance Secretary of Commerce: Textile, Apparel, and Consumer Goods Industries Works closely also with the United States Trade Representative's (USTR) responsible for trade policies, State Dept, Treasury and Labor

14. ACE 387 14 US Congress See Figure 11-8. Plays an important role in influencing textile trade policy. Industry has input into Congressional activities primarily thru the Congressional Textile Caucus, a group of almost 100 members who are supportive of the industry. Most members are from strong textile states (NC, SC, GA, etc.) Bipartisan: supported by members of two political parties . Very powerful.

15. ACE 387 15 Office of Textiles and Apparel (OTEXA) OTEXA has the largest concentration of government staff devoted to T&A trade matter in Department of Commerce Textile and Apparel trade responsibilities. Industry Assessment Division (IAD) Monitors imports, production and employment data International Agreement Division (AD) Preparation of bilateral agreements Trade and Data Division (T&DD) Make policy recommendations Market Expansion Division Help expanding markets to other countries

16. ACE 387 16 US International Trade Commission (USITC) Responsibility: to monitor trade, provide economic analysis, and make recommendations to president regarding unfair trade practices of other countries. Has special status in the US government because it removes activities from political pressures. Responds to Congress and the Office of the USTR. Investigates when there are concerns regarding the material harm (esp. market disruption) caused by imports. But OTEXA decides if US market disruptions (under MFA and Section 24 of Ag Act) have occurred.

17. ACE 387 17 US Customs Service Responsible for processes imports, makes sure proper tariffs are paid, etc. Must monitor compliances With trade agreements and other regulations. With bilateral textile agreements. Fraudulent shipments, transshipments, mislabeled products, counterfeit products, compliance with country of origin rules, etc. Textiles presents huge and difficult task for Customs because the laws are so complex. Customs Modernization & Informed Compliance Act (1993) Extensive revision to Customs regulations. Harsher penalties for noncompliance, misrepresented import shipments

18. ACE 387 18 Special Interest Groups: Trade associations American Textile Manufacturers Institute (ATMI) Representing manufacturers primarily in the textile mill product industry American Fiber Manufacturers Association (AFMA) Representing the producer of manufactured fibers American Apparel Manufacturers Association (AAMA) Representing the Apparel Manufacturers US Apparel Industry Council Coalition of apparel manufacturers who have 9802 (807) manufacturers operations. Union of Needletrades, Industrial and Textile Employees (UNITE) Fiber, Fabric and Apparel Coalition For Trade (FFACT) American Association of Exporters and Importers (AAEI)

19. ACE 387 19 Special Interest Groups US Association of Importers of Textile and Apparel (USA-ITA) Formed in 1988, just for textile importers. National Retail Federation (NRF) Represents interests of retailers Retail Industry Trade Action Coalition (RITAC ) Formed by retailers specifically to lobby AGAINST legislation that would fight imports. Various Lobbying and consulting firms Textile Trade Associations for Exporting Nations **

20. ACE 387 20 Other structures in North America Canada Canadian International Trade Tribunal (CITT) Canadian Textiles Institute (CTI) Textile Federation of Canada (TFC) Canadian Apparel Federation (CAF) Mexico The National Chamber for Textile Industry

21. ACE 387 21 Other structures in the EU European Parliament Involving making EU policies Consisting of elected representatives from the member states European Council Provide political impetus in issue related to EU Council of Ministers Commission of the EU The European Observatory for Textiles and Clothing

22. ACE 387 22 Reflections on Structures for Facilitating and Managing T&A Trade After GATT, the number of structures to manage textile trade increased and has become more complicated. Policies for textiles trade has shifts from �trade drama� to have better structures. Trade policies are changing all the time. Structures are important. There will be more regional groups or federations as nations are more likely to form regional groups.

23. ACE 387 23 You can all go home!