Apparel Association Calls for Implementation of Cumulation Provisions between Colombia and Peru
[Editor’s note: This article originally appeared in the Oct. 10, 2013, edition of the Advisor, a weekly publication of the ST&R-TAP service, and is reprinted here with permission.]
The American Apparel and Footwear Association recently wrote to U.S. Trade Representative Michael Froman to “express strong support for the negotiation of provisions that will establish ‘cumulation’ within the Peru and Colombia Trade Promotion Agreements.” Article 3.3.14 of the U.S.-Colombia TPA and Article 3.3.14 of the U.S.-Peru TPA contain provisions that authorize the negotiation of cumulation with other countries in the region. Specifically, these articles provide that:
“In the light of their desire to promote regional integration, the Parties shall enter into discussions, within six months of the date of entry into force of this Agreement, or at a time to be determined by the Parties, with a view to deciding, subject to their applicable domestic legal requirements (such as a requirement to consult with the legislature and domestic industry), whether materials that are goods of countries in the region may be counted for purposes of satisfying the origin requirement under this Chapter as a step toward achieving regional integration.”
Currently, apparel products made in Colombia or Peru are generally required to incorporate textile inputs made domestically or in the United States in order to benefit from duty-free treatment under the Colombia or Peru TPA, as applicable. However, Colombian apparel may not incorporate textile inputs from Peru or other regional partners, and vice versa.
AAFA believes that this situation “stands at odds with historical U.S. trade policies” that allowed these two countries as recently as last year to “use inputs from each other, from other Andean countries, and, in certain cases, from Central America.” According to AAFA, current policies only serve to “artificially sever regional supply chains,” “increasing costs while diminishing the size of key U.S. yarn and fabric export markets.”