US: House OKs renewal of Andean trade programme
The US House of Representatives has renewed two important trade preference programmes for one year, in a move that now paves the way for the US Senate to cast its vote before the benefits expire at the end of this month.
Without the Generalized System of Preferences and the Andean Trade Preference Act (ATPA), US duties on thousands of goods would rise from 1 January.
US clothing importers who depend on the trade benefits say fears they might come to an end have already adversely affected sourcing patterns, and shifted production out of the region.
"When demands for Andean sourced apparel dries up, so too does demand for US yarn and fabric exports," says Kevin Burke, president and CEO of the American Apparel & Footwear Association (AAFA).
US apparel imports from the Andean region that enter the US duty-free under this programme use US cotton, yarns, and fabrics.
In 2008 alone, US cotton exports to the region totalled almost $150m, while US yarn and fabric exports to the region were worth $160m.
"I now urge the US Senate to vote on these extensions so that President Obama can sign them before those in US apparel and footwear industry who source in these covered regions experience any further business disruptions," Burke said.
"Disruptions at this delicate juncture will only erode the recovery our industry has started to make since the recession began."
Industry executives also point out that keeping the programme in place for an extra year provides time for the Peru Free Trade Agreement (FTA), which is already in force, to become fully viable.
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