The American Apparel and Footwear Association (AAFA) say it will continue to lobby Congress over the renewal of the Nicaragua TPL trade agreement, which links over 1,000 US textile jobs, before it expires later this year.

Earlier this month, Duke University published a report: Nicaragua and the Apparel Value Chain in the Americas, which outlined the implications should the TPL agreement not be renewed.

The report noted that, with the looming expiration of the TPLs granted to Nicaragua under the Central American Free Trade Agreement, and the ongoing negotiation of the Trans-Pacific Partnership (TPP), trade policy is at "a crucial juncture".

"Expiration of the current TPLs for Nicaragua will almost certainly cause a contraction in that country's apparel manufacturing sector," authors noted. The report revealed the trade agreement links to over 1,000 US textile and related manufacturing jobs and that its pending expiration directly threatens those.

Because a substantial percentage of Nicaragua's knit garments are entering the US under the TPL regime, report authors say they expect "a moderate to significant contraction" of Nicaragua's knit apparel industry, should the TPL expire.

"Several of the largest employers in the country's apparel sector are Nicaraguan subsidiaries of large, diversified knitwear manufacturers based in Asia. When the TPLs expire, these companies are well-positioned to shift orders to factories located elsewhere in their global production networks."

The report does note, however, that the consequences of TPL expiration for the US textile industry are unclear.

"If the TPLs expire, some importers will realign their value chain to comply with the yarn-forward rule of origin. Because the US is the most competitive producer of yarn and (to a lesser extent) fabrics in the Americas, increased compliance with yarn-forward would benefit the US textile industry.

"But it is also plausible that loss of the TPLs will lead importers to shift their sourcing to Asia. If this occurs, upstream production and employment in the US textile sector will be negatively affected."

Earlier this year, Julie Hughes, president of the US Fashion Industry Association (USFIA) said one of its political priorities for 2014 was the extension of the Nicaragua TPL.

"This duty-free access has been very successful for US brands and retailers, as well as for US textile mills who supply fabric (including bottomweight fabrics) used for the 1-for-1 matching programme. Without action by the US Congress, this benefit expires at the end of 2014 - so we are fighting to extend this successful programme that has a positive impact on all of the industry."

This sentiment has been echoed by the AAFA, which highlighted the report this week and said it will continue to lobby Congress to renew the trade agreement before it expires on 31 December.