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September 1, 2020

Industry associations call for swift renewal of Caribbean Basin Act

A cohort of industry associations across the apparel, footwear and accessories industries have joined forces to call on the US government to renew the Caribbean Basin Trade Partnership Act (CBTPA) as soon as possible.

A cohort of industry associations across the apparel, footwear and accessories industries have joined forces to call on the US government to renew the Caribbean Basin Trade Partnership Act (CBTPA) as soon as possible.

CBTPA, which celebrated its 20th anniversary on 18 May, is set to expire on 30 September 2020. Since its inception, the Trade Act has become an important element of the effort to develop and facilitate trade within the Caribbean Basin region, most notably with Haiti.

Overall, CBTPA is structured in a fashion that reasonably balances the interests of US textile manufacturers with those of textile and apparel manufacturers in the region. It requires the use of US or CBTPA-regional yarns and fabrics, which means Haiti, as the main country still participating in the CBTPA, has become an important export market for US textiles.

An open letter to US Trade Ambassador Robert E. Lighthizer on Friday (28 August) was jointly signed by the American Apparel & Footwear Association (AAFA), Council of Fashion Designers of America (CFDA), Footwear Distributors & Retailers of America (FDRA), and the National Retail Federation (NRF), among others.

Along with the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act, and the Haiti Economic Lift Program (HELP) Act, the CBTPA now increases US exports to strategic allies in the Caribbean Basin. The programmes have supported US textile, apparel, and footwear jobs, and supported economic development in the region, advancing key US foreign, security, and immigration policy goals.

“Specifically, the CBTPA continues to play a direct and critical role in advancing the industry partnership that currently exists between the United States and Haiti,” the associations wrote. “In 2019, 100% (by volume) of apparel that was imported into the United States under the CBTPA was imported from Haiti. And US apparel imports from Haiti continue to grow. In fact, total US garment imports from Haiti grew 13.4% in 2019. Because the rules of origin for these programs generally require the use of US fabrics and yarns, these US garment imports incorporate prior US textile exports.”

The associations says those benefits are now threatened because of questions surrounding the renewal of the CBTPA.

“These concerns come on top of the considerable pain, costs, and uncertainty the industry is already trying to manage as a result of Covid-19 and the accompanying economic crisis. Orders have already been placed for goods that will arrive well after 30 September. Companies must increasingly assume that these orders will be fully dutiable — even if using US inputs — putting our Haitian customers and partners, and our US textile manufacturers and exporters at a disadvantage.

“The CBTPA offers a great opportunity for companies looking to diversify their supply chains close to home, but time is running out for this critical program. We urge you to convey support to Congress to renew this program — which has bipartisan, bicameral support — as soon as possible,” they concluded.

In May, the AAFA, CFDA, and the Travel Goods Association (TGA) set out recommendations to Congress for future tariff relief and stimulus aid to help retailers and importers emerge from the coronavirus crisis.

This included renewal of the CBTPA. They said: “We request the renewal of this critical programme especially during these challenging times and especially because companies using it are now involved in efforts to make and distribute urgently needed PPE.”

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