WASHINGTON — Congressman Patrick McHenry (NC-10) and Congressman Bill Pascrell (NJ-9) issued the following statements after leading a bipartisan letter to Secretary of Commerce Gina Raimondo to encourage upholding textile and apparel product-specific rules of origin included in the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR).
“It is imperative to uphold the textile and apparel product-specific rules of origin included in the Dominican Republic-Central America-United States Free Trade Agreement, said Congressman Patrick McHenry. This trade agreement has resulted in billions invested in regional manufacturing and supports countless textile jobs, including many in the Tenth District of North Carolina. While companies are seeking to skirt this rule for their own gain, the net result is a benefit to China. We must uphold the integrity of this trade agreement to protect American jobs and maintain supply chains with our allies.”
“Preserving the integrity and intent of our trade agreements is essential to protecting American jobs and American manufacturing,” said Congressman Bill Pascrell, Jr.. “If we fail to adhere to the letter and intent of the agreements with our international partners, a trade deal isn’t worth the paper it’s printed on. This work is bipartisan because standing up for American industry can be nothing less than bipartisan. I thank Chairman McHenry for his focus on these issues and am proud to work together under the Congressional Textile Caucus.”
National Council of Textile Organizations President and CEO, Kim Glas, released the following statement on this bipartisan letter.
“I want to sincerely thank Congressman McHenry and Congressman Pascrell for spearheading this broad bipartisan letter, expressing strong support for the yarn forward rule of origin in the CAFTA-DR trade agreement,” said NCTO President and CEO Kim Glas. “Nearly $2 billion in new textile and apparel investment has gone into the CAFTA-DR region and the co-production chain. This investment is predicated upon the preferential benefits and strong rules in the trade agreement, which forms the basis for a vibrant co-production supply chain in the Western Hemisphere. Weakening this trade agreement’s textile rules through so-called ‘flexibilities’ by expanding the existing short supply list, as certain importers have proposed, would open the door to a flood of cheap Chinese inputs, devastate the existing U.S. and Central American textile and apparel industries and displace hundreds of thousands of workers. We also want to thank Congressman Murphy and Congressman Kildee for co-leading the effort and all the members of Congress who have signed on to this letter in support of the existing rules of origin and mechanisms in place under CAFTA-DR, which has been a great success story, supporting $15.1 billion in two-way trade and more than 1.1 million workers collectively.”
The yarn forward rule of origin has governed textile and apparel trade in all U.S. free trade agreements (FTAs) dating back to the North American Free Trade Agreement and was reaffirmed in the United States-Mexico-Canada Agreement.
Agreements such as CAFTA-DR contain limited exceptions for the yarn forward rule, including "short supply", which permits parties to agree on a list of manufacturing inputs and materials that can be sourced from a third party.
CAFTA-DR is unique among free trade agreements in that its short supply list is more expansive than any other agreement.
This letter strongly urges continuance of the short supply list process, requiring requestors to submit public petitions for review and reject requests to circumvent the process.
Bypassing the short supply petition and review system could result in non-signatory nations, namely China, gaining backdoor entrance to the benefits of the CAFTA-DR agreement.