THA Position on Trans-Pacific Partnership

It has become evident that the position that the United States Trade Representative (USTR) is currently taking vis-à-vis rules of origin related to socks and hosiery products in the Trans-Pacific Partnership (TPP) is contrary to the interests of the U.S. legwear industry.  Recent developments in the legwear marketplace have made the U.S. position even more unfavorable.  If the current proposed rule is adopted, minimal U.S. sock and hosiery products will qualify for preferential treatment under the TPP.  Below is a succinct description of the changes needed in the U.S. position to allow U.S. sock and hosiery exports to have preferential access to TPP countries, which should be the goal of any U.S. free trade negotiation.

KNIT TO SHAPE RULE FOR MAN-MADE FIBER SOCKS AND HOSIERY PRODUCTS

The U.S. legwear industry sources fiber from all over the world to create high-performance products.  U.S. products are sought-after on the world market because they are made with the highest-quality components using the most technologically advanced methods.  Limiting TPP preferential treatment to only originating man-made fiber products would automatically disqualify most, if not all, U.S. products.  A short supply provision in TPP is not a viable solution to this problem. Primarily, short supply envisions that the TPP region would, eventually, have the ability to supply all of the components needed by the industry.  This provision therefore limits the ability of U.S. companies to source the best product at the most competitive price, the two major reasons U.S. products are currently competitive on the world market.  Secondly, and equally as important, a short supply provision focuses only on the current state of art and does not address future innovation.  Global innovators in the industry are creating new products on a continuing basis.   By its nature, a short supply provision cannot address future materials.  Subsequently, U.S. products would either not be able to use these new materials, or they would be disqualified from TPP preferential treatment.

The Hosiery Association (THA) therefore requests that the USTR adopt a position which allows for non-origination of man-made fiber sock and hosiery products.  100% cotton and polyester products would still continue to be required to originate.

NON-ORIGINATION REQUIREMENT FOR ELASTOMERIC YARN

In October 2011, the U.S. elastomeric yarn producer Radici closed its doors.  This October, 2012, another U.S. elastomeric yarn producer – Asahi Kasei /Dorlastan – is closing as well.  This situation results in a greatly reduced U.S. base of elastomeric yarn, one that cannot possibly satisfy industry demand.  The Hosiery Association believes that a broad base of elastomeric yarn producers is needed in order to ensure continued competitive pricing.  That broad base can only exist if companies are allowed to source internationally.  The requirement that elastomeric yarn originate in TPP countries will restrict U.S. companies to sourcing from essentially one U.S. provider.  Neither U.S. producers and importers, nor Congress, nor the Administration would want to see that kind of monopolistic control of the industry.  Indeed, with the closing of these two U.S. elastomeric yarn producers, a rule requiring origination of elastomeric yarn becomes a potential “earmark” for one U.S. company.

The Hosiery Association (THA) therefore requests that the USTR adopt a position which would allow for non-origination of elastomeric yarn in sock and hosiery products.