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NCTO testifies at USMCA public hearing

November 27th, 2018 / By: / Industry News, News

The U.S. International Trade Commission held public hearings in Washington, D.C., as part of its investigation into the likely impact of the U.S.-Mexico-Canada Agreement (USMCA) on the U.S. economy. National Council of Textile Organizations (NCTO) president and CEO Auggie Tantillo testified on the General Manufacturing panel on Friday, Nov. 16, 2018, the hearing’s second day.

Tantillo prefaced his remarks by citing that the U.S textile manufacturing chain, from fiber through finished sewn products, employs 550,000 workers. In 2018, the industry manufactured nearly $78 billion in output and exported more than $28 billion of production.

He noted that NCTO has not yet adopted a formal position on USMCA. The organization is willing to say the new agreement is an improvement over NAFTA in many areas, particularly concerning U.S. manufacturers of component parts such as thread, pocketing, narrow elastics and coated fabrics.

NCTO, Tantillo said, “is very pleased that the basic textile origin rules adopted originally in NAFTA were essentially reaffirmed in USMCA.”  He commended the three governments for creating a separate textile chapter in the new agreement, noting appreciation for separate and enhanced customs enforcement language.

Regarding other changes to the original text, NCTO supports these revisions: a requirement to use USMCA-origin sewing thread, pocketing, narrow elastics and coated fabrics in certain end items; and a change made in the Government Procurement Chapter regarding the Kissell Amendment, which is a Buy American statute for textiles that applies to the Dept. of Homeland Security.

One negative reaction NCTO had to the agreement is that tariff preference levels (TPLs) were not eliminated. TPLs allow products to be shipped duty free among free trade partner countries, even though components within the product are sourced from non-signatory countries. The organization believes retaining TPLs belies the administration’s stated goals of increasing benefits for U.S. manufacturers and eliminating provisions that have helped non-signatory nations.

NCTO is a Washington, D.C.-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.