Toward a 21 st Century TPP Agreement for Apparel April 2013 Learn more about apparel in the TPP at >> 1

Who is the TPP Apparel Coalition Learn more about apparel in the TPP at >> 2

Who is the TPP Apparel Coalition The TPP Apparel Coalition includes American retailers, apparel brands, apparel manufacturers, and importers, and the many millions of American workers the industry employs. The TPP Apparel Coalition is comprised of US-headquartered companies that together employ 3 million associates globally, including 2 million associates in the United States, and aggregated total sales of $528 billion. Coalition member companies design, market and sell products manufactured in and imported to the United States. We also market and sell products throughout the TPP countries. Learn more about apparel in the TPP at >> 3

Yarn Forward Has a Dismal Track Record in U.S. FTAs: U.S. Apparel Imports from Yarn Forward FTAs have declined while U.S. Apparel Imports from Other Countries Have Grown Learn more about apparel in the TPP at >> 4

Yarn Forward Can’t Work for Vietnam: Vietnam has diversified textile suppliers (but only about 2 percent come from current TPP countries). Learn more about apparel in the TPP at >> 5 Note: Vietnam records textile imports from the following current TPP countries: Australia, Canada, Malaysia, Mexico, New Zealand, Singapore, and the United States.

Vietnam Will Need Actual Market Access to the United States to make a deal: 73 percent of all duties collected by the U.S. in 2012 were collected on woven and knit apparel. Learn more about apparel in the TPP at >> 6 Total Duties Collected - $1.75 Billion (Vietnam accounts for 70% of All Duties Collected ($2.501 billion) from current TPP Countries) Source: Annual 2012 Data, U.S. International Trade Commission's (ITC) Trade Dataweb - Distribution of Duties on U.S. Imports From Vietnam

Yarn Forward Hasn’t Worked for CAFTA-DR: U.S. textile exports are uneven while U.S. apparel imports are way down. Learn more about apparel in the TPP at >> 7

Yarn Forward Hasn’t Worked for NAFTA: U.S. textile exports and apparel imports grew at first, but have declined over the last decade. Learn more about apparel in the TPP at >> 8

Recent Studies Highlight Substantial U.S. Value Added in U.S. Apparel Imports: Moongate Associates calculates U.S. value added for imported apparel equals 70 percent Learn more about apparel in the TPP at >> 9 Courtesy: Moongate Associates Value-added as a portion of retail apparel purchase  LOW RETAIL PRICE Company/product response HIGH RETAIL PRICE 

A typical apparel global value chain: 3 million U.S. jobs support apparel production, design, distribution, and sales. Learn more about apparel in the TPP at >> 10 Courtesy: Moongate Associates

U.S. Textile Industry Doesn’t Need Yarn Forward to Export: U.S. textile exports have soared to Vietnam (even without an FTA or yarn forward rules). Learn more about apparel in the TPP at >> 11

U.S. Textile Industry Doesn’t Need Yarn Forward to Export: U.S. textile exports have soared to China (which now ranks as the 2 nd largest market for U.S. yarn and 3 rd largest market for U.S. fabric). Learn more about apparel in the TPP at >> 12

Yarn Forward Is An “All or Nothing Rule”: If the entire supply chain can’t line up with each style, each order, and each season, no trade occurs. Learn more about apparel in the TPP at >> 13 Commonly covered components and operations in yarn forward rules in current US FTAs

Yarn Forward Requires Heavy Documentation: If a single document is missing, the entire order fails to qualify. Four inches of documents per style is too much. Learn more about apparel in the TPP at >> 14

Our Conclusion Learn more about apparel in the TPP at >> 15 The 20-year old Yarn Forward Rule Can’t Work for a 21 st Century Trade Agreement. It doesn’t drive exports or imports under U.S. FTAs It no longer works for the agreement (NAFTA) for which it was tailor- made. It doesn’t support the 3 million U.S. jobs that depend on global apparel supply chains. Supply Chains in the ASEAN region extend beyond TPP. Vietnam, for example, only sources 2 percent of its yarns, fibers, and fabrics from other TPP countries. Flexible approaches will be needed to ensure trade and investment and bring TPP parties to the table. U.S. textile exporters successfully export to Asian and Latin American markets and don’t need yarn forward to compete and export.

Thank you. For more information, visit Learn more about apparel in the TPP at >> 16