The Berry Amendment
Background
The Berry Amendment is a statutory requirement that restricts the Department of Defense (DoD) from using funds appropriated or otherwise available to DoD for procurement of food, clothing, fabrics, fibers, yarns, other made-up textiles, and hand or measuring tools that are not grown, reprocessed, reused, or produced in the United States. The Berry Amendment has been critical to maintaining the safety and security of our armed forces, by requiring covered items to be produced in the United States. Further, the Berry Amendment has been critical to the viability of the textile and clothing production base in the United States. Some NCTO member companies are direct contractors to DoD and have first-hand knowledge of the Berry Amendment. Others are subcontractors subject to the Berry rules. Others may be interested in learning more about the opportunities that Berry creates for U.S. fiber, yarn, fabric, apparel, and sewn products manufacturers. This brief paper is provided solely for educating the general public about the Berry Amendment as it relates to textiles and clothing. It is not intended to give specific advice in relation to the terms of military contracts.
The History of the Berry Amendment
Since 1790, when President George Washington told the first session of Congress that the “safety and interest” of a free people “require that they should promote such manufactures as tend to render them independent of others for essential, particularly military supplies,” Congress has taken a special interest in the health of the manufacturing sector.
A military domestic sourcing requirement for uniforms was passed by Congress in 1941, as part of the Fifth Supplemental DoD Appropriations Act. Prior to World War II Congress understood war was on the horizon and the original intent of the restriction was to ensure U.S. troops wore uniforms produced in the United States.
In 1952 Congressman Berry of South Dakota introduced an amendment to the DoD’s Buy American restrictions. Prior to Congressman Berry’s amendment only food and certain clothing products were covered in the restrictions. Berry’s amendment expanded the DoD’s Buy American restrictions to cover all clothing, cotton and wool (man-made fibers were subsequently added). The Amendment was included in annual defense spending bills until it was made permanent in Fiscal Year 1994 by section 8005 of Public Law 103-139. It was subsequently codified as 10 U.S.C. 2533a in 2002 by section 832 of Public Law 107-107.
Common Questions about the Berry Amendment
Q. Wouldn’t the taxpayers of the U.S. benefit from giving DoD freedom to acquire textile and clothing from the lowest cost source, even if that means using foreign textiles and clothing?
A. The question is aimed at misdirecting attention away from the reason for the Berry Amendment. As the history above points out, from the founding of our nation, wise leaders have understood that a free people will be free only as long as they can supply their military to maintain that freedom. The 1941 law, which later became the Berry Amendment was passed in recognition of the fact that the U.S. would only be able to win monumental conflicts, such as WWII, if it is not dependent on foreign sources for critical defense materials.
Q. Does the Berry Amendment require the U.S. government to always buy American-made textiles and clothing.
A. No, the Berry Amendment applies to the U.S. Department of Defense only. There is a similar domestic sourcing requirement for the Department of Homeland Security (DHS), it is called the Kissell Amendment. Other U.S. government agencies have more flexibility with regard to acquisitions.
Q. Why just those two, DoD and DHS?
A. Under international trading rules as governed by the World Trade Organization (WTO), countries are normally required to make government procurement contracts open to supply from both domestic and foreign sources. However, these same WTO rules allow countries to restrict military and security procurement to domestic sources, only. Due to their national security role, DoD and DHS qualify for this exception. It is also important to note that in future trade agreements the U.S. needs to continue to reserve the right to require domestic sourcing in the case of the departments that are vital to our national defense — DoD and DHS.
Q. What about textile and clothing articles that DoD purchases for use by foreign defense agencies?
A. The Berry Amendment applies to all funds “made available” to the Defense Department. That includes Department of Defense procurement for a Foreign Military Sale (FMS) where the funds were provided by the customer country. So, for example, when the Afghan government provides money to DoD to acquire uniforms for the Afghan National Police, those uniforms are subject Berry Amendment U.S. sourcing requirements.
Q. Are there any exception to Berry?
A. There are two significant exceptions.
The SAT, or Simplified Acquisition Threshold, sets the base monetary amount at which Berry applies. Acquisitions below the SAT are exempt from Berry. Section 807 of the Ronald W. Reagan National Defense Authorization Act (NDAA) for Fiscal Year 2005 requires an adjustment every 5 years of acquisition-related thresholds for inflation using the Consumer Price Index (CPI). The last such adjustment was in 2010, raising the SAT to $150,000. No inflation-related adjustment has since been implemented. However, the 2018 NDAA ignored the current low rate of inflation and increased the SAT to $250,000.
A DNAD, or Domestic Non-Availability Determination, to the Berry Amendment may be granted if DoD determines that items grown, reprocessed, reused, or produced in the United States cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices. There is language in the legislative history of the Berry Amendment indicating that Congress intended for Defense agencies to exercise extreme caution in granting waivers, a fact that has been noted by the Government Accountability Office (GAO).
Q. Who can make Domestic Non-Availability Determinations?
A. The seriousness of Congress and the DoD in maintaining the Berry Amendment and protecting it from a proliferation of DNADs is the fact that just a limited number of officials have the authority to issue a DNAD, including The Under Secretary of Defense (Acquisition, Technology and Logistics), The Secretary of the Army, The Secretary of the Navy, and The Secretary of the Air Force.
Q. Where can I find a list of DNADs?
A. There is no list as such, as each determination relates to a particular set of circumstances and does not create a blanket exception to Berry with regard to some input. Questions about DNADs are best directed to the contracting officer.
Conclusion.
Since the days that the Greatest Generation fought to preserve our freedom from threats around the globe, our fighting men and women have been assured that whatever other hardships they may have to bear while protecting us, they would, at least, be assured of clothing, tents, shelters, and other textile products necessary to get the job done. Through all this time, the U.S. textile industry has worked with our military to equip those brave men and women with the highest quality textile products incorporating emerging smart textile technology.
NCTO Raises Serious Concerns over the Administration’s Plan to Impose Tariffs on Mexico
/in Press Releases /by Kristi EllisWASHINGTON, DC – Kim Glas, President & CEO of the National Council of Textile Organizations (NCTO), issued the following statement today in response to the administration’s decision under the International Emergency Economic Powers Act to assess penalty duties on Mexico as an attempt to address the growing immigration dispute on the U.S. southern border. The proposed 5% increase would begin on June 10 and incrementally increase to 25%, if the dispute is not resolved.
The magnitude of the trading relationship with Mexico is significant for the U.S. textile industry, representing $12.2 billion in two-way textile and apparel trade in 2018. The U.S. textile industry alone exported $4.7 billion in yarn and fabrics to Mexico last year and had a net export surplus of $3.8 billion.
As a result, Mexico is the single largest market for U.S.-made textile exports.
“We are very concerned about the impact these proposed tariffs would have on a critical and integrated supply chain for the U.S. and Mexico textile and apparel industries. Under the NAFTA agreement, the U.S. has benefited as a result of strong rules of origin that require the use of regional yarns and fabrics. As a result, the U.S. industry has made significant investment—$22.8 billion from 2006 to 2017—to help grow the manufacturing of fiber, yarns, and fabrics in the United States. NCTO supports the passage of the pending U.S.-Mexico-Canada Agreement (USMCA) because it is a critical trade agreement that will strengthen the industry’s supply chain representing approximately $20 billion in three-way trade,” Glas said.
“Adding tariffs to Mexican apparel imports, which largely contain U.S. textile inputs, would significantly disrupt this industry and jeopardize jobs on both sides of the border,” Glas said. “And as a result, it will accelerate substantially the immigration issues the administration is seeking to address.”
“In addition, this tariff increase would give a significant competitive advantage to China, which already accounts for about 38% of apparel and textile imports to the U.S.” Glas added. “In fact, if this increase goes forward it will drive business back to China at a time when the administration is trying to crack down on intellectual property abuses and make systemic trade reforms that have undermined U.S. manufacturing industries for decades. This proposal is extremely concerning to U.S. textile manufacturers and we will do all we can to amplify these concerns with the administration and members of Congress.”
Mexico and Canada together are the U.S. textile industry’s two largest export markets worldwide. In 2018, the U.S. ran a combined $3.8 billion surplus in textiles and apparel with those two North American Free Trade Agreement trading partners.
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.
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NCTO Comments on 301 Tariff Increase; Renews Call for Tariffs on Textile and Apparel End Items and Need for Exclusion Process
/in Press Releases, Recent News /by Kristi EllisMay 8, 2019
WASHINGTON, DC – The National Council of Textile Organizations (NCTO) appreciates the Trump administration’s action to crack down on unfair trade practices from China through the Section 301 mechanism.
A Federal Register notice, set to be published on Thursday, states the administration’s intent to raise tariffs on $200 billion of imported Chinese goods from 10 percent to 25 percent on May 10. NCTO urges the administration to ensure an expeditious and transparent exclusion process and the inclusion of finished apparel and textile end products to this remedy.
“It’s long past time we address China’s unfair trade practices, particularly relating to intellectual property abuses,” said NCTO President and CEO Kim Glas.
“However, we remain very concerned that finished Chinese textile home furnishings and apparel are not on the administration’s retaliatory tariff list,” Glas said. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs. In order to address the crisis, we need to get to the very heart of the problem.”
According to U.S. government data, China predominantly ships end items to the U.S. versus intermediate inputs. Finished apparel, textile home furnishings and other made-up textile goods equate to 93.5 percent of U.S. imports from China in our sector, while fiber, yarn, and fabric imports from China represent only 6.5 percent.
“NCTO also remains seriously concerned that some inputs critical to the competitiveness of U.S. textile manufacturers remain on the retaliation list and will now face a 25 percent tariff. Duty increases on inputs alone, without addressing the growing problem of end products can raise the cost of U.S. textile manufacturers trying to compete with like Chinese products,” Glas said. “We are pleased that the administration intends to announce an exclusion process and we urge that the process be fair, transparent, and expeditious.”
For more on this issue, see: NCTO Testimony to the Section 301 Committee on August 20, 2018
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.
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NCTO Announces New VP of Communications and Director of Regulatory & Technical Affairs
/in Press Releases /by nctoWASHINGTON, DC – The National Council of Textile Organizations (NCTO) is pleased to announce the appointment of Kristi Ellis as the organization’s new Vice President of Communications, effective April 29, 2019, and Donald Vavala as the Director of Regulatory and Technical Affairs, effective May 2019.
As Vice President of Communications at NCTO, Kristi Ellis will assume responsibility for developing, overseeing, and implementing a communications strategy for the association and the domestic textile industry as a whole. Ms. Ellis brings 24 years of manufacturing and international trade reporting experience with leading publications such as Women’s Wear Daily and S&P Global Market Intelligence. The majority of her career, which includes nearly 10 years as Washington Bureau Chief for Women’s Wear Daily, has been spent reporting on textile trade policy matters. Regarding her appointment, Ms. Ellis said, “I am really excited and grateful to have the opportunity to help develop and shape NCTO’s communications strategy as we work to amplify the textile industry’s importance as a thriving and innovative manufacturing sector in the United States.”
As NCTO’s Director of Regulatory and Technical Affairs, Don Vavala will support all association activities related to federal government procurement and industry regulatory matters. In this capacity, Mr. Vavala will staff various NCTO committees covering a broad spectrum of contracting, technical, and environmental issues. Mr. Vavala comes to NCTO following a 31-year career at W.L. Gore, a NCTO member organization, where he most recently held the position of Director, Military Government Affairs. He will succeed Hardy Poole, who announced his resignation from the same position at NCTO, effective May 2019. Regarding his appointment, Mr. Vavala stated, “I am very excited about the opportunity to work with Ms. Glas and the staff at NCTO. The textile industry is a major component of the economic backbone of this great nation and I look forward to applying my 31 years of experience to insuring that the industry continues to thrive and maintain its status as a significant contributor to our country’s growth and prosperity.”
The hiring of Ms. Ellis and Mr. Vavala coincide with the arrival of Kimberly Glas as NCTO’s President & CEO, effective April 29, 2019. In referencing these two new hires, Ms. Glas stated, “I am excited Kristi and Don are joining the NCTO team at this important time. They both have significant experience with the textile industry and a wealth of knowledge specific to their new roles. Most importantly, both have shown a strong commitment to the success of the domestic textile industry. We are very fortunate to have them join the organization in these pivotal leadership roles. NCTO’s membership will be well served by these important staff additions.”
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.
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NCTO Advisory to the Trade — April 18, 2019
/in NCTO Advisory to the Trade /by David TrumbullThe Berry Amendment
The Berry Amendment
Background
The Berry Amendment is a statutory requirement that restricts the Department of Defense (DoD) from using funds appropriated or otherwise available to DoD for procurement of food, clothing, fabrics, fibers, yarns, other made-up textiles, and hand or measuring tools that are not grown, reprocessed, reused, or produced in the United States. The Berry Amendment has been critical to maintaining the safety and security of our armed forces, by requiring covered items to be produced in the United States. Further, the Berry Amendment has been critical to the viability of the textile and clothing production base in the United States. Some NCTO member companies are direct contractors to DoD and have first-hand knowledge of the Berry Amendment. Others are subcontractors subject to the Berry rules. Others may be interested in learning more about the opportunities that Berry creates for U.S. fiber, yarn, fabric, apparel, and sewn products manufacturers. This brief paper is provided solely for educating the general public about the Berry Amendment as it relates to textiles and clothing. It is not intended to give specific advice in relation to the terms of military contracts.
The History of the Berry Amendment
Since 1790, when President George Washington told the first session of Congress that the “safety and interest” of a free people “require that they should promote such manufactures as tend to render them independent of others for essential, particularly military supplies,” Congress has taken a special interest in the health of the manufacturing sector.
A military domestic sourcing requirement for uniforms was passed by Congress in 1941, as part of the Fifth Supplemental DoD Appropriations Act. Prior to World War II Congress understood war was on the horizon and the original intent of the restriction was to ensure U.S. troops wore uniforms produced in the United States.
In 1952 Congressman Berry of South Dakota introduced an amendment to the DoD’s Buy American restrictions. Prior to Congressman Berry’s amendment only food and certain clothing products were covered in the restrictions. Berry’s amendment expanded the DoD’s Buy American restrictions to cover all clothing, cotton and wool (man-made fibers were subsequently added). The Amendment was included in annual defense spending bills until it was made permanent in Fiscal Year 1994 by section 8005 of Public Law 103-139. It was subsequently codified as 10 U.S.C. 2533a in 2002 by section 832 of Public Law 107-107.
Common Questions about the Berry Amendment
Q. Wouldn’t the taxpayers of the U.S. benefit from giving DoD freedom to acquire textile and clothing from the lowest cost source, even if that means using foreign textiles and clothing?
A. The question is aimed at misdirecting attention away from the reason for the Berry Amendment. As the history above points out, from the founding of our nation, wise leaders have understood that a free people will be free only as long as they can supply their military to maintain that freedom. The 1941 law, which later became the Berry Amendment was passed in recognition of the fact that the U.S. would only be able to win monumental conflicts, such as WWII, if it is not dependent on foreign sources for critical defense materials.
Q. Does the Berry Amendment require the U.S. government to always buy American-made textiles and clothing.
A. No, the Berry Amendment applies to the U.S. Department of Defense only. There is a similar domestic sourcing requirement for the Department of Homeland Security (DHS), it is called the Kissell Amendment. Other U.S. government agencies have more flexibility with regard to acquisitions.
Q. Why just those two, DoD and DHS?
A. Under international trading rules as governed by the World Trade Organization (WTO), countries are normally required to make government procurement contracts open to supply from both domestic and foreign sources. However, these same WTO rules allow countries to restrict military and security procurement to domestic sources, only. Due to their national security role, DoD and DHS qualify for this exception. It is also important to note that in future trade agreements the U.S. needs to continue to reserve the right to require domestic sourcing in the case of the departments that are vital to our national defense — DoD and DHS.
Q. What about textile and clothing articles that DoD purchases for use by foreign defense agencies?
A. The Berry Amendment applies to all funds “made available” to the Defense Department. That includes Department of Defense procurement for a Foreign Military Sale (FMS) where the funds were provided by the customer country. So, for example, when the Afghan government provides money to DoD to acquire uniforms for the Afghan National Police, those uniforms are subject Berry Amendment U.S. sourcing requirements.
Q. Are there any exception to Berry?
A. There are two significant exceptions.
The SAT, or Simplified Acquisition Threshold, sets the base monetary amount at which Berry applies. Acquisitions below the SAT are exempt from Berry. Section 807 of the Ronald W. Reagan National Defense Authorization Act (NDAA) for Fiscal Year 2005 requires an adjustment every 5 years of acquisition-related thresholds for inflation using the Consumer Price Index (CPI). The last such adjustment was in 2010, raising the SAT to $150,000. No inflation-related adjustment has since been implemented. However, the 2018 NDAA ignored the current low rate of inflation and increased the SAT to $250,000.
A DNAD, or Domestic Non-Availability Determination, to the Berry Amendment may be granted if DoD determines that items grown, reprocessed, reused, or produced in the United States cannot be acquired as and when needed in a satisfactory quality and sufficient quantity at U.S. market prices. There is language in the legislative history of the Berry Amendment indicating that Congress intended for Defense agencies to exercise extreme caution in granting waivers, a fact that has been noted by the Government Accountability Office (GAO).
Q. Who can make Domestic Non-Availability Determinations?
A. The seriousness of Congress and the DoD in maintaining the Berry Amendment and protecting it from a proliferation of DNADs is the fact that just a limited number of officials have the authority to issue a DNAD, including The Under Secretary of Defense (Acquisition, Technology and Logistics), The Secretary of the Army, The Secretary of the Navy, and The Secretary of the Air Force.
Q. Where can I find a list of DNADs?
A. There is no list as such, as each determination relates to a particular set of circumstances and does not create a blanket exception to Berry with regard to some input. Questions about DNADs are best directed to the contracting officer.
Conclusion.
Since the days that the Greatest Generation fought to preserve our freedom from threats around the globe, our fighting men and women have been assured that whatever other hardships they may have to bear while protecting us, they would, at least, be assured of clothing, tents, shelters, and other textile products necessary to get the job done. Through all this time, the U.S. textile industry has worked with our military to equip those brave men and women with the highest quality textile products incorporating emerging smart textile technology.
The Berry Amendment
NCTO Advisory to the Trade — April 4, 2019
/in NCTO Advisory to the Trade /by David TrumbullFree Trade Agreement Benefits and YOU
Free Trade Agreement Benefits and YOU
Background
The United States has 14 free trade agreements (FTAs) with 20 nations. Two — NAFTA with Mexico and Canada, and DR-CAFTA with six Central American/Caribbean partners — are regional. The rest are bilateral, meaning they each are between the U.S. and one partner nation. All but two — the agreements with Israel and with Jordan — contain a yarn forward rule of origin that promises, and delivers, potential benefits to U.S. fiber, yarn, and fabric producers who understand the complex rules of each agreement.
This brief paper is intended to give an overview of U.S. free trade agreements as they relate to textile and apparel products. The information presented is meant to serve as a guide. Only the agreement text and the customs regulations issued to implement the agreement are definitive. For complex issues or where interpretation is required, U.S. exporters or importers should seek professional assistance or an advanced ruling from the customs administration in the country to which they are exporting.
Understanding and Benefiting from FTAs
1. First, you must understand that each agreement has its own set of rules, and even within a regional agreement such as NAFTA, the rules may vary slightly from nation to nation. When considering participation in an FTA sourcing program do not assume that because a particular model works within one FTA that it will work in another. For example, say you have been shipping U.S.-made fabric to Colombia for assembly into apparel that will enter the U.S. duty-free. You have been using third-country rayon filament yarn, which is exempt from the yarn forward requirement because no one makes it in the region. Now, say your customer wants to move that operation to Mexico. The apparel would not quality for duty-free entry under NAFTA, because NAFTA has no such exemption for rayon filament. (By the way, the new USMCA, which NCTO supports, amends the rule to reflect the current state of unavailability of filament rayon in the region.)
2. Next, understand that each agreement is a “silo,” with limited exceptions; there is no “mix and match.” For example, you may ship U.S.-made fabric of U.S.-made yarn to Mexico for assembly into tailored apparel containing a lining fabric made in Canada, and that apparel will enter the U.S. duty free. But if you try to do that in, say, the Dominican Republic, the apparel will not qualify for DR-CAFTA because Canada is not part of that agreement.
3. Setting aside the agreements with Israel and Jordan, all the rest of the U.S. FTAs have the yarn forward rule of origin. However, it is important to know (a) how the yarn forward rule applies and (b) what, if any, exceptions there are.
(a) In all cases the yarn forward rule applies to the single fabric component that determines the tariff classification of the article in question. This is referred to as the essential character fabric. Beyond that, some agreements have additional requirements relating to secondary textile components such as linings, narrow elastic fabrics, pocketing, and sewing thread. These rules can vary from agreement to agreement, so never assume that what is permissible in one agreement will be permissible in another. Further, as agreements are revisited to update them for changes in trade flow, and to reflect knowledge gained from seeing how other agreements have worked, these rules may be modified. For example, NCTO was successful in improving the USMCA over NAFTA by adding narrow elastic, pocketing, and sewing thread requirements. These concepts were first introduced in later agreements like CAFTA and have proven to benefit the regional supply chair, including U.S. textile producers.
(b) Each agreement has its own, unique list of exceptions to the yarn forward rule. In “trade-speak” we call them “derogations.” Derogations from the rules of origin may include such things as a cut-and-sew rule for certain very specific articles of apparel, tariff preference levels for a limited quantity of otherwise non-qualifying trade, cumulation with non-partner countries for specific inputs (such as the rule allowing certain nylon filament yarn from Canada, Israel, or Mexico in some FTAs), and a de minimis allowance for a small amount of non-originating fiber or yarn.
Why all this Complexity?
While in some ways it might appear easier to have the same rules for each agreement, there are very sound reasons for this complexity. Each agreement is the result of the compromises reached between the U.S. and the member partner(s); perhaps the U.S. decided to grant a particular concession to one nation in order to bring the negotiation to completion, or as a reflection of historic bilateral trading patterns, that certainly does not justify granting the same concession in another FTA merely for the sake of uniformity. Uniformity would, almost certainly, result in settling on the lowest common denominator and would erode hard-fought gains to require, as much as practical, regional, including U.S.-made, textile inputs to products enjoying FTA benefits.
Conclusion.
The United States is especially well-positioned globally in fiber, yarn, fabric, and non-apparel sewn products markets; it was the world’s second largest individual country exporter of those products in 2018. The most important U.S. export markets by region are our FTA partners, NAFTA ($11.7 billion in U.S. exports) and DR-CAFTA ($3.5 billion in U.S. exports).
NCTO has long supported the yarn forward rule for textiles and apparel, with extremely limited derogations, as the key to creating opportunities for producers throughout the supply chain and reserving the benefits of a given FTA for its signatories. The regional fiber, yarn, fabric, to finished product supply chain offers U.S. textile producers significant opportunities to sell U.S.-made product into FTA markets — provided U.S. textile manufacturers learn how to use these agreements to their advantage.
Free Trade Agreement Benefits and YOU
NCTO Advisory to the Trade — March 28, 2019
/in NCTO Advisory to the Trade /by David TrumbullThe USMCA, Side-by-Side Comparison with NAFTA
The USMCA, Side-by-Side Comparison with NAFTA
Background
In talks launched in August 2017, the Trump administration initiated a renegotiation of the North American Free Trade Agreement (NAFTA) with the aim of improving the deal to better serve American manufacturing interests. NCTO supported the renegotiation effort as a means to modernize the 24-year-old agreement and make common sense updates designed to bring more employment, production, and investment back to U.S. manufacturing sectors such as textiles. Specifically, NCTO advocated for the following improvements as part of the NAFTA renewal negotiation.
We are pleased that the majority of our stated objectives were accomplished in the agreement reached between the parties late last year under what has come to be known as the United States-Mexico-Canada Agreement (USMCA). Especially the fact that the basic yarn forward rule was preserved as the origin requirement for duty-free treatment.
What Does This Means for the U.S. Textile Industry?
The USMCA was signed by all three countries on November 30, 2018. Before it can take effect the legislative bodies of each of the three nations must enact it into law. In anticipation of USMCA going into effect, a number of NCTO member companies have inquired how the new agreement may affect their current regional manufacturing and trading arrangements. The side-by-side presentation below addresses some of the topics of most direct interest to U.S. textile manufactures. It is not intended to be an exhaustive analysis of all the changes from NAFTA to USMCA.
1. General Rules of Origin
2. Tariff Preference Levels (TPLs)
Mexico to U.S., 1 million kgs
(49% reduction)
with 3 million kg sub-limits for acrylic and non-acrylic yarns eachMexico to U.S. 700,000 kg
(30% reduction)
Canada to U.S., 38.6 million sme wovenMexico to U.S. 18 million sme knit
Mexico to U.S. 6 million sme woven
Canada to U.S. 38.6 sme woven
(both unchanged)Mexico to U.S. 18 sme knit (unchanged)
Mexico to U.S. 4.8 sme woven
(20% reduction)
Mexico to U.S. 45 million sme
(55% reduction)Mexico to U.S. 45 million sme
(unchanged)
with a 5 million sme sub-limit for suitsMexico to U.S. 1.5 million sme
(25% reduction)
with a 4 million sme sub-limit for suits (24% reduction)Mexico to U.S. 1.5 million sme (unchanged)
3. De Minimis: For textile and apparel goods classified in Chapters 50 through 63, the de minimis amount for non-qualifying fibers and yarns was increased from 7% under NAFTA to 10% under the USMCA by weight of the component of the good that determines its tariff classification. Within the overall 10% cap, the total weight of elastomeric content may not exceed 7%.
4. Other Changes
(a) The three countries agreed to amend the rules of origin under the USMCA to allow for the use of viscose rayon staple and filament and yarns of jute and hemp from outside the USMCA region due to lack of availability from North American producers.
(b) USMCA closed the Kissell Amendment loophole allowing textiles and clothing purchased by the Transportation Security Administration (TSA) to be made in Mexico. Under the new agreement, these goods will have to be assembled in the United States with 100% U.S.-made inputs, including all fiber, yarn, and fabric.
(c) The new agreement contains a textile-specific chapter and enhanced textile Customs enforcement language.
The USMCA, Side-by-Side Comparison with NAFTA
2019 State of the U.S. Textile Industry Address
/in Press Releases, Recent News /by nctoWASHINGTON, DC – Outgoing 2018-19 National Council of Textile Organizations (NCTO) Chairman Marty Moran delivered the trade association’s 2019 State of the U.S. Textile Industry overview at NCTO’s 16th Annual Meeting on March 21st at the Capital Hilton in Washington, DC.
Mr. Moran’s speech outlined (1) U.S. textile supply chain economic, employment and trade data, (2) the 2019 policy priorities of domestic textile manufacturers, and (3) other NCTO activities.
A link to his remarks as prepared for delivery are included in this press statement along with a link to a data infographic prepared by NCTO illustrating the current economic status of the U.S. textile industry.
Mr. Moran is CEO of Buhler Quality Yarns, Corp., a fine-count yarn supplier headquartered in Jefferson, Georgia with plants and/or offices in America, Europe, the Middle East and Asia.
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.
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NCTO Elects North Carolina Manufacturing CEO as 2019 Chairman
/in Press Releases, Recent News /by nctoWASHINGTON, DC – The National Council of Textile Organizations (NCTO) held its 16th Annual Meeting March 19-21 in Washington, DC. Elected as NCTO officers for 2019 are:
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.
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Made in the USA: inside one company’s all-American supply chain
/in Press Releases /by nctoClick to below to read the article:
Made in the USA: inside one company’s all-American supply chain
FT Magazine Life & Arts, February 21, 2019, Rana Foroohar
NCTO Advisory to the Trade — March 7, 2019
/in NCTO Advisory to the Trade /by David TrumbullPresident Donald J. Trump’s Trade Policy Agenda
President Donald J. Trump’s Trade Policy Agenda
Background
On March 1, 2019, U.S. Trade Representative Robert Lighthizer delivered President Trump’s Trade Policy Agenda and Annual Report to Congress, outlining how the Administration’s trade policies are benefitting American workers and contributing to the strongest economy in decades.
“Thanks to President Trump’s leadership, the United States is pursuing trade policies that are more favorable to American workers,” said Ambassador Lighthizer. “These actions are contributing to a stronger U.S. economy, which has generated more jobs and higher wages for American workers,” continued Lighthizer.
To continue these economic gains, in 2019 the Trump Administration has announced it will —
What Does This Means for the U.S. Textile Industry?
The four priorities set forth above by the Administration are shared by the domestic U.S. textile industry.
Conclusion
The timing of the release of the President’s 2019 Trade Policy Agenda — two weeks before the NCTO Annual Meeting in Washington, D.C. — couldn’t be better. Policy-makers from the highest levels of the Administration will be present to speak to NCTO members, and also, to hear from NCTO members about these important trade policies that directly affect U.S. textile production and employment.
President Donald J. Trump's Trade Policy Agenda