Trade & Policy Round-Up for June
Below is a collection of stories related to trade and government policy that may impact the sewn products industry around the world.
Uyghur Forced Labor Prevention Act Takes Effect
As a reminder, the U.S. ban on imports of all goods made in China’s Xinjiang Uyghur Autonomous Region will take effect next week on June 21st. U.S. Customs and Border Patrol (CBP) has released an importer guidance (available here) to assist the trade community in preparing for the new rule. CBP will also host a webinar on Thursday, June 16th, to provide an overview of the policy. Learn more and register here.
Related: In April, Canada’s Federal Court rejected an application from activists to overturn a Canada Border Services Agency decision not to enact a general ban on the Canadian importation of all goods from the Xinjiang region. Is that a triple negative? Read more.
Congress Passes Ocean Shipping Reform
On June 13th, the U.S. House of Representatives passed the Ocean Shipping Reform Act of 2022 (S.3580), a bill seeking to revise provisions related to ocean shipping policies and support the growth and development of U.S. exports. Among other things, the legislation would limit detention and demurrage fees, empower the Federal Maritime Commission to investigate unreasonable practices by ocean carriers, and improve valuable data collection and reporting requirements. The U.S. Senate previously voted to pass the bill back in March, so the next step will be for President Biden to sign it into law, something he has already said he plans to do. The legislation has been publicly supported by many in the apparel, retail, and manufacturing industries.
Section 301 Tariff Exclusions Extended for Medical Products On May 27th, the Office of the U.S. Trade Representative (USTR) announced the further extension of Section 301 tariff exclusions for 81 medical care products needed to address the Covid-19 pandemic. The exclusions were previously scheduled to expire on May 31, 2022, and will now be extended for an additional six months, through November 30, 2022. More information is available in the Federal Register Notice. (However, the product list can be found in Annex B of this previous notice.)
Note: In addition to the exclusion extension, there has been a lot of news lately surrounding the U.S. Special 301 tariffs on Chinese products. We couldn’t fit it all in this update, so click here to learn more.
USDA Assistance for Cotton and Wool Apparel
The U.S. Department of Agriculture’s Cotton and Wool Apparel (CAWA) Program is providing $50 million in pandemic assistance for eligible apparel manufacturers of worsted wool suits, sport coats, pants, or Pima cotton dress shirts; Pima cotton spinners; and wool fabric manufacturers and wool spinners. Applications are due Friday, June 17th. Read more.
New Indo-Pacific Framework On May 23rd, the United States, Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, The Philippines, Singapore, Thailand, and Vietnam launched the Indo-Pacific Economic Framework for Prosperity to “advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies.” Specifically, the participants will begin engaging in discussions on trade; supply chains; clean energy, decarbonization, and infrastructure; tax and anti-corruption. Fiji has also since joined.
Politically, the framework is not only a step toward strengthening ties between the U.S. and the Indo-Pacific region, it is also a way for the U.S. to counterbalance China’s stronghold in the region. Meanwhile, analysts predict China will “likely respond to the U.S. on any of its future Asia-Pacific economic forays by expanding its economic dominance in the region and growing its trade under the RCEP.” The Regional Comprehensive Economic Partnership (RCEP) consists of 15 nations in the Asia-Pacific region and is currently the world’s largest trade agreement. Read more.
EU Reaches Agreement on Single Window for Customs The European Council and Parliament reached a provisional agreement in May on a single window for customs to make international trade easier. Once fully implemented, the single window system will allow customs authorities to automatically verify that cross-border goods comply with EU requirements, and businesses will no longer have to submit documents to several authorities through different portals. Following its formal adoption, the intergovernmental component of the Single Window will come into effect by 2025. Read more.
UK Delays Post-Brexit Import Controls The United Kingdom will delay the introduction of planned import control checks on goods from the European Union until the end of 2023. The decision was made to avoid increasing inflation on consumer goods. The UK was meant to implement its own border controls after leaving the EU, but has delayed implementation multiple times as supply chains continue to take one hit after another.
UK, EU Suspend Tariffs for Ukraine As the conflict in Ukraine continues, both the UK and the EU have agreed to temporarily suspend import duties on Ukrainian products to help support the Ukrainian economy. The U.S. has also announced it will suspend tariffs on Ukrainian steel imports.
India Removes Anti-Dumping Duty on Spandex Yarn The Indian government has removed anti-dumping duties (ADD) on Elastomeric Filament Yarn, commonly known as spandex yarn. The ADD was put in place in 2017 to protect domestic manufacturers. However, the government has noted that market dynamics have changed in the last five years and removing the ADD now will further support India’s textile and apparel industries. Read more here or here.
SEC Comment Period Extended As we previously shared, the U.S. Securities and Exchange Commission (SEC) has proposed a rule that would require public companies to disclose climate-related information. Public comments on the rule were previously requested in May, but the deadline has been extended to June 17th. More information on how to submit comments is available here. Read more.
New York Legislature Votes to Ban PFAs in Apparel
At the end of May, the New York State Legislature passed a bill prohibiting the use of perfluoroalkyl and polyfluoroalkyl (PFA) substances in apparel, as they may be harmful to human health and the environment. The bill refers to apparel used for “regular wear,” and excludes professional uniforms and outerwear intended for extreme conditions. While banning PFAs is not totally unexpected — several other states are exploring similar initiatives for a variety of products — there is some concern that the bill’s proposed effective date of December 31, 2023, does not provide companies with sufficient time to comply. The bill still needs to be signed by New York’s Governor before it becomes law.
Trade Agreement Updates
Let’s take a quick look at some of the trade maneuvers happening around the world:
The India-UAE Comprehensive Economic Partnership Agreement, which was signed in February, officially entered into force May 1st. Read more.
Israel and the United Arab Emirates signed a free trade agreement at the end of May, which the Israeli Prime Minister has hailed as historic: “the first of this scope to be signed between Israel and an Arab state.” Read more.
The UK and Mexico have launched negotiations for an official bilateral free trade agreement that would take the place of the parties’ current arrangement based on an EU-Mexico trade agreement negotiated more than 20 years ago. Read more here or here.
The recently announced U.S.-Taiwan Initiative on 21st-Century Trade is intended to develop concrete ways to deepen the two parties’ economic and trade relationship and promote innovation and inclusive economic growth. Read more.
Want to learn more about free trade agreements in the United States? Summaries of the provisions and rules specific to textiles, apparel, footwear, and travel goods can be found on the International Trade Administration’s Office of Textiles and Apparel (OTEXA) FTA page. You can also quickly find tariff and rule of origin information for specific products using the FTA Tariff Tool.