Tradeology, the ITA Blog

Joshua Teitelbaum is ITA’s Deputy Assistant Secretary for Textiles, Consumer Goods, and Materials.

With the Trans-Pacific Partnership (TPP) eliminating more than 18,000 foreign taxes on Made-in-America exports, it’s no secret that the TPP will bring major opportunities for American manufacturers. This includes one of the most important U.S. export industries: Textiles and Apparel.

In fact, in 2014, the United States exported more than $8.5 billion globally in technical textiles, which are textile products used primarily for their performance qualities rather than their appearance. Technical textiles include seat belts, surgical gowns, and industrial filters, among many other items.

Under the TPP, Japan—which maintains duties on our technical textiles exports as high as 8.2 percent and is our fifth largest export market for these products—will eliminate nearly all of their duties on our technical textiles exports immediately. Eliminating these foreign taxes on U.S. products is how we boost U.S. manufacturing and support American textile workers.

In addition, by setting new, high-standard global trade rules, TPP puts American workers first. These high standards include the strongest enforceable labor standards of any trade agreement in history. The new agreement also supports U.S. manufacturing, especially by small- and medium-size enterprises (SMEs), by streamlining customs processes, facilitating greater transparency in rules, and preventing unfair competition from state-owned enterprises.

While 98 percent of U.S. exporters are small businesses, less than five percent of U.S. businesses sell their goods and services to markets overseas. Thankfully, the new agreement is an opportunity to boost exports and make it easier for more SMEs to do business abroad. For the first time in any trade agreement, TPP includes a dedicated chapter on small- and medium-sized businesses that focuses on how these companies can benefit from trade.

Recently, the Industry & Analysis division in the International Trade Administration produced a series of market assessment tools for U.S. exporters called Top Markets Reports. As we prepared these reports, our research revealed that competition in the global market for technical textiles is very strong. In the reports, some industry highlights for TPP partner countries include:

• Canada continues to be an attractive export market for U.S.-made technical textiles, especially for companies that are new-to-export and/or new-to-market. The Canadian market is the second largest market for U.S. exports of textiles and apparel. Due to proximity, similar business cultures, and a high receptivity for U.S.-made products, there is a high volume of bilateral trade between the United States and Canada.Similar to the United States, Canada has experienced an economic shift in its textile industry. This shift has moved away from manufacturing traditional high-volume commodity textile products to developing and manufacturing technical textiles.

• Mexico is the United States’ largest market for textiles and apparel. The size of Mexico’s textile and apparel sector coupled with its proximity to the United States and the flexibilities afforded to U.S. exporters through NAFTA, ITA expects continued investment in all four technical textile sectors— non-woven, medical, protective, and specific/industrial —and continued growth into the future.

• Vietnam’s textile and apparel industry is growing faster than that of many of its regional competitors. The Vietnamese textile industry has more than 3,800 companies. Foreign companies are starting to pour more money into Vietnam to take advantage of potential economic opportunities from future free trade agreements. Over the past several years, Vietnam’s textile and apparel industry has benefitted from increased foreign investment. Because of this consistent growth, U.S. companies will have the chance to increase their exports of technical textiles to more consumers and businesses in Vietnam.

To learn more about this growing industry, the impact TPP will have on it and how to take your business global, please contact one of our local offices.