April
30, 2004
Ms. Marilyn R.
Abbot
Secretary
U.S. International Trade
Commission
500 E Street, SW –
Room 112
Washington,
DC
20436
RE:
U.S.-Morocco
FTA: Potential Economywide and Selected Sectoral
Effects,
Inv.
No. TA-2104-14
Ms.
Abbot:
The National Council
of Textile Organizations (NCTO) welcomes this
opportunity to submit comments regarding the recently
concluded U.S.-Morocco Free Trade Agreement (FTA), which
is the subject of the following ITC
investigation:
U.S.-Morocco FTA: Potential Economywide and Selected
Sectoral Effects, Inv. No.
TA-2104-14.
By
way of background, NCTO is a new group designed to
represent the entire unified spectrum of the
U.S.
textile sector, from fibers to finished products, from
machinery and chemical manufacturers to power
suppliers.
NCTO is comprised of four separate councils
representing the fiber, fabric, supplier and yarn
industries, each with its own board representation and
each with a stake in the prosperity and survival of the
U.S.
textile sector. NCTO is obviously very interested
in the details of the proposed free trade agreement with
Morocco
and would like to share our views and concerns with the
Commission.
The unified textile
industry has consistently urged that the benefits of
free trade agreements must accrue only to those
countries which are actual parties to the
agreement.
In a simple phrase, there must be no third party
“free riders” who realize benefits without making any
sacrifices of their own.
Viewed in this
light, we are very concerned that, while the
U.S.-Morocco FTA ostensibly contains a yarn-forward rule
of origin, this requirement is completely undercut and
in fact negated by a tariff preference level (TPL) that
is overly generous and unnecessary.
April 30,
2004
NCTO Comments:
Inv.
No. TA-2104-14
Page 2 of
2
By granting
Morocco the ability to
utilize as much as 30 million square meter equivalents
(SMEs) of third country textile inputs, the
United
States’ negotiators have
basically rendered the rule of origin worthless. Indeed, we find
it amazing that the USTR fact sheet on the agreement
says that the rule of origin will promote “new
opportunities for U.S. and Moroccan fiber, yarn, fabric
and apparel manufacturing, “ yet in the very next
sentence the USTR admits that the agreement includes a
30 million square meter allowance for apparel containing
3rd country content.
Morocco only shipped less
than 16.5 million SMEs worth of textile goods to the
U.S. in 2003. Therefore, this
30 million SME gift to third country textile producers
is nearly twice the amount of total imports from
Morocco last year. This is totally
unwarranted and will harm
U.S. textile producers
as well as Moroccan makers of yarn and fabric who will
find Moroccan apparel makers turning to Asian producers
for their raw inputs.
At last count,
Morocco’s textile and
apparel sector employed over 200,000 workers, giving it
an already significant production capability. Even without the
massive TPLs in this agreement, an FTA with
Morocco would likely result
in reduced production and employment in the
U.S. textile
industry.
And allowing Morocco garment makers to utilize
yarn and fabric from China, India, Pakistan, Bangladesh,
Vietnam and other low-cost Asian producers will only
exacerbate that damage, as well as displace textile and
apparel imports from Mexico, Canada and the Caribbean
Basin, which are important U.S. exports markets for
yarns and fabrics.
Accordingly, the
National Council of Textile Organizations views the
U.S.-Morocco FTA as one that will cause further harm to
the U.S. textile industry,
which has already lost some 206,000 jobs over the past
five years.
If you have any
questions, please let me know.
Sincerely,
Cass
Johnson
President
