The parameters of free trade between nations have been in flux. The U.S- China trade war continues to leave an air of uncertainty amongst the countries. Although, despite not having waved the white flag, the U.S is attempting to forge other agreements. At the end of 2018, the United States-Mexico-Canada Agreement (USMCA) replaced NAFTA. Also, the U.S President Donald Trump sat down with Japan’s Prime Minister Shinzo Abe. Now, talks of free trade with the European Union is on the agenda.
In fact, the concern over Brexit has given the European Union more determination to forge an agreement with the world’s largest economy. Issues regarding trade had taken the precedent. A few years ago, then-U.S. President Barack Obama proposed the Transatlantic Trade and Investment Partnership, or TTIP. However, the deal never got too far.
Free trade would open the door to growth for many industries. Although, the fashion industry would be a significant beneficiary. The sector hopes that this will be a priority for the government. Above all, fashion was struck by trade uncertainty and rising costs of doing business. The Business of Fashion reported that “In the US, the fashion industry accounts for 6 percent of imports but pays 51 percent of tariff receipts.”
Benefits of a Deal with the European Union
Apparel News shared that “In 2017, the United States exported $2.6 billion in textiles and apparel to the European Union while importing $5.5 billion in textiles and apparel from the EU.” Europe is the epicenter of fashion, especially at the luxury level. In turn, fine fabrics, leathers, and finished goods are all hit with significant duty costs when imported. Ilse Metchek, president of the California Fashion Association, told Apparel News, “If you are going to a textile show such as Première Vision in France, you have to figure in how much extra it would cost for duties.”
To Get to the Negotiating Table
The U.S is actually behind the curve regarding a deal with the European Union. Domestic manufacturers are at a disadvantage in comparison. South Korea, Japan, and Mexico all have free-trade agreements with the European Union. This deal would not only be an advantage to the apparel industry but others as well. Ultimately, this fact adds to the urgency to get each party to the negotiating table.
Apparel Textile Sourcing is coming to the EU! Join us in Berlin, Germany on September 11th-13th-2019. Learn more and register here.