On November 30th, 2018, all three North American leaders signed the United States-Mexico-Canada Agreement (USMCA) into effect. Bringing jobs to America and preventing further outsourcing is the primary objective of the new trade agreement. So far, regulations to the farming, manufacturing, and service industries have been at the forefront of the pact. Although, these aren’t the only industries seeing changes. The textile industry will see new regulations instated around the year 2020.
USMCA is now responsible for the most substantial change to the North American Textile trade in recent history, according to the Global Apparel Forum. The agreement includes a new chapter purely based on the rules of origin. There will also be a committee instated to update the deal, decide on “textile-specific verification and customs cooperation provisions.” The goal of promoting domestic production within USMCA will guide the development of the regulations.
Harmonized System Designation
Due to new regulations, for a product to meet the requirements for free trade, it must be comprised of mostly North American material. The specifics of this requirement varies according to the product, as decided by the “Harmonized System” designation. Also, it must not have more than 10% of its total weight be from non-originating fibers. The elastomeric content cannot go over 7 percent.
To meet these standards, developers must reduce the use of finishing fabrics that originate out of North America. The pact aims to “Limit the inclusion of finishing fabric in the form of sewing thread, pocketing fabric, narrow elastic bands, and coated fabric,” that originates from regions outside of the free trade zone. These materials fall under the same regulation of the Harmonized System.
other USMCA REgulations
The Harmonized System of the USMCA is the most significant departure from NAFTA. In the agreement, a few new regulations made the cut such as:
- Textiles and apparel with that were cut and sewn in the U.S but exported to Mexico for, “bleaching, garment dyeing, stone washing, acid-washing or permapressing” won’t be subject to duties when re-imported.
- Apparel or textiles will still be “considered originating despite the inclusion of rayon filament or rayon fiber other than lyocell or acetate.”
- “‘Indigenous handicraft goods’ produced within the USMCA region” will be exempt from tariffs.