Mexican textile sector favors 'yarn forward' rule in TPP

03 Sep '13

2 min read

The textile sector in Mexico is favoring application of ‘yarn forward’ principle in the Trans-Pacific Partnership (TPP), for which the 19th round of negotiations concluded last week in Brunei.

Moises R. Kalach B, president of the National Chamber of Textile Industry (CANAINTEX) said the ‘yarn forward’ principle, currently followed in the Treaty of Free Trade in North America (NAFTA) provides that apparel having certificate of origin from the NAFTA region must be made using yarn and fabric manufactured in the US, Canada or Mexico.

If this rule is replicated in the TPP, it will not affect the Mexican domestic textile industry, Moises said, Mexican magazine Manufactura reported.

If the ‘yarn forward’ rule is not applied in TPP, then it will benefit countries like Vietnam, which will be able to export its apparel, made using imported yarn and fabric, duty-free to other TPP countries, and this will greatly affect the Mexican textile industry, Moises added.

The textile and clothing chain in Mexico employs about 500,000 people, and it earns about US$ 9 billion annually in foreign exchange, while the Vietnamese garment and textile industry exports US$ 17 billion worth of goods and provides employment to 2.2 million people.

The 12 countries negotiating the TPP agreement are the US, Canada, Mexico, Japan, Chile, Peru, Malaysia, Singapore, Brunei, Vietnam, Australia, and New Zealand. These countries spread across three continents account for about 40 percent of global GDP and about 30 percent of international trade.

According to Mexican Confederation of Industrial Chambers (CONCAMIN), the participation of Mexico in the TPP agreement is of great importance, as it would strengthen the integration of Mexico in the North American region through the use of Mexican inputs in the manufacture of goods in the United States and other countries, which will then be exported to TPP members.

At the same time, the trade agreement would give an access for Mexican products to some of the countries with which it has not signed free trade agreements, particularly to the countries of Asia.

Fibre2fashion News Desk - India

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