Pakistan Roz Program to include apparel & textile products – AAFA

23 Jun '09

5 min read

Joined by seven other trade groups, the American Apparel & Footwear Association (AAFA) sent a letter to members of the Senate Finance Committee regarding the Pakistan Reconstruction Opportunity Zones (ROZ) program.

Seven trade groups:
• Fashion Accessories Shippers Association (FASA)
• National Foreign Trade Council (NFTC)
• National Retail Federation (NRF)
• Retail Industry Leaders Association (RILA)
• Travel Goods Association (TGA)
• U.S. Association of Importers of Textiles and Apparel (USA-ITA)
• United States Chamber of Commerce

MEMBERS OF THE SENATE FINANCE COMMITTEE: Write to express our strong support for meaningful trade preferences for Afghanistan and Pakistan. However, we are deeply disappointed with H.R. 1886, the Pakistan Enduring Assistance and Cooperation Enhancement Act of 2009 (PEACE Act of 2009), which the House passed on June 11th to create Reconstruction Opportunity Zones (ROZ) along the Pakistan-Afghanistan border. When the Senate takes up this legislation, we strongly urge that the Senate start with S. 496, introduced by Senator Maria Cantwell, and expand and revise it in several areas to ensure that the ROZ program is not a hollow gesture to the people of Afghanistan and Pakistan.

The ROZ program represents a critical opportunity for the United States to foster economic development and social stability in the region and to make good on the promise of a closer economic relationship with Pakistan and Afghanistan. As currently drafted in both the House and the Senate, however, the ROZ program represents only symbolic assistance for Pakistan and Afghanistan. Much has changed both politically and economically since the ROZ program was first crafted by the Bush Administration more than two years ago.

Yet the pending legislation is essentially unchanged, gerrymandering coverage to match a China quota agreement that no longer exists, and blocking benefits for those products that Pakistan is best positioned to produce. The Congress should update the proposal to reflect the world today, where there are no quotas, Asian suppliers are in fierce competition for sales to the U.S. market and security conditions in the region have grown worse.

For the ROZ initiative to be effective, duty-free treatment must be extended to all textile and apparel products, and especially to cotton trousers and shorts and cotton knit tops. These products are most likely to generate employment opportunities. Cotton knit shirts and cotton trousers are vitally important to Pakistan, yet these products face U.S. duties that average around 17 percent. Configuring the ROZ program to include these items will give Pakistan a fighting chance in this competitive industry. Moreover, U.S. producers are not at risk from apparel exports from Pakistan; it is the other Asian producers who compete with Pakistan. Cotton knit shirts and cotton trousers from Pakistan represent a mere 3.6 percent oftotal U.S. imports of these products.

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