Interviews
Pakistan Roz Program to include apparel & textile products – AAFA
23 Jun '09
5 min read
We also urge Congress to revisit the limited areas in Pakistan that are eligible to use the ROZ program. Limiting ROZs to extremely remote areas that are experiencing intense conflict and are not yet mature for industrial growth would only delay job creation. Therefore, we encourage you to consider expanding the geographic areas in Pakistan to include areas that are currently capable of production. All of Pakistan, not just the tribal areas on the Northwest Frontier, is being targeted by extremists.
Another area of concern in S. 496 is the disclosure requirements. We agree that transshipment is a legitimate concern, and we support the effective and time-proven anti-transshipment provisions that exist in other trade preference programs like the African Growth and Opportunity Act (AGOA). However, S. 496 goes way beyond those provisions and requires extensive disclosure of sensitive and proprietary information. For example, the legislation requires the disclosure of the names of all owners, directors, officers, suppliers, and U.S. customers of ROZ entities. This raises significant proprietary information concerns because companies do not want to reveal their sourcing strategies to competitors.
S. 496 also requires Pakistan and Afghanistan to compile a list of names and addresses of all participating entities. Such a list would surely become a target list for America's enemies in the region. S. 496 incorporates key criteria for determining eligibility, including countries' commitments to internationally-recognized labor rights, consistent with the Generalized System of Preference (GSP) and other preference programs repeatedly reviewed and approved by Congress.
Unlike S. 496, however, the House bill seeks to impose highly onerous labor criteria that would undermine the ability of this program to produce the much-needed economic growth in this region. The labor provisions in the House bill go far beyond the GSP program, are unworkable, particularly given the unique security considerations that will be encountered in the region, and will only serve as a further disincentive for companies to use this program. Therefore, we strongly urge that S. 496 be the model for any labor provisions included in the final legislation.
Moreover, the pay-for mechanism in the House-passed bill would actually increase the cost of doing business in non-ROZ areas of Pakistan. This is contrary to the goal of bringing greater job creation to this critically important region, and would raise questions about possible conflict with World Trade Organization rules regarding most-favored-nation treatment for those areas of Pakistan that are not eligible for ROZ investment. Penalizing one part of Pakistan to benefit another is a terrible precedent in a trade preference program.
The United States has an important opportunity to send a tangible message to the people of Afghanistan and Pakistan with this initiative. We have a chance to create real employment that counters the recruitment efforts of extremist groups in both countries. But that is possible only if the product scope, geographic coverage, disclosure, labor, and pay-for provisions of the ROZ program reflect the realities in the region. We encourage you to make these important revisions so we can translate the U.S. vision into real economic development to support U.S. and regional stability.
Another area of concern in S. 496 is the disclosure requirements. We agree that transshipment is a legitimate concern, and we support the effective and time-proven anti-transshipment provisions that exist in other trade preference programs like the African Growth and Opportunity Act (AGOA). However, S. 496 goes way beyond those provisions and requires extensive disclosure of sensitive and proprietary information. For example, the legislation requires the disclosure of the names of all owners, directors, officers, suppliers, and U.S. customers of ROZ entities. This raises significant proprietary information concerns because companies do not want to reveal their sourcing strategies to competitors.
S. 496 also requires Pakistan and Afghanistan to compile a list of names and addresses of all participating entities. Such a list would surely become a target list for America's enemies in the region. S. 496 incorporates key criteria for determining eligibility, including countries' commitments to internationally-recognized labor rights, consistent with the Generalized System of Preference (GSP) and other preference programs repeatedly reviewed and approved by Congress.
Unlike S. 496, however, the House bill seeks to impose highly onerous labor criteria that would undermine the ability of this program to produce the much-needed economic growth in this region. The labor provisions in the House bill go far beyond the GSP program, are unworkable, particularly given the unique security considerations that will be encountered in the region, and will only serve as a further disincentive for companies to use this program. Therefore, we strongly urge that S. 496 be the model for any labor provisions included in the final legislation.
Moreover, the pay-for mechanism in the House-passed bill would actually increase the cost of doing business in non-ROZ areas of Pakistan. This is contrary to the goal of bringing greater job creation to this critically important region, and would raise questions about possible conflict with World Trade Organization rules regarding most-favored-nation treatment for those areas of Pakistan that are not eligible for ROZ investment. Penalizing one part of Pakistan to benefit another is a terrible precedent in a trade preference program.
The United States has an important opportunity to send a tangible message to the people of Afghanistan and Pakistan with this initiative. We have a chance to create real employment that counters the recruitment efforts of extremist groups in both countries. But that is possible only if the product scope, geographic coverage, disclosure, labor, and pay-for provisions of the ROZ program reflect the realities in the region. We encourage you to make these important revisions so we can translate the U.S. vision into real economic development to support U.S. and regional stability.
American Apparel & Footwear Association
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