Free Trade With Chile and Singapore ApprovedCongress has approved free trade pacts with Chile and
Singapore that, for the first time, extend preferential trade agreements to Asia and South American
nations. The agreements, which take effect January 1, 2004, will eliminate tariff and non-tariff
barriers to trade between the US and those nations. US Trade Representative Robert B. Zoellick said
the strong congressional support for the agreements is important recognition by the Congress of the
positive role that trade plays in growing Americas economy. He said the free trade agreements are
an important part of the administrations efforts to expand trade globally, regionally and
bilaterally.While Zoellick praised the agreements and emphasized the need for additional free trade
agreements, not everyone is all that excited about them. Organized labor, including the textile
union UNITE, have attacked the agreements saying they will result in US job losses, and they fail
to protect labor rights, including freedom of association, freedom to bargain collectively, freedom
from child labor and other provisions which unions feel are important.US textile manufacturers see
some opportunities for expanded trade, as both agreements include a yarn-forward rule of origin
that requires that products receiving preferential treatment to be made of yarn and fabric produced
in the participating countries. They were disappointed, however, that the agreements contain Tariff
Preference Levels (TPLs) that extend preferential treatment to specific levels of products made of
yarn and fabric manufactures in other countries. US importers of textiles and apparel were opposed
to the yarn-forward rule of origin, since they believe it will restrict trade, but they say the
TPLs will help somewhat. Under the Singapore agreement, 25 square meters of fabric and yarn made in
other countries can receive preferential treatment, but that level of trade will be phased out over
five years. The Chilean agreement permits TPLs of 1 million square meters of fabric and 2 million
square meters of cotton and man-made fiber apparel in the first year, and those levels, likewise,
will be phased out over five years.By James A. Morrissey, Washington Correspondent
August 2003
