Trade update - February 2017

The last few months have been unprecedented in terms of the number of events that will have profound impacts on international trade. These developments will affect the apparel and textile industries and more importantly will introduce a new degree of uncertainty in 2017. 

We have seen the signing of the Canada – EU Comprehensive Economic and Trade Agreement (CETA), the status of the Trans Pacific Partnership (TPP) and a threat to by the US President-elect to renegotiate NAFTA --- all these developments point toward a period of substantial change – as established agreements are challenged, new agreements are implemented and future agreements take shape. 

In order to help our members understand and anticipate these changes CAF will be holding a webinar March 2, 2017  We will try to put these events in context and outline how the association will be working over the coming year to protect the interests of members. The webinar will cover a wide range of issues including:

CETA

We will provide an overview of the implementation process, rules of origin and related provisions.   We will also cover specific mechanisms which allow Canadian exporters to use third country fabric (meaning fabric from outside Canada or the European Union) their garments. Canada and the European Union have agreed on “provisional implementation” and it is important understand what that means and the pace of implementation in 2017. Some of these issues have been covered in previous international trade updates.

NAFTA

With the election of a  Presidential candidate opposed to trade liberalization in general and NAFTA in particular, Canadian industry needs to be prepared for demands  to renegotiate different aspects of NAFTA even as we implement CETA.  

Despite some promising diversification in recent years, over 80% of our apparel and textile exports continue to be shipped to the United States.  While most of the attention of the president-elect has been focused on Mexico, any effort to renegotiate NAFTA would necessarily raise potential for the new administration to address long-standing complaints from the US textile industry about provisions such as the Tariff  Preference Levels (TPL’s)  covering certain Canadian exports to the US.

Post – TPP

President-elect Trump’s decision not to proceed with the TPP (and a commitment to make withdrawal from TPP a day one executive action) will have a variety of impacts. Canada and other Pacific countries are already evaluating whether they want to pursue specific bilateral trade agreements or work more closely with another regional trading block, led by China.  In addition the collapse of TPP may have a significant impact on other trade issues such as tariffs.

We will cover all these issues in our upcoming webinar. We have not yet confirmed the date.