The largest US retail associations called on new Trade Representative Robert Lighthizer to support the North American FTA aiming to salvage an accord that has come under fire from his boss. Leaders of the American Apparel and Footwear Association, the National Retail Federation, Retail Industry Leaders Association and US Fashion Industry Association sent a letter to Lighthizer on urging him to tread lightly on the 23-year-old pact.
Lighthizer was sworn in, clearing the way for the administration to seek an overhaul of NAFTA. President Donald Trump called the treaty a “disaster” during the election campaign and has threatened to withdraw from the agreement with Mexico and Canada if renegotiated terms aren’t favorable enough.
In a draft letter circulated in March that laid out its goals, the administration told lawmakers it wanted to strengthen the US manufacturing base and “level the playing field” with its NAFTA trading partners on tax treatment. Retailers, which rely heavily on imports, have opposed any changes that would tax imports at a higher rate.
Steve Lamar, Executive VP of the AAFA, in an earlier interview had said the company’s approach is if you look across the textile, apparel and footwear industry, there’s a broad consensus that NAFTA works that it creates jobs that supports workers and communities on both sides of the border.
Jonathan Gold, VP of supply-chain and customs policy at the NRF pointed out saying the ultimate concern for the business community at large is failure to come to a deal that ends in the US pulling out of NAFTA. An imperiled NAFTA comes during a challenging time for apparel retailers. Falling prices, increased competition and a lack of style trends have made it harder for clothing companies to maintain sales and profit.
If the trade deal changes, apparel trade groups say the industry could be faced with rising costs and another blow to its already-fragile profit margins. Mexico is the largest Latin American supplier of apparel products to the US and the fifth-biggest worldwide behind countries like China and Vietnam according to the US department of commerce.