U.S. Textile Manufacturing and the
Trans-Pacific Partnership Negotiations
Michaela D. Platzer
Specialist in Industrial Organization and Business
November 20, 2013
Congressional Research Service
7-5700
www.crs.gov
R42772

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U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations

Summary
Textiles are a contentious and unresolved issue in the ongoing Trans-Pacific Partnership (TPP)
negotiations to establish a free-trade zone across the Pacific. Because the negotiating parties
include Vietnam, a major apparel producer that now mainly sources yarns and fabrics from China
and other Asian nations, the agreement has the potential to shift global trading patterns for textiles
and demand for U.S. textile exports. Canada and Mexico, both significant regional textile markets
for the United States, and Japan, a major manufacturer of high-end textiles and industrial fabrics,
are also participants in the negotiations.
U.S. textile manufacturers produce yarn, thread, and fabric for apparel, home furnishings, and
various industrial applications. In 2012, the U.S. textile industry generated $54 billion in
shipments and directly employed about 233,000 Americans, accounting for 3% of all U.S. factory
jobs. About one-third of U.S. textile production is exported, with the bulk of the exports going to
Western Hemisphere nations that are members of the North American Free Trade Agreement
(NAFTA) or the Central American-Dominican Republic Free Trade Agreement (CAFTA-DR).
Both free trade agreements provide that certain exports from member countries may enter the
U.S. market duty-free only if they are made from textiles produced in the region. This has
encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and fabrics in
apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR countries
contributed to a U.S. trade surplus of $2.1 billion in yarns and fabrics in 2012.
The TPP has the potential to affect U.S. textile exporters in at least two ways. First, it could
enable Asian apparel producers, principally Vietnam, to export clothing to the United States duty-
free. This would eliminate much of the advantage now enjoyed by Western Hemisphere apparel
producers in the U.S. market and, because Vietnamese manufacturers make little use of U.S.-
made textiles, could reduce demand for U.S. textile exports. Second, if the TPP were to allow
Western Hemisphere apparel manufacturers to use yarn and fabric made anywhere in the TPP
region and still enjoy preferential access to the U.S. market, an enlarged Vietnamese textile
industry could, at some future time, compete with U.S. exporters in Mexico and Central America.
Textile industry trade groups have urged the United States to insist on a strict “yarn forward” rule
that allows a garment to enter the United States duty-free only if yarn production, fabric
production, and cutting and sewing of the finished garment all occur within the TPP region. U.S.
negotiators have also proposed that certain textile inputs “not commercially available” in TPP-
member countries could be sourced from outside the region, including China. On the other side,
retailers and apparel companies with extensive global supply chains want maximum flexibility for
sourcing and are less concerned about whether textiles manufactured in the United States are
used; they urge textiles and apparel to be treated like other products in any TPP agreement, and
want any apparel cut and sewn within the TPP area regardless of where the fabric originates to be
eligible for duty-free entry. Members of Congress have voiced their support for both sides.
The TPP seems likely to have less impact on those segments of the U.S. textile industry that do
not supply apparel manufacturing. U.S. manufacturers of household and technical textiles appear
to be internationally competitive, and it is not evident that lower-wage countries would have
comparative advantage in these highly capital-intensive sectors.

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U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations

Contents
Introduction ...................................................................................................................................... 1
The U.S. Textile Industry and Its Markets ....................................................................................... 2
The Textile Manufacturing Process ........................................................................................... 3
Domestic Textile Production ............................................................................................................ 5
Global Textile Trade Shifts .............................................................................................................. 7
U.S. Trade in Textile Products ................................................................................................... 9
Sourcing in the Western Hemisphere....................................................................................... 10
TPP and Sourcing from Vietnam ................................................................................................... 13
Textiles and the TPP Negotiations ................................................................................................. 16
Conclusion ..................................................................................................................................... 18

Figures
Figure 1. Major Products of the Fiber, Textile, and Apparel Industries ........................................... 4
Figure 2. Textile Manufacturing Employment ................................................................................. 7
Figure 3. Top Global Textile Exporters............................................................................................ 8
Figure 4. U.S. Fabric and Yarn Exports to the Western Hemisphere ............................................. 12
Figure 5. U.S. Apparel Imports ...................................................................................................... 14
Figure 6. Major Production Steps for the Textile and Apparel Sector ........................................... 16

Tables
Table 1. U.S. Exports of Textile Mill Products to the World ........................................................... 9
Table 2. U.S. Yarn and Fabric Exports, by Countries or Region ................................................... 10

Appendixes
Appendix A. Selected U.S. Textile Manufacturers ........................................................................ 19
Appendix B. Textile Industry Overview ........................................................................................ 20
Appendix C. Top 10 States in Textile Employment ....................................................................... 21
Appendix D. Selected Apparel and Textile Duties ........................................................................ 22

Contacts
Author Contact Information........................................................................................................... 23
Acknowledgments ......................................................................................................................... 23
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U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations

Introduction
The Trans-Pacific Partnership Agreement (TPP) is a proposed regional free trade agreement
(FTA) currently under negotiation among 12 Pacific Rim countries. Initiated under President
George W. Bush, the TPP concept has wide bipartisan support.1 As the negotiations progress,
provisions concerning textile trade have become a major point of contention, attracting
considerable congressional attention and debate. This report examines the potential implications
of a TPP agreement, if one is reached, for the U.S. textile manufacturing industry.
In 2012, the United States exported nearly $14 billion in yarns and fabrics worldwide. Almost
two-thirds of this output was sold to Western Hemisphere nations that are members of the North
American Free Trade Agreement (NAFTA)2 or the Central American-Dominican Republic Free
Trade Agreement (CAFTA-DR).3 Both FTAs provide that certain exports from member countries
may enter the U.S. market duty-free only if they are made from textiles produced in the region.
This has encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and
fabrics in apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR
countries contributed to a U.S. trade surplus of $2.1 billion in yarns and fabrics in 2012.4
The TPP marks the first FTA negotiation for the United States initiated since the complete end of
quotas on textile and apparel trade.5 Duty-free access to the U.S. market under TPP could be of
considerable benefit to Asian manufacturers, which now face U.S. import duties on textiles and
apparel of up to 32%. Textile industry trade groups have warned that, if approved, the TPP could
lead to domestic job loss if it results in apparel producers in the Western Hemisphere, which often
use U.S.-made textiles, losing U.S. market share to producers in Vietnam and other TPP
countries.6 Aligned against them are retailers and apparel companies that want to be able to
import apparel from producers wherever they are located, regardless of whether U.S. textiles are
used; they urge full inclusion of textiles and apparel in any TPP agreement and favor preferential
access for apparel cut and sewn from fabric made in countries not included in the TPP, such as
China.7

1 The negotiating partners are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru,
Singapore, the United States, and Vietnam. Several other countries have shown interest in joining, including South
Korea, a major exporter of textile products to the United States. See CRS Report R42694, The Trans-Pacific
Partnership Negotiations and Issues for Congress, coordinated by Ian F. Fergusson.
2 NAFTA (P.L. 103-182) has been in effect since 1994.
3 The CAFTA-DR free trade agreement (P.L. 109-53) was signed in 2004, first with five Central American countries
(Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua) and then with the Dominican Republic. The United
States is also a member. CAFTA-DR was implemented on a rolling basis between 2006 and 2009. CAFTA-DR is
discussed in CRS Report R42468, The Dominican Republic-Central America-United States Free Trade Agreement
(CAFTA DR): Developments in Trade and Investment, by J. F. Hornbeck.
4 U.S. Commerce Department, Office of Textiles and Apparel (OTEXA), U.S. textiles and apparel trade balance
report. In 2012, U.S. yarn and fabric imports totaled $11.5 billion. The U.S. has posted a small trade surplus in yarns
and fabrics for 18 years.
5 The Agreement on Textiles and Clothing (ATC) ended in 2005, but China remained subject to textile and apparel
quotas through the end of 2008. The other FTAs had been initially concluded and signed by the end of that year.
6 National Council of Textile Organizations (NCTO), Trade and Jobs, http://www.ncto.org/tradejobs/index.asp.
7 Trans-Pacific Partnership Apparel Coalition, TPP Coalition Position Paper, http://www.tppapparelcoalition.org/
uploads/TPP_Apparel_Coalition_One_Pager.pdf.
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The U.S. Textile Industry and Its Markets
With $54 billion in industry shipments in 2012, textile manufacturing, which produces yarns and
fabrics from raw materials, is a supplier industry to three industrial sectors.8 The apparel industry,
which transforms textiles into clothing, consumed only 16% of U.S.-made textiles in 2008. Some
44% of textile output went into home furnishings such as carpeting and towels, while 40% was
used in technical textiles such as conveyor belts and automotive floor coverings.9
Whereas textile manufacturing occurs largely in highly automated factories, apparel
manufacturing is characterized by decentralized, globally dispersed production networks that are
coordinated by lead firms that control design, branding, and other activities. Many of the world’s
largest apparel retailing and marketing firms are headquartered in the United States, but because it
typically costs less to manufacture apparel abroad, the United States imports more clothing than it
makes domestically. U.S. apparel shipments totaled $13 billion, and apparel manufacturers
directly employed 148,300 workers in 2012.
Unlike textile manufacturers, most U.S.-headquartered apparel firms have limited or no U.S.
manufacturing capabilities. Some manufacture through a combination of facilities they own and
third-party arrangements, often with foreign factories. Others rely entirely on arrangements with
third-party suppliers, mostly in Asia. Large retailers frequently contract directly with apparel
sourcing companies, which in turn portion out the production work to independent manufacturers.
The United States was responsible for 1% of the $423 billion of global apparel exports in 2012.10
Top apparel suppliers to the United States are China, Vietnam, Indonesia, Bangladesh, and
Mexico. Beyond apparel manufacturing, countless other functions related to apparel are done
domestically, such as design, branding, and marketing of finished products.11
The U.S. home furnishings industry has fared far better against import competition than the
apparel industry, largely because manufacturing of carpets, curtains, and tablecloths is highly
automated. For example, the development of larger, faster carpet-tufting machines contributed to
a decline in employment at U.S. carpet and rug mills, from 54,700 workers in 2000 to 31,500 in
2012.12 Shipments from U.S. carpet and rug mills totaled $8.6 billion in 2011.13 The health of the
carpet and rug mills industry is tied in large part to conditions in the domestic housing and
commercial building market, raw material prices, and competition from foreign producers.14

8 Shipments, a proxy for production, are from U.S. Census Bureau, Manufacturers’ Shipments, Inventories, and Orders
(M3) Survey, http://www.census.gov/manufacturing/m3/. Fabric and yarn manufacturing are classified under North
American Industry Classification System (NAICS) code 313. Textile product mills (NAICS 314) include plants making
carpets, home linens, tire cord, and other “made-up” textile articles. The apparel sector is classified under NAICS 315.
9 U.S. Census Bureau, The 2011 Statistical Abstract, Manufactures: Nondurable Goods Industries, 2011, Table 1022,
http://www.census.gov/compendia/statab/2011/tables/11s1022.pdf.
10 World Trade Organization (WTO), International Trade Statistics, 2013, Clothing, Table 11.70. http://www.wto.org/
english/res_e/statis_e/its2013_e/its13_merch_trade_product_e.htm.
11 Karina Fernandez-Stark, Stacey Frederick, and Gary Gereffi, The Apparel Global Value Chain, Duke University,
Center on Globalization, Governance & Competitiveness, November 2011, pp. 7-16, http://www.cggc.duke.edu/pdfs/
2011-11-11_CGGC_Apparel-Global-Value-Chain.pdf.
12 BLS, QCEW, Carpet and Rug Mills (NAICS 31411), accessed November 4, 2013, http://www.bls.gov/cew/.
13 U.S. Census Bureau, Annual Survey of Manufactures, 2011 and 2010 (Carpet and rug mills NAICS 31411).
14 Agata Kaczanowska, New foundations: Firms will be forced to innovate to stay competitive, IBISWorld, February
2012, pp. 7-11.
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The output of technical textile mills is used across various industrial sectors. According to one
recent estimate, automotive manufacturers use more than 200,000 tons of textiles for automotive
interior fabrics, including upholstery, headliners, and door panels, excluding textiles for carpets,
floor mats, tire cords, seat belts, or air bags.15 Approximately 160,000 workers are said to produce
fabrics specifically for the technical textile market.16
The Textile Manufacturing Process
Textile manufacturing begins with fiber, which can be harvested from natural resources (e.g.,
cotton, wool, silk, or ramie), manufactured from cellulosic materials (e.g., rayon or acetate), or
made of man-made synthetic materials (e.g., polyester, nylon, or acrylic). After the raw fibers are
shipped from the farm or the chemical plant, they pass through four main stages of processing
(see Figure 1):
• yarn production, in which fiber is spun into filament or yarn;
• fabric production, which can take place at very small mills or large textile mill
operations, and involves primarily either weaving or knitting;
• finishing, which prepares the textiles for further use by processes such as
bleaching, printing, dyeing, and mechanical or wet finishing; and,
• fabrication, where the finished cloth is converted into apparel, household, or
industrial products.

15 Robert Reichard, “Textiles 2013: The Turnaround Continues,” Textile World, September 2013.
16 Letter to the Honorable Dave Camp and Honorable Sander Levin from the United States Industrial Fabrics Institute
dated April 6, 2011, http://waysandmeans.house.gov/UploadedFiles/US_Industrial_Fabrics_InstituteTR3.pdf.
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Figure 1. Major Products of the Fiber, Textile, and Apparel Industries

Source: International Trade Commission, Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign
Suppliers to the U.S. Market, Volume 1, Investigation No. 332-448, Publication 3671, Figure 1-1, January 2004.
Each industry segment has a unique business structure, management style, and history. Each is
supported by different kinds of technology, including highly specialized equipment, notably yarn
spinning machines, knitting machines, and looms.
Worldwide, in 2011, the textile industry produced 85.9 million metric tons of textiles. Man-made
fibers accounted for 61% of total production. According to industry analysts, the United States
ranked as the world’s third-largest man-made fiber producer, behind China and India.17 Most of
the global growth in man-made textile manufacturing has taken place in China, which was
responsible for 63% of total production in 2011, up from 26% in 2001. India and the United
States each accounted for 5% of global output of man-made textiles, with the U.S. share declining
from 11% in 2001. No other country produced more than 4% of the global total in 2011.18
Cotton is the most important natural fiber. In the 2012-2013 marketing year, China ranked as the
world’s largest producer of cotton at 7.6 million metric tons, followed by India and the United
States.19 Other large cotton producers include Pakistan, Brazil, Australia, and Uzbekistan. Many
of the leading cotton producers are also leading mill users of raw cotton. The top three consumers

17Andreas Engelhardt, The Fiber Year 2012, World Survey on Textiles & Nonwovens, May 2012, p. 1,
http://www.thefiberyear.com/pdf/Tfy_Toc_2012.pdf.
18 Ibid., p. 131, Table 10.11, http://www.thefiberyear.com/pdf/Tfy_Toc_2012.pdf. The Fiber Year report shows global
production of man-made fibers in millions of metric tons.
19 U.S. Department of Agriculture, Cotton: World Markets and Trade, November 2013, p. 7,
http://usda01.library.cornell.edu/usda/current/cotton-market/cotton-market-11-08-2013.pdf.
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of cotton are China, India, and Pakistan, which together account for two-thirds of world
consumption. Consumption of cotton by U.S. textile mills peaked in 1997. Since then, due to the
decrease in domestic textile production caused by competition from imported textile and apparel
products, U.S. mill use of cotton has dropped about 70%.20 According to the National Cotton
Council, exports have consistently accounted for 75%-80% of U.S. cotton production over the
past five years.21 As for other natural fibers, two TPP negotiating partners, Australia and New
Zealand, are among the world’s leading wool growing nations.22 Vietnam is a top ten producer of
silk, but accounts for only a small portion of global production. China and India are the world’s
two largest silk producers.23
Domestic Textile Production
U.S. textile output has been growing since 2009 after several years of decline. The value of
shipments was $54 billion in 2012, a 1% increase over 2011. This amounted to 1% of total U.S.
manufacturing shipments. About 9,000 companies are engaged in the business, but 50 of the
largest companies accounted for about 60% of total industry revenue.24 Appendix A provides an
overview of selected U.S.-headquartered textile manufacturers.
According to the National Council of Textile Organizations (NCTO), 565 textile plants were
shuttered between 2000 and 2012. Most of these closures occurred in the early 2000s.25 Despite
these trends, a few textile manufacturers have thrived, and several have established new domestic
manufacturing facilities. NCTO reported in recent congressional testimony that “over the past 18
months, five new plants have opened in the United States.”26 They include Zagis USA’s open-end
spun cotton yarn plant in Louisiana, and DuPont’s $500 million Kevlar fiber facility in South
Carolina.27 Zagis cited access to raw materials and proximity to ports and freight lanes as reasons
for its U.S. investment.28 Reportedly, DuPont’s facility will supply industrial high-strength
fibers.29
Domestic textile manufacturers have invested heavily in technology to reduce operating costs.
For example, modern industrial looms incorporate air-jets to weave at speeds of 2,000 picks per

20 U.S. Department of Agriculture, Foreign Agricultural Service, Cotton: World Markets and Trade, September 2013,
http://usda01.library.cornell.edu/usda/fas/cotton-market//2010s/2013/cotton-market-09-12-2013.pdf.
21 Gary Adams, Shawn Boyd, Michelle Huffman, The Economic Outlook for U.S. Cotton, National Cotton Council
Annual Meeting, February 8-10, 2013.
22 Fiber Year 2012 reports that six countries (Australia, China, New Zealand, Argentina, South Africa, and Uruguay)
account for about 55% of global wool output, p. 32.
23 Food and Agricultural Organization, Statistical Division, http://faostat.fao.org/site/339/default.aspx.
24 First Research, Textile Manufacturing Industry Profile, August 19, 2013.
25 NTCO, Textile Source, Fourth Quarter 2012, 2012, p. 48.
26 NCTO, Statement of the National Council of Textile Organizations before the House Ways and Means
Subcommittee on Trade on the Trans-Pacific Partnership Negotiations, December 14, 2011, p. 6, http://www.ncto.org/
newsroom/Testimony2011-1214—NCTO_TPP_WaysandMeans.pdf.
27 “DuPont Starts Up $500 Million Kevlar Facility,” R&D Magazine, October 6, 2011, http://www.rdmag.com/News/
2011/10/Policy-And-Industry-Materials-DuPont-Starts-Up-Kevlar-Facility/.
28 Cotton Revolution, 2012, http://www.louisianaeconomicdevelopment.com/case-studies/zagis-usa.aspx.
29 Adam Burns, “Going Up?,” Site Selection, September 2011.
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minute (compared with 200 picks in 1980, which at the time was considered fast).30 Some modern
textile mills have become almost completely automated, churning out thousands of square yards
every hour with as few as 10 or 20 employees. Investment by the U.S. textile industry in new
plants and equipment totaled $16.5 billion between 2001 and 2010, reports NCTO.31
Because yarn and fabric production are capital and scale intensive, they demand higher worker
skills than apparel production. As a consequence, the textile industry has been less prone to
relocation to lower-wage countries than apparel manufacturing. Significant production remains in
the United States, Japan, and South Korea, where skilled labor is available and manufacturers can
raise the capital to finance weaving mills costing an estimated $12 million to $25 million and
spinning mills costing $50 million to $70 million.32 The head of Unifi, one of the largest U.S.
textile manufacturers, predicted in 2010, “there’s going to continue to be a textile industry in the
United States. The more automated and technically sophisticated parts of the process will stay
here.”33
Among all U.S. industries, textiles rank near the top in productivity increases. This can be
attributed both to automation and to the closure of less efficient mills. While imports of textiles
and apparel undoubtedly have contributed to lower industry employment, more than 200,000
textile manufacturing jobs have been lost due to automation over the past decade, according to
private estimates.34
At the end of 2012, the domestic textile industry employed 233,300 workers, or 2% of the 11.9
million domestic factory jobs (see Appendix B). Average annual pay was $37,900 in 2012, far
below the average of $60,496 for all manufacturing. Figure 2 shows employment has declined by
two-thirds since 1990.35 Over time, employment has fallen most rapidly during economic
downturns, but has failed to return to prerecession levels during the ensuing recoveries. One
industry expert predicts overall textile manufacturing employment will shrink to 209,000 by
2015.36
Domestic textile production is primarily located in the southeastern states and in California,
although every state has some textile manufacturing. In 2012, more than one-third of all textile
jobs were located in Georgia and North Carolina. Appendix C compares textile employment in
the top ten states, which accounted for more than two-thirds of all textile jobs, in 2002 and 2012.

30 John Varrasi, Transforming the Textile Industry, ASME, April 2012, http://www.asme.org/kb/news—
articles/articles/manufacturing—processing/transforming-the-textile-industry/.
31 NTCO, Textile Source, Fourth Quarter 2012, 2012, p. 46.
32 Nathan Associates, Bringing Hope to Haiti’s Apparel Industry, World Bank, November 2009, p. 6.
33 Paul Wiseman, “When the Textile Mill Goes, So Does a Way of life,” USA Today, March 11, 2010.
34 Robert Reichard, “Textiles 2013: The Turnaround Continues,” Textile World, January/February 2013,
http://www.textileworld.com/Articles/2013/January/January_February_issue/Textiles_2013.html.
35 BLS, Quarterly Census of Employment and Wages, accessed on November 4, 2013, at http://www.bls.gov/cew/.
36 Robert Reichard, “Textiles 2013: The Turnaround Continues,” Textile World, January/February 2013.
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Figure 2. Textile Manufacturing Employment

800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
19
19
19
19
19
19
19
19
19
19
20
20
20
20
20
20
20
20
20
20
20
20
20

Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages for NAICS 313 and 314.
In related apparel manufacturing, employment has shrunk every year for more than two decades,
resulting in 800,000 fewer U.S. apparel manufacturing jobs in 2012 than in 1990 as clothing
manufacturers have transferred much of their production capacity abroad. Some industry analysts
note that a “Made in the USA” label is being sought by more consumers, and retailers, like
Brooks Brothers, have responded by moving some production of some apparel back to the United
States. In aggregate, however, apparel work has continued to diminish. Seasonally adjusted
industry employment in September 2013 was 140,000, representing a reduction of 6,000 jobs
since September 2012.37
Global Textile Trade Shifts
For more than 40 years, developed countries, including the United States and the European
Union, sought to protect their textile and apparel sectors from developing countries’ exports
through two multilateral agreements, the Multi-Fiber Arrangement (MFA) and the Agreement on
Textiles and Clothing (ATC). Quotas on imports from more than 70 countries limited the
quantities of textiles (such as cotton yarns and synthetic fabrics) and particular garments (such as
t-shirts and sweaters) that could enter the United States and the European Union each year. This
system made it necessary for buyers of textile and apparel products to source from countries for
which quotas for particular products were available. This spread manufacturing to an ever-
increasing number of countries, instead of concentrating it where production was cheapest.
The expiry of the ATC on January 1, 2005, eliminated all textile and apparel quotas for members
of the World Trade Organization (WTO). Since then, buyers have been able to source from any
WTO member country, subject only to tariffs. However, U.S. tariffs on textile and apparel imports
vary considerably from country to country, governed by bilateral and regional arrangements
discussed in greater detail below. The average U.S. tariff rate in 2012 was 7.9% for textiles and
11.4% for clothing, but rates on particular products ranged as high as 32% (see Appendix D).38

37 Data from Bureau of Labor Statistics Current Employment Statistics, http://www.bls.gov/ces/.
38 WTO, World Tariff Profiles 2013, p. 170, http://www.wto.org/english/res_e/booksp_e/tariff_profiles13_e.pdf.
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According to the WTO, China was by far the world’s largest exporter of textiles in 2012, with
about a 33% global market share at $95.5 billion. China has been a major force in textiles for
decades, but its export growth accelerated following its 2001 accession to the WTO and the
expiration of the ATC. Now more than 50,000 textile mills operate in China.39 China’s textile
exports have more than quadrupled since 2000 (Figure 3). The European Union and India ranked
as the world’s second and third largest exporters of textiles in 2012. The European Union (based
on extra-EU imports), the United States, China, Hong Kong, and Japan were the world’s top five
importers of textiles in 2012.40
Figure 3. Top Global Textile Exporters
In Billions of U.S. dollars
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
China
EU-27
India
United States South Korea
2000
2010
2011
2012

Source: WTO, International Trade Statistics, 2013, Merchandise Trade, Table II.65.
Notes: Figures for the EU-27 only include exports to the rest of the world. If internal trade were included, EU
countries’ total textile exports would have been $69.4 billion in 2012, second to China’s $95.5 billion.
Apparel trade is more diversified than textile trade, as many nations have been able to develop
export-oriented apparel industries on the basis of imported fabrics, without having large domestic
textile production. China, the EU-27, Hong Kong, Bangladesh, Turkey, and Vietnam ranked as
the top clothing exporters in 2012. Central America, the Caribbean, and Africa, and countries
throughout Asia, including Malaysia, also export large quantities of apparel.41

39 Linda Greer, Susan Egan Keane, and Zixin Lin, NRDC’s Ten Best Practices for Textile Mills to Save Money and
Reduce Pollution, National Resources Defense Council (NRDC), February 2010, p. 5, http://www.nrdc.org/
international/cleanbydesign/files/rsifullguide.pdf.
40 WTO, International Trade Statistics, 2013, Merchandise Trade, Table II. 66. Textile Imports of Selected Economies.
41 WTO, International Trade Statistics, 2013, Merchandise Trade, Table II.70.
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U.S. Trade in Textile Products
In 2012, approximately one-third of U.S. textile production was exported, with a value of $17.1
billion (see Table 1). The United States has posted a modest trade surplus in fabrics and yarns for
18 years, but when made-up textile articles (e.g., sheets and towels) are included, the U.S. ran a
textile trade deficit of $16.8 billion in 2012. Import penetration—the share of U.S. demand met
by textile imports—reached 37% in 2012, from 26% in 2006 (see Appendix B).
Table 1. U.S. Exports of Textile Mill Products to the World
In Billions of U.S. Dollars, by Selected Years
Made-Up
Textile Mill
Fabric and

Fabric
Yarn
Articlesa
Products Total
Yarn Total
1990 $2,903
$2,141 $1,232 $6,276
$5,044
1995 $4,770
$2,818 $1,727 $9,315
$7,588
2000 $7,420
$3,130 $2,258 $12,808
$10,550
2005 $8,810
$3,271 $2,586 $14,667
$12,081
2006 $8,759
$3,701 $2,777 $15,237
$12,460
2007 $8,375
$3,932 $2,982 $15,289
$12,307
2008 $8,146
$4,259 $3,148 $15,553
$12,405
2009 $6,354
$3,455 $2,832 $12,641
$9,809
2010 $7,625
$4,433 $3,151 $15,209
$12,058
2011 $8,247
$5,614 $3,395 $17,256
$13,861
2012 $8,496
$5,071 $3,571 $17,138
$13,567
Source: U.S. Department of Commerce. Office of Textiles and Apparel Trade (OTEXA).
Note: Export Market Report, accessed on November 7, 2013.
a. Made-up articles include home furnishings and other consumer goods such as towels, tablecloths, and
bedsheets.
As displayed in Table 2, most yarns and fabrics exported from the United States are sold to
NAFTA and CAFTA-DR countries. U.S. exports are often more expensive than those from other
countries. Despite this cost differential, apparel producers in the NAFTA and CAFTA-DR
countries use U.S.-made textiles in products that are exported to the United States because the
goods are free of U.S. tariffs. Mexico is the U.S. textile industry’s largest foreign market, with
exports of $3.8 billion in 2012. However, textile exports to Mexico have trended down as a share
of total U.S. yarn and fabric exports since 2000, as rising labor costs have made it a less attractive
place to manufacture apparel and production has shifted to Central America. Less than $400
million of U.S.-made yarns and fabrics was exported to other prospective TPP member countries
such as Japan, Malaysia, and Vietnam in 2012.
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Table 2. U.S. Yarn and Fabric Exports, by Countries or Region
In Millions of U.S. Dollars, by Selected Years
1990 %
2000 %
2012 %

1990
Share 2000 Share 2012 Share
World
$5,044

$10,550

$13,567

Mexico
$478
9%
$3,726
35%
$3,815
28%
CAFTA-DR
$235
5%
$760
7%
$2,697
20%
Canada
$1,029
20%
$2,328
22%
$1,816
13%
EU-28
$1,372
27%
$1,506
14%
$1,380
10%
China
$163
3%
$210
2%
$1,194
9%
CBIa
$109
2%
$74
1%
$68
1%
Source: U.S. Department of Commerce. OTEXA. Accessed November 2013.
a. The Caribbean Basin Initiative (CBI) includes Antigua, Aruba, Bahamas, Barbados, Belize, British Virgin
Islands, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Netherlands Antilles, Panama, St. Kitts-
Nevis, St. Lucia, St. Vincent/Grenadines, and Trinidad and Tobago.
Canada, China, and the EU-28, with a combined total of $4.4 billion, provided almost one-third
of the yarns and fabrics imported by the United States in 2012. Textile imports are sensitive to the
economy: between 2008 and 2009, imports of yarns and fabrics shrank by 24%, but they rose
26% in 2010 and another 14% in 2011 as the economy improved. They increased only 1% in
2012.
In the apparel sector, import penetration reached almost 90% of U.S. demand in 2012, up from
73% in 2006 (see Appendix B). The U.S. trade deficit in apparel products was $74 billion in
2012.42 Nearly 40% of imported apparel came from China. Vietnam, a fast-growing source of
apparel for the U.S. market, furnished 9% of imports, and Mexico accounted for 5%, but the other
TPP participants shipped only small quantities of apparel to the United States. Central America,
the Caribbean, Mexico, and Canada collectively accounted for 16% of U.S. apparel imports in
2012, almost all of it made with textiles produced in the United States.
Sourcing in the Western Hemisphere
Central America, Mexico, and the Caribbean have limited textile production, but ample cut,
make, and trim apparel assembly capacity, or CMT production as it is known in the industry.
CMT is a low-valued-added production system, whereby a manufacturer produces garments for a
customer by cutting fabric provided by the customer, sewing the cut fabric, trimming the thread,
and packaging the garments according to the customer’s specifications. Canada’s higher-valued
added textile sector differs substantially from the CMT operations in Latin America. U.S. textile
exports to Canada, mainly specialty and industrial fabrics, totaled $1.8 billion in 2012.
In Central America, virtually all fibers are imported. The Central America-Dominican Republic
Apparel and Textile Council reports that the CAFTA-DR region has more than 600 apparel
companies. About 90 textile mills produce knit and woven fabrics, man-made fibers, and

42 OTEXA Textile and Apparel Trade Balance Report, accessed November 7, 2013, http://otexa.ita.doc.gov/tbrbal.htm.
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mixtures.43 Several U.S. textile manufacturers have manufacturing capabilities in Central America
as have companies from South Korea, Taiwan, and China.
Mexico is home to approximately 30 mills producing yarns and knitted and woven fabrics.44 U.S.-
based firms produce significant amounts of denim there.45 Among the regional apparel suppliers
that have free-trade agreements with the United States, Mexico is the only significant producer of
fabric and the only significant source of yarn.
Mexico’s apparel industry relies almost entirely on the U.S. market for exports. Its cut and
assembly operations often use U.S.-made fabrics to produce basic garments such as denim jeans
and T-shirts, which are then exported to the United States. Competition from countries with lower
wages appears to be reducing the competitiveness of Mexican apparel in the U.S. market.
Although Mexico ranked as the largest yarn and fabric market for the United States in 2012, with
significant purchases of impregnated fabrics, felt and specialty yarns, and man-made fibers and
filaments, U.S. exports to Mexico rose to $3.8 billion in 2012, from $3.7 billion in 2005 (see
Figure 4).46 The decline in Mexican purchases of U.S. fabric is likely related to the decline in
U.S. imports of Mexican apparel, which fell to $3.9 billion in 2012 from $6.3 billion in 2005.47
For U.S. textile exporters, Honduras, El Salvador, and Guatemala represent the biggest yarn and
fabric markets in the CAFTA region.48 At $1.3 billion, Honduras was the largest of the three in
2012, absorbing 10% of total U.S. yarn and fabric exports. Cotton (yarn/woven fabric), man-
made fibers, and man-made filaments, which are used to make basic apparel such as T-shirts,
socks, and underwear, are among the top export categories from the United States to Honduras.49
El Salvador and Guatemala are also major assemblers of basic apparel for the U.S. market.
Nicaragua benefits from a unique feature of the CAFTA-DR agreement: the inclusion of a tariff
preference level (TPL) provision.50 The TPL allows U.S. trade preferences for Nicaraguan apparel
that uses non-U.S. or non-CAFTA yarns and fabrics in limited amounts.51 Even with the TPL,
which is scheduled to expire at the end of 2014,52 U.S. exports of yarns and fabrics to Nicaragua

43 Central America-Dominican Republic Apparel and Textile Council based on data from International Development
Systems (IDS), http://www.apparelcentralamericadr.com/cecatec-dr/, retrieved November 2013.
44 Gary Gereffi and Jennifer Bair, Strengthening Nicaragua’s Position in the Textile-Apparel Value Chain: Upgrading
in the Context of the CAFTA-DR Region, Center on Globalization, Governance & Competitiveness, December 20,
2010, Table 10, p. 43, http://www.cggc.duke.edu/pdfs/2010-12-20_Gereffi_Bair_Nicaragua-apparel-report.pdf.
45 For example, Cone Denim operates two denim mills in Mexico, http://www.conedenim.com/mills.html.
46 OTEXA, Going Global, Export Guide for Textiles and Apparel, September 2013, p. 7, http://otexa.ita.doc.gov/PDFs/
GoingGlobal.pdf.
47 OTEXA, Textile and Apparel Trade Balance Report, accessed November 2013, http://otexa.ita.doc.gov/
msrpoint.htm.
48 Honduras has been the largest yarn export market for the United States since 2007, with exports of $1.0 billion in
2012, or about one-quarter of all U.S. yarn exports. U.S. exports of fabrics to Honduras totaled $305 million last year.
In recent years, Honduras has become stronger in knit fabrics due to investments by manufacturers such as Parkdale,
VF Corporation, and Premier Narrow Fabrics.
49 OTEXA, Going Global, Export Guide for Textiles and Apparel, August 2013, pp. 8.
50 O’Rourke Group Partners, Benchmarking the Competitiveness of Nicaragua’s Apparel Industry, Carana Corporation,
April 2011, http://www.mayorganet.com/downloads/nicaraguanapparel.pdf. There are no TPLs for the larger apparel
CAFTA assembly markets of El Salvador, Guatemala, or Honduras.
51 The Nicaraguan TPL allows some foreign components, including from Asian countries like China and Vietnam, to
be sent to CAFTA countries for assembly and then exported duty-free to the United States.
52 Senator Diane Feinstein introduced the Nicaraguan Tariff Preference Level Extension Act of 2013 (S. 1136) to
(continued...)
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remain relatively tiny at $108 million in 2012. Costa Rica also has a TPL provision applicable to
wool and certain women’s swimwear.53
Figure 4. U.S. Fabric and Yarn Exports to the Western Hemisphere
In Thousands of U.S. Dollars

Source: OTEXA, International Trade Administration, U.S. Department of Commerce.
Notes: These figures cover only yarn and fabric exports. They exclude made-up textiles.
Apparel manufacturers in the Caribbean region also have preferential access to the U.S. market
under the Caribbean Basin Initiative (CBI), now called the Caribbean Basin Trade Preference Act
(CBTPA) program. Because yarn and fabric production in the Caribbean are extremely limited,
the region’s cut and assembly factories mostly rely on U.S.-made fabrics and yarns, with U.S.
exports totaling $67 million in 2012. Most textile production in the Caribbean is located in the
Dominican Republic (also a CAFTA member).54 Other Caribbean countries such as Haiti have no
domestic textile industries, but use U.S.-made textiles to produce apparel for the U.S. market.
U.S. retailers buy most of their garments from Asia and tend to use Western Hemisphere
producers for quick replenishment, especially if time is a critical factor; for example, a retailer
might order 100,000 pairs of trousers from Asia and then, if early sales are strong, order an
additional 5,000 or 20,000 pairs from Mexico or Central America.55 The major products are basic,
low-value knitwear garments, such as shirts, pants, underwear, and nightwear, with a focus on

(...continued)
extend the Nicaraguan TPL through 2024.
53 Costa Rica, the last to implement DR-CAFTA, has increasingly ceded apparel manufacturing to other Central
American countries shifting to higher value-added goods, including electronics, and other industries such as tourism.
54 Fair Labor Association, The Apparel Industry in the Dominican Republic after the MFA, Report and
Recommendations of an FLA Mission, p. 12, June 2007.
55 Marion Traub-Werner, Apparel Production in the Americas after Quotas, Maquila Solidarity Network Fact Sheet,
Lessons from the Dominican Republic, March 2007, pp. 3-4, http://en.maquilasolidarity.org/sites/maquilasolidarity.org/
files/MSN-AfterQuotas-2007-03-ENG.pdf.
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men’s and boys’ wear. U.S. imports of industrial fabrics from the CAFTA-DR region are
relatively minimal at $1.3 million in 2012.56
Apparel producers in the Western Hemisphere have two main comparative advantages in serving
the U.S. market. One is geographic proximity, which confers lower transportation costs and faster
delivery; transit times from the CAFTA-DR region to a U.S. port range from two to seven days, 57
rather than about two weeks to a month from Asia.58 The other advantage is duty-free access for
apparel manufactured from U.S. textiles. For example, manufacturers of cotton T-shirts or cotton
twill trousers can avoid a 16.5% import duty if U.S. inputs are used.59
On the other side of the ledger, Mexico, Central America, and the Caribbean Basin have much
higher wage rates than some Asian apparel suppliers, such as Vietnam, Cambodia, and
Bangladesh. A 2010 study, for example, found the apparel industry’s average hourly cost of labor
to be $2.06 in Mexico, but only $0.51 in Vietnam.60
All things considered, tariff preferences appear to be important in keeping apparel producers in
the Western Hemisphere competitive in the U.S. market, and thereby preserving export markets
for U.S.-made textiles. A TPP agreement, if one is reached, has the potential to upset this
situation. If apparel produced in Asian TPP countries gains duty-free access to the U.S. market, it
could displace apparel manufactured with U.S. fabric in the Western Hemisphere, adversely
affecting U.S. textile exports. Also, should Vietnam develop a larger textile industry, U.S. textile
exports could be hurt if the TPP were to allow Western Hemisphere apparel producers to use
textiles made in any TPP member country and still enjoy duty-free access to the U.S. market.
TPP and Sourcing from Vietnam
Vietnam is the second largest exporter of garments to the United States, behind China.61 As
shown in Figure 5, apparel imports to the United States from China, which is not involved in the
TPP negotiations and its entry into TPP is unlikely in the near future, reached $31 billion in 2012.
U.S. apparel imports from Vietnam, although far smaller, have grown even faster, rising 15,000%
from 2000 to 2012 to $7.1 billion. In 2012, U.S. imports of clothing from Vietnam were nearly
twice the value of apparel imports from Mexico. U.S. imports of technical fabrics from Vietnam
have also expanded in recent years, totaling $162 million in 2012, but are still far smaller than

56 Various types of technical fabrics are found in OTEXA Category 229 (special purpose fabrics).
57 Transit times obtained from Maersk Line, http://www.maerskline.com, September 2012.
58 Department of Commerce, Assess Costs Everywhere, http://acetool.commerce.gov/shipping.
59 The 2013 Normal Trade Relations (NTR) duty rate for cotton T-shirts (HTS 6109.10.00) is 16.5% and men’s woven
cotton pants (HTS 6203.42.40) is 16.6% at an ad valorem (percent of value) rate. Tariff savings for other products can
be found on the USITC website at http://dataweb.usitc.gov/scripts/tariff_current.asp.
60 O'Rourke Group Partners, Benchmarking the Competitiveness of Nicaragua’s Apparel Industry, Carana Corporation,
April 2011, pp. 19-21, http://www.mayorganet.com/downloads/nicaraguanapparel.pdf.
61 Vietnam became a WTO member in 2007, which means it benefits from international trade rules, including
NTR/MFN tariffs for textiles and apparel. In 2012, Vietnam’s applied NTR/MFN duties were 9. 6% for textiles and
19.8% for apparel. NTR means that a U.S. trading partner is eligible for nondiscriminatory treatment, which includes
low tariffs and other concessions in exchange for similar benefits.
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apparel imports.62Among the Asian and Pacific countries in the TPP, Vietnam is the only one with
significant textile and apparel trade with the United States.
Figure 5. U.S. Apparel Imports
In Thousands of U.S. Dol ars, by Selected Countries

Source: OTEXA.
Generally, the main competitors to Vietnam in the U.S. clothing market are not Mexico and the
CAFTA-DR nations, but China and other Asian nations. Vietnam tends to sell fewer basic apparel
products (e.g., T-shirts and trousers) and more shirts, suits, and overcoats in the United States than
do Western Hemisphere trading partners. For example, in 2012, Vietnam provided more than 15%
of total U.S. imports of women’s or girls’ blouses, shirts, and suits, both knitted and woven.63
Vietnam’s apparel sector is young, having developed only in the past decade.64 According to
VITAS (Vietnam Textile and Apparel Association), about 3,200 garment and textile
manufacturers operated in Vietnam in 2009, of which more than three-quarters were apparel
firms.65
Vietnam’s apparel sector buys the majority of its yarns and fabrics regionally, from China and
other Asian suppliers, and purchases only a limited amount from the United States.66 The country
does have a growing textile industry, comprising 145 spinning mills, 401 weaving mills, 105

62 Vietnam was the second-largest supplier of specialty fabrics to the United States in 2012, accounting for 16% of the
$1.2 billion in imports. China was the largest, accounting for $259 million or one-fifth of imports of industrial fabrics.
63 Analysis based on Global Trade Atlas data, HTS 6104 (women’s or girls’ suits and ensembles) and HTS 6106
(women’s or girls’ blouses and shirts).
64 Vietnam’s textile industry developed in the 1980s in the framework of bilateral economic cooperation agreements
with other Communist countries, but many of these plants were abandoned in the 1990s. In more recent years, Vietnam
has begun to focus on rebuilding its textile sector, supported by investment from Japan, South Korea, Taiwan, and
China.
65 Gladys Lopez-Acevedo and Raymond Robertson, Sewing Success? (Washington, DC: World Bank, 2012), p. 478.
66 The Trans-Pacific Partnership Apparel Coalition claims more than half of yarn used in Vietnam comes from Taiwan
and China. See Common Myths about the Trans-Pacific Partnership and Yarn Forward Rule of Origin, March 2013,
p. 1, http://www.tppapparelcoalition.org/uploads/030113TPPMythFactSheet.pdf.
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knitting mills, 94 dyeing and finishing mills, and seven non-woven mills.67 However, Vietnam has
yet to develop a broad textile supply base and imports are estimated to account for 80% of the
fibers, fabrics, and yarns required by its apparel industry.
The Vietnam National Textile and Garment Group, or Vinatex, is Vietnam’s largest textile and
apparel corporation, accounting for 40% of apparel production and 60% of textile production.68 In
2010, it shipped 18.75% of Vietnam’s total textile and garment exports.69 Vinatex, partially state
owned,70 is one of several groups that are investing to increase fiber and fabric production in
Vietnam. Nationally, Vietnam’s Ministry of Trade and Industry has set a development strategy for
the textile and garment sector, aiming to increase fabric production to 2 million metric tons by
2020.71 Fiber production is targeted to increase to 500,000 metric tons in 2015 and 650,000
metric tons by 2020. Fiber factories to help reduce Vietnam’s dependence on imported materials
include a joint venture between Vinatex and PetroVietnam Petrochemical & Textile Fiber Joint
Stock Company to build a polyester fiber plant at Dinh Vu.72 Investments in chemical plants to
generate the basic feedstock required for the production of synthetic fabrics may follow.
According to Vietnam Investment Review, “a new wave of foreign investments in the spinning,
weaving, and dyeing sectors has been kicked off, since investors can see the profits they can gain
from the TPP.”73 For example, major Chinese companies, such as Texhong, Pacific Textile, and
Shenzhou, are opening new textile plants in Vietnam, partly attracted by lower labor costs and
lower tariffs under a potential TPP.74
Arguably, preferential access to the Vietnamese market under a TPP agreement could result in
new business opportunities for U.S. fiber, yarn, and fabric producers. To date, however, Vietnam
is not a significant market for U.S. yarn and fabric exporters, importing $63 million of such
products in 2012. The United States’ main textile-related export to Vietnam is raw cotton: U.S.
exports supply about 60% of the cotton used in Vietnamese textile mills.

67 Gladys Lopez-Acevedo and Raymond Robertson, Sewing Success? (Washington, DC: World Bank, 2012), p. 478.
68 European Commission, Economic Integration and Vietnam’s Development, Final Report, December 2009, p. 48,
http://www.mutrap.org.vn/en/library/ThamKhao/
Economic%20Integration%20and%20Vietnam%27s%20Development.pdf.
69 Sarah C. Thomasson, “Vietnam: A Textile Powerhouse,” Textile World Asia, July/August/September 2011,
http://textileworldasia.com/Articles/2011/August/Country_Profile_Vietnam.html.
70 An overview of Vinatex is available at http://www.vinatex.com. NCTO has identified 11 different subsidy programs
by the Vietnamese government to support its domestic textile and apparel sector, including low cost loans, energy, and
research and promotion. See NCTO Fact Sheet, TPP Negotiations, p. 3, April 2012, http://www.ncto.org/
IndustryIssues/TPP-Fact-Sheet--Apr2012.pdf.
71 WTO, Trade Policy Review Vietnam, August 13, 2013, p. 123, http://www.wto.org/english/tratop_e/tpr_e/
s287_e.pdf#page=1&zoom=auto,0,842.
72 Ibid.
73 Vietnam Investment Review, TPP May Attract more Foreign Investment Projects in Textiles and Dyeing, June 19,
2012. http://www.vir.com.vn/news/business/tpp-may-attract-more-foreign-investment-projects-in-textiles-and-
dyeing.html.
74 Haiyan Guo, Bing Quian, and Chen Feng et al., Apparel, Textiles, Luxury & Jewelry, China International Capital
Corporation, Mass market to spark modest recovery in 2014, November 12, 2013, pp. 14-17.
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Textiles and the TPP Negotiations
Textile and apparel trade is governed by very specific rules. Most of the bilateral and regional
FTAs and trade preference programs negotiated by the United States over the past two decades
include extensive provisions governing textiles and apparel. The key issue is typically rules of
origin (ROOs), which specify how much of the content of textile and apparel products must come
from the region in order for the products to qualify for duty-free access.75 ROO requirements for
textile and apparel products are usually based on the production process as shown in Figure 6.
Figure 6. Major Production Steps for the Textile and Apparel Sector

Source: International Trade Commission, Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign
Suppliers to the U.S. Market, Volume 1, Investigation No. 332-448, Publication 3671, Figure 1-3, January 2004.
Possible rules of origin generally stipulate how much processing must occur within the region if a
product is to obtain trade benefits. The major distinctions are:
• Fiber Forward: Fiber must be formed in the FTA member territory. Natural
fibers such as wool or cotton must be grown in the territory. Man-made fibers
must be extruded in the trading area.
• Yarn Forward: Fibers may be produced in any country, but each component
starting with the yarn used to make the textiles or apparel must be formed within
the free trade area. This rule is sometimes called “triple transformation,” as it
requires that spinning of the yarn or thread, weaving or knitting of the fabric, and
assembly of the final product all occur within the region.
• Fabric Forward: Producers may use fibers and yarns from any country, but
fabric must be knitted or woven in FTA member countries.
• Cut and Sew: Only the cutting and sewing of the finished article must occur in
FTA member countries, providing maximum flexibility for sourcing.76
The United States, most often, has applied the “yarn forward” standard for textiles and apparel,
with the notable exceptions of agreements with Jordan and Israel.77 Most U.S. FTAs also include
exceptions allowing limited quantities of fibers, yarns, and fabrics to be sourced from outside the
FTA partner countries under certain conditions.78

75 CRS Report RL34524, International Trade: Rules of Origin, by Vivian C. Jones and Michael F. Martin.
76 U.S. Customs and Border Protection, What Every Member of the Trade Community Should Know About: Textile and
Apparel Rules of Origin.
77 ROOs in the FTAs with Jordan and Israel provide that cutting and sewing, or knitting to shape, fabric finishing, and
similar treatment are sufficient to confer origin as long as the value-added requirement of 35% is met.
78 For example, in NAFTA “fiber forward” applies to man-made fiber sweaters, “fabric forward” to linings for tailored
clothing, and “cut and sew” to certain fabrics, including Harris Tweed and velveteen.
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Appendix D lists textile and apparel tariff rates of various countries. In general, U.S. tariffs
increase with each stage of manufacturing, such that duty rates are usually higher on apparel than
on its yarn or fabric inputs. The United States’ TPP negotiating partners also tend to maintain
steep tariffs. For instance, Vietnam’s apparel tariffs range from 5% to 20%.
U.S. negotiators have proposed that the TPP agreement incorporate a unified yarn-forward ROO,
with perhaps some exemptions for inputs considered to be in short supply, or “not commercially
available,” in the region79 to assure that duty-free preferences only benefit countries that are part
of the agreement.80 Press reports indicate that several TPP negotiating countries, including
Vietnam, oppose U.S. demands for a “yarn forward rule.”81 Vietnam publicly supports a “cut and
sew” rule that would allow it, and other TPP participants, to enjoy preferential access for apparel
that has been cut and sewn from fabric made in China or other countries not included in the
TPP.82
U.S. domestic interests disagree over what ROOs should be included in any TPP agreement. On
one side are fiber, yarn, and fabric manufacturers who want rules that would require more U.S. or
TPP content. Organized as the Textile and Apparel Alliance for TPP (TAAT), they have endorsed
a basic yarn forward rule applicable to all TPP countries.83 They warn that without a yarn-forward
rule Vietnamese apparel manufacturers could use Chinese textiles, thereby giving Chinese textile
manufacturers duty-free access to the U.S. market and undermining U.S. textile production. More
than 165 members of Congress have endorsed TAAT’s position, sending a letter in support to the
U.S. Trade Representative recommending a yarn-forward rule.84
On the other side are U.S. retailers and importers of apparel, many with no domestic
manufacturing, including Walmart and the National Retail Federation (NRF), along with the U.S.
Chamber of Commerce. These interests formed the Trans-Pacific Partnership Apparel Coalition,
which opposes the yarn-forward ROO and calls for a “flexible, liberal, 21st century ROO
standard” for textiles and apparel.85 Their preferred rule requiring only that the sewing of a
garment be done in a TPP country to get duty-free status would permit use of yarns and fabrics
from China and other Asian countries in garments assembled in the region. The TPP Apparel
Coalition recommends that apparel qualify for preferential treatment if it meets a regional value

79 The United States has proposed negotiation of two short-supply lists that would allow certain textile inputs if they are
“not commercially available in TPP-member countries.” These items could be sourced either permanently or
temporarily from non-TPP countries like China. The proposed lists are confidential, but are said to include more than
200 items. See TPP Apparel Coalition, TPP Short Supply, May 2013, http://www.tppapparelcoalition.org/uploads/
Short_Supply_Power_Point.pdf.
80 Letter to Congressman Patrick McHenry from U.S. Trade Representative Michael Froman, August 13, 2013.
81 “U.S., Vietnam Signal Flexibilities in TPP Apparel Rule of Origin Fight,” Inside U.S. Trade, May 24, 2012.
82 “Trade Deals Need to Benefit Both Sides,” Vietnam News, June 30, 2011, http://www.usaita.com/pdf_files/
VITAS%20Article.pdf.
83 TAAT includes organizations such as the American Fiber Manufacturers Association, National Cotton Council,
NCTO, the United States Industrial Fabrics Institute, and overseas groups including the Central American-Dominican
Republic Apparel and Textile Council and the Africa Coalition for Trade.
84 NCTO, “Congress Backs NCTO Letter to USTR advocating Fair Textile Provisions,” press release, July 10, 2013,
http://www.ncto.org/newsroom/pr2013-0710--CongressBacksNCTO--
LettertoUSTRAdvocatingFairTextileProvisions.pdf.
85 The TPP Apparel Coalition is made up of American retailers, apparel brands, apparel manufacturers, and importers,
including organizations such as the American Apparel & Footwear Association (AAFA), National Retail Federation
(NRF), Outdoor Industry Association (OIA), the Retail Industry Leaders Association (RILA), and the United States
Fashion Industry Association (USFIA).
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content threshold, making it easier to switch sources of supply as fashions and relative costs
change.86 Some members of Congress support this position, asking President Obama in May 2012
to pursue “a flexible general rule of origin for apparel that maximizes the incentive to grow U.S.
exports, value, and jobs in the TPP.”87
Conclusion
Concerns about the health of domestic textile manufacturing have influenced many past trade
negotiations, and now figure prominently in the regional TPP negotiations. For textile
manufacturers, the inclusion of a significant apparel producer such as Vietnam in a free trade
agreement holds the potential to dramatically shift global trading patterns.
Depending upon its provisions, it is imaginable that a TPP agreement could result in apparel made
in Vietnam displacing apparel from the Western Hemisphere in the U.S. market, weakening the
export markets now served by U.S. textile producers in Mexico and Central America. An
alternative scenario might allow apparel manufacturers in Mexico, a TPP participant, to use
textiles made in any TPP country and still enjoy duty-free access to the U.S. market; while no
Asian TPP participant currently has the textile production capacity to supply Western Hemisphere
producers in this way, it is conceivable that such capacity could be installed in the future.
U.S. textile manufacturing interests have urged U.S. negotiators to insist on a “yarn forward” rule
in the TPP. This would require that for apparel, home furnishings, or technical textiles to benefit
from duty-free access, they would have to be assembled in a TPP country from fabric
manufactured in a TPP country out of yarn produced in a TPP country. Such a rule would severely
limit the ability of countries such as Vietnam to use Chinese or Indian yarns and fabrics in
apparel, home furnishings, or technical textile products for the U.S. market, although it would not
constrain imports if Vietnam were to develop a more fully integrated textile industry. However, a
“yarn forward” rule would also affect U.S. apparel consumers and the household textiles and
specialty textiles markets, as these products made in TPP countries from yarns and fabrics
produced elsewhere would not qualify for duty-free treatment.
Domestic manufacturers of household and technical textiles seem less likely to be immediately
affected by any TPP agreement. U.S. manufacturers appear to be internationally competitive in
these sectors, and Vietnam’s low labor costs will provide little comparative advantage in areas
where production is highly automated. In the case of technical textiles, U.S. manufacturers also
benefit from proximity to their industrial customers. Domestic technical textile manufacturers
point out that Vietnam has been expanding its reach into industrial fabrics and higher-end textiles
in recent years, including tire cord and coated fabrics,88 but Vietnam will probably not be a
significant global competitor in the near future.

86 TPP Apparel Coalition, Common Myths about the TPP and the Yarn Forward Rule of Origin, March 2013, p. 6,
http://www.tppapparelcoalition.org/uploads/030113TPPMythFactSheet.pdf.
87 Letter to President Obama from 15 U.S. Senators, May 1, 2012, http://tppapparelcoalition.org/uploads/
050112warnertppletter.pdf.
88 Letter from Ruth A. Stephens, Executive Director, U.S. Industrial Fabrics Institute, to Ambassador Ron Kirk, United
States Trade Representative, March 26, 2012.
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U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations

Appendix A. Selected U.S. Textile Manufacturers
Total
Revenue
Employees,
($ millions),
Company
2012
2012
Textile Manufacturing Facilities
American & Efirda
9,475
$801.3 23 manufacturing facilities worldwide, including the
United States, China, and India
International Textile
4,800
$619.1 United States, Mexico, China, and Vietnam
Groupb
R. B. Pamplin
6,205
$437.2 United States, Latin America, the Caribbean, and
Corporationc
Asia
Millikend
7,000
$35.3 United States, United Kingdom, Belgium, France, and
China
Albany International
4,000
$760.9 More than a dozen plants globally, five of which
Groupe
manufacture forming fabrics
Polymer Groupf
2,800
$1,155.2 13 manufacturing and converting facilities in the
United States, Europe, Latin America, Canada, Asia
Parkdale Millsg
3,000
$237.5 United States, Colombia, and Mexico
Unifih
2,500
$714.0 10 manufacturing operations in United States, Brazil,
El Salvador, and Colombia
Lear Corporationi
2,600
$400.0 United States, Europe, and a joint venture in China
Mohawk Industriesj
25,100
$5,788.0 United States, Mexico, and Europe
Source: CRS with information compiled from Hoovers, Plunkett Research, company reports, and websites.
a. American & Efird manufactures industrial sewing thread, embroidery thread, and technical textiles.
b. The International Textile Group (ITG) primary business segments include Burlington Worldwide and the
Automotive Safety Group.
c. R.B. Pamplin owns Mount Vernon Mills, a manufacturer of textile, chemical, and related products for the
apparel, industrial, institutional, and commercial markets, with 2,800 employees in 2012.
d. Milliken & Company, a privately-held South Carolina-based company, manufactures protective fabrics,
specialty fabrics, and industrial textiles, specialty chemicals, performance products, and floor coverings.
e. Albany International produces man-made fibers, mainly for the pulp and paper industry, as wel as specialty
materials and composites and outdoor clothing, gloves, footwear, sleeping bags, and home furnishings.
f.
Polymer is a manufacturer of engineered materials for the hygiene, health care, and textile industries.
g. Parkdale Mills, a privately held North Carolina-based company, manufactures cotton and cotton-polyester
blend yarns used in goods such as sheets, towels, underwear, and jeans.
h. Unifi, based in North Carolina, produces multi-filament polyester and nylon textured yarns for apparel,
hosiery, furnishings, automotive, industrial, and other uses.
i.
Lear Corporation, a supplier of automotive seating and electrical power management systems, purchased
Guilford Mills, a maker of automotive and specialty fabrics in 2012.
j.
Mohawk produces floor coverings for residential and commercial applications.
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Appendix B. Textile Industry Overview
2006
2011
2012
2006-2012
Total U.S. manufacturing employment
14,110,663 11,701,497 11,905,280
-16%
(all industries)
Textile mills (NAICS 313)
193,872
119,970
117,923
-39%
Textile product mills (NAICS 314)
160,558 117,759 115,419 -28%
Total textile employment
354,430
237,729
233,342
-34%
Apparel (NAICS 315)
238,684
151,135
148,334
-38%
Al textiles and apparel (T&A)
593,114
388,864
381,676
-36%
T&A employment as % of total mfg. employment
4%
3%
3%

Total value of shipments, in millions of




U.S. $
Total U.S. manufacturing
$5,016,062
$5,504,396
$5,724,015
14%
Textile mills (NAICS 313)
$38,872
$31,5120
$30,798
-21%
Textile product mills (NAICS 314)
$33,327
$22,108
$23,156
-31%
Total textile shipments
$72,199
$53,620
$53,954
-25%
Apparel manufacturing (NAICS 315)
$30,385
$12,862
$13,122
-57%
Al textiles and Apparel (T&A)
$102,584
$66,482
$67,076
-35%
T&A shipments as % of total mfg. shipments
2%
1%
1%

U.S. imports for consumption




Textile mills (NAICS 313)
$7,361
$7,314
$7,608
-12%
Textile products (NAICS 314)
$14,680
$16,943
$17,233
25%
Total textile imports
$20,962
$22,347
$23,467
12%
Apparel imports (NAICS 315)
$77,009
$82,118
$81,186
10%
Al textiles and apparel
$95,434
$97,760
$105,585
11%
U.S. Exports




Textile mills (NAICS 313)
$8,520
$9,063
$8,573
7%
Textile products (NAICS 314)
$2,561
$2,740
$2,853
17%
Total textile exports
$10,814
$10,405
$11,804
9%
Apparel exports (NAICS 315)
$3,779
$3,203
$3,289
-21%
Al textiles and apparel
$14,883
$13,471
$15,006
1%





Apparel imports share of U.S. market
74.3% 87.8% 87.2%

Textile imports share of U.S. market 26.5%
37.2%
37.3%
Source: CRS, with data from U.S. Department of Labor, Quarterly Census of Employment and Wages; Census
Bureau, Manufacturers’ Shipments, Inventories, and Orders, and USITC Dataweb. All data accessed in November
2013.
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U.S. Textile Manufacturing and the Trans-Pacific Partnership Negotiations

Appendix C. Top 10 States in Textile Employment
2002 Textile
2012 Textile
Employment

Employment
Employment
% Change
Change
United States
486,027
233,342
-52%
-252,685
Georgia 84,264
45,154
-46%
-39,110
North Carolina
97,263
34,786
-64%
-62,477
South Carolina
55,976
18,701
-67%
-37,275
California 32,259
17,009
-47%
-15,250
Alabama 27,406
10,195
-63%
-17,211
Texas
11,757 8,584 -27%
-3,173
Pennsylvania
17,879 7,733 -57%
-10,146
New
York
15,077 7,633 -49%
-7,444
Virginia
19,739 7,560 -62%
-12,179
Tennessee
12,054 6,016 -50%
-6,038
Top 10 States Employment Total
373,674 163,371 -56%
-210,303
Other 40 states plus DC
112,353 69,971 -38%
-42,382
Top 10 States
77% 70%


% of Total Employment
Source: CRS with data compiled from U.S. Bureau of Labor Statistics, Quarterly Census on Employment and
Wages, accessed November 2013.
Notes: Textile employment data cover two NAICS codes 313 and 314. The 50 states and Washington, DC, do
not sum to the national total because the national total includes suppressed data and Puerto Rico.
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Appendix D. Selected Apparel and Textile Duties
Ad Valorema Tariff Range
Non-
Woven
Woven
Industrial
Country Yarn Fabric Knit
Fabric Fabric
Fabric Apparel
FTA Member Countries
Australia 0-5%
0-5%
5-10%
5%
0-5%
0-10%
Chile 6%
6%
6%
6%
6%
6%
Colombia 5-15%
5-10%
5-10%
5-10%
5-10%
15%
Israel 0-8%
0-12%
0-12%
0-12%
0-14%
0-12%
Jordan 0-20%
0%
0%
0%
0-20%
0-20%
Morocco 2.5%
2.5-25%
10-25%
2.5%
2.5%-30%
2.5-30%
Panama 0-15%
0-15%
0%
0%
0-15%
0-15%
Peru 0-11%
0-11%
0-11%
0-6%
0-11%
6-11%
South Korea
0-8%
2-13%
10%
8%
8-10%
8-13%
CAFTA-DR
Costa Rica
0-5%
0-9%
0-9%
l0%
0-9%
0-14%
Dominican
0% 0-14% 0-8%
0% 0-20% 3-20%
Republic
El Salvador
0-5%
0-10%
0-10%
0%
0-10%
0-15%
Guatemala 0%
0-10%
0-10%
0%
0-10%
0-15%
Honduras 0-5%
0-10%
0-10%
0%
0-10%
0-15%
Nicaragua 0-5%
0-10%
5-10%
0%
0-10%
0-10%
NAFTAb
Mexico 0-15%
15%
0-15%
15%
0-15%
30%
Canada 0-8%
0-8%
0-8%
0%
0-18%
0-18%
Other TPP Negotiating Partners
Brunei 0%
0%
0%
0%
0-10%
0%
Japan 0-6.9%
2.5-12.5%
4-9.8%
0-4.3%
2.8-6.6%
4.4-12.8%
Malaysia 0-30%
0-10%
15%
20%
0-20%
0-20%
New Zealand
0-5%
0-5%
0-5%
5%
0-5%
0-10%
Vietnam 0-5%
12%
12%
12%
0-12%
5-20%
United States
0-13.2%
0-25%
0-18.5%
0-12%
0-14.1%
0-32%
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Ad Valorema Tariff Range
Non-
Woven
Woven
Industrial
Country Yarn Fabric
Knit Fabric
Fabric
Fabric
Apparel
Other Countries
China 2
-10%
10-14%
10-12%
10%
8-14%
14-25%
European
0-5% 3-8% 6.5-8%
4% 4-8%
6.3-12%
Unionc
Philippines 1-10%
1-10%
1-10%
15%
0-15%
1-15%
Thailand 1-5%
5-17.5%
5%
5%
1-30%
10-30%
Source: CRS with information from U.S. Department of Commerce, Office of Textiles and Apparel (OTEXA).
a. Ad valorem tariff rates are based on the value of the goods.
b. Textile and apparel goods manufactured in the United States enter Canada and Mexico duty-free under
NAFTA if they qualify under the rules of the agreement.
c. Members of the European Union apply the EU common external tariff to goods from non-EU countries.

Author Contact Information

Michaela D. Platzer

Specialist in Industrial Organization and Business
mplatzer@crs.loc.gov, 7-5037

Acknowledgments
CRS specialists Cathi Jones and Michael Martin helped to shape this report by providing significant input
on rules of origin and textile trade with Vietnam, respectively.
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