American companies disappointed by USTR's latest review

Leaders of the American apparel, footwear and outwear companies expressed disappointment over the United States Trade Representative's latest review of trade privileges as they will not benefit from the decision.

The USTR in its annual review last month has allowed duty benefit to some travel goods like luggage, handbags and backpacks from least-developed beneficiary countries and nations covered by the African Growth and Opportunity Act

But these countries will not be able to supply the goods to the US in the near future as they are still developing their production capacity and capability.

“We are deeply disappointed with President Obama's decision,” said Rick Helfenbein, president of the American Apparel & Footwear Association, in a statement.

Bangladesh, which is strong in outwear products and travel goods, however, has been left out of the list of beneficiary countries for the USTR's Generalised System of Preferences scheme this time as well.

The country was first suspended from the scheme in April 2013, shortly after the Rana Plaza collapse, due to shortcomings in workplace safety and poor labour rights in the garment sector.

The Obama administration then provided Bangladesh with a 16-point action plan to win back the trade benefits.

It has already submitted its progress report on the action plan, which fell short of the USTR's expectations. More needs to be done to regain the trade benefits, it said.

“If President Obama had granted benefits to travel goods from all GSP-eligible countries, we estimate the industry would have received benefits that could exceed $75 million dollars during the first year alone,” Helfenbein said in the statement.

The leaders of the AAFA, Outdoor Industry Association, Sports & Fitness Industry Association and Travel Goods Association wrote a letter to USTR Michael Froman expressing disappointment over the review.

The failure to make a decision regarding other GSP-eligible countries that also face significant development and political challenges, and many of whom are US allies, leaves companies with few options but to source from the super-competitive China, the leaders mentioned in the letter.