June 6, 2002
United States International Trade Commission
500 E Street SW
Washington, DC 20436
RE: Public Comments by American Apparel & Footwear Association on Possible US-Taiwan
Free Trade Agreement (Investigation Number 332-438)
To Whom It May Concern:
On behalf of the American Apparel & Footwear Association – the national trade association for the
apparel and nonrubber footwear industries – I am submitting these comments in response to the request
for comments on probable effects of a U.S./Taiwan Free Trade Agreement. I regret that we were not
able to submit these comments sooner and would ask, that to the extent feasible, that you accept these
comments submitted outside the comment period.
AAFA supports the proposed negotiation of a free trade agreement with Taiwan. In general, it is difficult
to say how a US-Taiwan Free Trade Agreement (USTFTA) would affect the United States because, at
this early stage, we do not yet know what the terms of the agreement would be. For instance, a trade
agreement that contains a highly restrictive rule of origin with a long phase out on duties would
probably have a negligible effect since it would be commercially meaningless for the industry. One that
has a more flexible rule of origin or a liberal tariff phase out schedule would be much more
commercially meaningful and could affect trade flows beneficially.
In no instance do we believe that a USTFTA would have an adverse impact on the United States or the
apparel and nonrubber footwear sectors of this country. On the contrary, a properly executed USTFTA
could be beneficial for U.S. companies, their workers and their communities.
In the case of nonrubber footwear, the United States imported 14.98 million pairs in 2001 worth $70.69
million. This means that Taiwan was the 8th largest source of nonrubber footwear. However, since
nearly all nonrubber footwear imports originate in China, Taiwan only represents 0.62% of total US
imports. In contrast, in 1990, Taiwan was the United States’ 2nd largest source at 188.48 million pairs
or 16.8% of total imports. It is unlikely that a USTFTA would restore Taiwan to this level. Even if it
did, the increase in trade would most likely only displace other Asian production since nearly all US
production is anchored in niche, specialty, or targeted export markets.
Taiwan was the 24th largest nonrubber footwear export market for the United States in 2001. During
that year, the United States exported 67,272 pairs worth $1.16 million or 0.24% of total U.S. exports.
Given Taiwan’s status as a marginal export market for the US nonrubber footwear industry, it is difficult
to see how a USTFTA would create significant new markets for US exporters. However, the reduction
1601 North Kent Street, Suite 1200, Arlington, VA 22209 www.apparelandfootwear.org p (703) 524-1864 (800) 520-2262 f (703) 522-6741
of Taiwan’s current tariffs would make US exports more competitive. In addition, our companies would
benefit from greater adherence in Taiwan to world-class international property protections, which would
protect their brands from piracy and from knock-offs.
Taiwan is a slightly larger source of apparel imports and, therefore, constitutes a more important country
for the apparel trade. In 2001, it was the 9th largest source of apparel with 614.13 million square meter
equivalents (SME) worth $1.81 billion and representing approximately 4% of total imports. In contrast,
in 1990, Taiwan was the United States’ 3rd largest import source with more than 700 million SME.
Given the range of sourcing options that are currently available, we do not envision Taiwan significantly
growing its apparel exports to the United States under a USTFTA. However, a commercially meaningful
USTFTA would greatly benefit the production that currently exists, making it unlikely that Taiwan
would see its share of the US apparel market decline further.
As with footwear, Taiwan does not represent a significant export market for US apparel production.
Taiwan is currently the 27th largest export market for apparel. In 2001, US apparel exports equaled
$12.81 million or less than 1/2 of 1% of total US apparel exports worldwide. Accordingly, we don’t
envision more liberalized access to Taiwan under a USTFTA to stimulate US export sales significantly,
although we do support the reduction of tariffs and other import fees that Taiwan assess on US textile
and apparel products. We also believe that a USTFTA that places greater adherence to intellectual
property rights issues would stimulate greater sales opportunities for US brands by removing
counterfeits from the marketplace.
Thank you for the opportunity to provide comments on this issue. Please contact me if you have any
Senior Vice President