Proposed legislation aims to open up new trade opportunities for the apparel and footwear industry.
A new trade agenda is being debated by congress in the U.S. which could have a massive effect on wholesalers. Changes which have been tabled to the Trade Promotion Authority (TPA) Bill could open up new trade avenues and remove barriers to promote profitable trade between retailers, wholesalers, and manufacturers from a variety of regions, most specifically Asia and the Pacific Rim.
It is hoped that the proposed measures will increase trade while cutting overheads which will reduce prices, saving average American consumers a substantial amount when buying apparel and footwear. Furthermore, wholesalers could stand to benefit greatly from the TPA Bill as it would allow them to trade at reduced costs with foreign re-sellers and retailers.
Eliminating Costs
Should the legislation be passed, wholesalers trading with retailers in international territories will pay fewer tariffs. This applies to both exports and imports. Significantly, with less money being absorbed by trade duties, American goods could become more affordable in countries where the standard of living is significantly lower. In essence, the new legislation will allow the American government to negotiate new trade agreements with regions which will make American products competitive in price in the context of the global marketplace.
In terms of consumer focus, a staggering 95% of apparel and footwear customers buying American goods live in foreign countries. For this reason many within the industry are citing the TPA legislation as a critical step towards protecting American business interests, and ensuring that they can trade more freely with those who wish to buy their products.
The importance of this bill cannot be underestimated in terms of the U.S. Economy, which may be a motivating factor behind the new legislation. It is estimated by the American Apparel & Footwear Association (AAFA) that over four million jobs are dependent on international trade within the apparel and footwear sector. Furthermore, the industry contributes $361 billion in terms of retail sales, and so ensuring that manufacturers, and therefore wholesalers, can remain competitive with increasingly cheaper foreign alternatives is of paramount importance.
Building Bridges
Should the TPA Bill be passed, wholesalers will be able to sell goods internationally and import brands at reduced costs. If these savings are then passed on to consumers, the fashion wholesale industry could experience a significant boon for many years.
Further reading:
What’s Really in the New Trade Promotion Authority Bill?
Ron Wyden’s case for giving Obama the authority to strike a trade deal
