U.S. Textile Group Opposes Pakistani Garment Tax Free Promotion

Business News Agency, September 14 — U.S. textile and cotton industry groups have raised strong concerns over a proposed trade relief initiative aimed at supporting Pakistan in the wake of its devastating floods. They argue that instead of offering preferential trade terms to Pakistan, the U.S. government should prioritize providing direct humanitarian aid to the affected population. The U.S. Chamber of Commerce has urged Pakistan, which has been severely impacted by recent flooding, to seek tax-free access for certain textile and garment products into the U.S. market. This proposal, however, has drawn sharp criticism from organizations such as the National Association of Textile Organizations, the National Cotton Council, and AMTAC, who have jointly written to U.S. Secretary of State Hillary Clinton and Trade Representative Michael Kirk, expressing their deep concerns. These opposition groups warn that the plan would shift U.S. jobs overseas and could devastate the livelihoods of over 400,000 workers in the American textile and apparel sector. Amita Tantillo, executive director of AMTAC, emphasized that the U.S. should focus on sending essential aid like rain shelters, blankets, and medical supplies to Pakistan, which would not only help the country but also support American jobs. The U.S. Chamber of Commerce is advocating for an extension of the existing “Reconstruction Opportunity Zones” (ROZs) along the Pakistan-Afghanistan border, allowing specific apparel items such as cotton trousers and shirts produced in these zones to be sold duty-free in the U.S. It also suggests expanding the areas where Pakistan can establish ROZs. While the Chamber claims the proposal won’t harm U.S. textile manufacturers, opponents argue that garments made with U.S.-sourced yarn and fabric are highly sensitive export items, particularly for companies in the Western Hemisphere. Additionally, the proposal contradicts the Obama administration’s National Export Initiative (NEI), which aims to double U.S. exports within five years. By shifting job opportunities abroad, the plan undermines this goal. In response to the Chamber’s proposal, critics point out that granting Pakistan tax-free access would allow its garments to directly compete with those from Mexico, Central America, the Caribbean, and the Andean region in the U.S. market, potentially leading to job losses for American manufacturers. The letter also highlights that the Chamber’s approach undermines another key priority of the Obama administration—the Haiti Economic Lift Program Act (HELP)—as Haiti competes directly with Pakistani textiles in the U.S. market. This debate reflects a growing tension between humanitarian aid and trade interests, as U.S. stakeholders weigh the long-term impacts of policy decisions on both foreign relations and domestic employment.