Free trade agreements play a crucial role in boosting US textile and apparel industry. They allow US textile and apparel exporters to benefit from duty-free entry into other markets.
Nafta for example, is a free trade agreement between the United States, Canada and Mexico. It is an extremely important trade deal agreement for the US textile and apparel industry. Canada and Mexico are currently the largest textile markets in the region, but for the last 23 years, Nafta has been allowing a certain amount of yarns and fabrics produced outside the Nafta region to be used in apparel production within the free trade countries.
Another important free trade agreement for the US is Cafta-Dr, which involves the United States and a group of smaller developing economies, including Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua as well as the Dominican Republic. Cafta-Dr promotes stronger trade and investment ties, prosperity, and stability throughout the region and along the US’ southern border.
In 2016 US exports of fiber, yarns, fabrics, made-ups, and apparel to Nafta and Cafta-Dr countries accounted for 56 per cent of all US textile exports. All these free trade agreements provide that certain exports from member countries may enter the US market duty-free only if they are made from textiles produced in the region.