The Trans Pacific Partnership may lower demand for some US textile exports. The TPP would allow western hemisphere apparel manufacturers to use yarn and fabric made anywhere in the TPP region and still enjoy preferential access to the US market. So many Vietnamese textile manufacturers could, at some future time, compete with US exporters in Mexico and Central America.

More than a third of US textile production is exported, mostly to western hemisphere nations. US textile manufacturers produce yarn, thread, and fabric for apparel, home furnishings, and various industrial applications. US manufacturers of industrial textiles may experience more direct competition from Japan, also a leading producer of industrial textiles.

TPP includes a yarn-forward rule of origin that would allow a garment to enter the US duty-free only if yarn production, fabric production, and cutting and sewing of the finished garment all occur within the TPP region. However, 187 fibers, yarns, and fabrics in short supply in TPP member countries could be sourced from outside the region, including China.

Products of western hemisphere nations have duty-free access to the US provided they incorporate US-made yarns and fabrics. However, TPP’s 11 non-US members would also have duty-free access to the US market for textiles and apparel.