Nicaraguan Tariff Preference Level Extension Act of 2013

Mr. President, I rise today to introduce legislation to extend a critical textile and apparel trade program with Nicaragua, currently set to expire at the end of 2014 through the end of 2024.

This is a unique program which benefits not only Nicaraguan apparel factories and U.S. apparel companies and retailers, but U.S. fabric and yarn mills as well.

Let me explain.

In an effort to promote trade between the United States and Nicaragua, the 2006 Central American Free Trade Agreement, CAFTA, allows Nicaragua to export to the United States a limited amount of apparel products duty free regardless of the source of the yarn or fabric.

Specifically, this Tariff Preference Level, TPL, allows Nicaragua to export 100 million square meter equivalents, SMEs, of apparel made with fabric from non-CAFTA countries as long as the apparel is assembled in Nicaragua.

In order to ensure that U.S. fabric producers could also take advantage of this program, it contains a special rule for trousers.

It requires Nicaragua to purchase one square meter of U.S. fabric for every one square meter of non-CAFTA woven trouser fabric.

That is, under this ``one for one'' rule, for each export of woven trousers made from non-CAFTA fabric, Nicaragua agreed to export to the U.S. an equal amount of woven trousers made of U.S. fabric, up to a certain level 50 million square meter equivalents.

This ``one for one'' feature has been especially successful, resulting in an increase in U.S. fabric exports to Nicaragua and an increase in apparel production jobs in Central America.

In fact, since 2006, when the program went into effect, U.S. fabric exports to Nicaragua have nearly doubled from $57.3 million to $110.2 million.

Nicaragua is now the fastest growing market for U.S. fabric exports to the CAFTA region.

Nicaragua has also greatly benefited from this program.

I would remind my colleagues that Nicaragua, with a GDP per capita of $3,300, is the poorest country in Central America and the second poorest country in the Western Hemisphere.

Approximately 42.5 percent of Nicaragua's population lives below the poverty line.

It is vital that Nicaragua develop and grow new export opportunities to help lift its people out of poverty. And that is what this program has done.

Since 2006, total apparel exports from Nicaragua to the U.S. have doubled. The program now accounts for 25 percent of those exports.

Between 2005 and 2013, jobs in the apparel sector in Nicaragua have grown

by 23 percent. That is, 13,236 new jobs have been created since CAFTA went into effect.

With a program that has proven to be so successful and mutually beneficial, it is appropriate for Congress to extend it and ensure that these benefits continue.

Some of my colleagues may wonder why I am introducing legislation now to extend a textile and apparel trade program that will not expire until the end of 2014.

The simple answer is that an early renewal is critical for business planning purposes.

U.S. companies that have taken advantage of this program are making decisions now about their long-term investments and where they will source apparel products.

Extending this program several months before its expiration date will help give U.S. companies the necessary confidence to continue to invest in Nicaragua and take advantage of its benefits.

If we wait until the last minute to extend the program, the ties that have been developed between U.S. and Nicaraguan companies and the benefits accrued will be put at risk.

Simply put, U.S. companies will not make the commitments to Nicaragua if there is a chance the textile and apparel trade program will lapse.

They will look elsewhere for new business opportunities to avoid what would in essence be a new trade barrier to U.S. textile exports and U.S. apparel companies in Nicaragua.

And as U.S. apparel orders from Nicaragua decline, U.S. textile exports to Nicaragua will also decline. Jobs will be lost.

U.S. companies are looking for assurances that the U.S. is committed to this program after 2014 and that is why this legislation is needed now.

It is supported by the American Apparel and Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, and the United States Association of Importers of Textile and Apparel.

It is a win-win trade program promoting jobs and economic growth in both countries.

Nicaragua will be able to continue to develop a vital export industry and U.S. apparel companies, retailers, and textile manufacturers will continue to access a growing, thriving market in Central America.

I urge my colleagues to support this legislation.

Mr. President, I rise today to introduce legislation to extend a critical textile and apparel trade program with Nicaragua, currently set to expire at the end of 2014 through the end of 2024.

This is a unique program which benefits not only Nicaraguan apparel factories and U.S. apparel companies and retailers, but U.S. fabric and yarn mills as well.

Let me explain.

In an effort to promote trade between the United States and Nicaragua, the 2006 Central American Free Trade Agreement, CAFTA, allows Nicaragua to export to the United States a limited amount of apparel products duty free regardless of the source of the yarn or fabric.

Specifically, this Tariff Preference Level, TPL, allows Nicaragua to export 100 million square meter equivalents, SMEs, of apparel made with fabric from non-CAFTA countries as long as the apparel is assembled in Nicaragua.

In order to ensure that U.S. fabric producers could also take advantage of this program, it contains a special rule for trousers.

It requires Nicaragua to purchase one square meter of U.S. fabric for every one square meter of non-CAFTA woven trouser fabric.

That is, under this ``one for one'' rule, for each export of woven trousers made from non-CAFTA fabric, Nicaragua agreed to export to the U.S. an equal amount of woven trousers made of U.S. fabric, up to a certain level 50 million square meter equivalents.

This ``one for one'' feature has been especially successful, resulting in an increase in U.S. fabric exports to Nicaragua and an increase in apparel production jobs in Central America.

In fact, since 2006, when the program went into effect, U.S. fabric exports to Nicaragua have nearly doubled from $57.3 million to $110.2 million.

Nicaragua is now the fastest growing market for U.S. fabric exports to the CAFTA region.

Nicaragua has also greatly benefited from this program.

I would remind my colleagues that Nicaragua, with a GDP per capita of $3,300, is the poorest country in Central America and the second poorest country in the Western Hemisphere.

Approximately 42.5 percent of Nicaragua's population lives below the poverty line.

It is vital that Nicaragua develop and grow new export opportunities to help lift its people out of poverty. And that is what this program has done.

Since 2006, total apparel exports from Nicaragua to the U.S. have doubled. The program now accounts for 25 percent of those exports.

Between 2005 and 2013, jobs in the apparel sector in Nicaragua have grown

by 23 percent. That is, 13,236 new jobs have been created since CAFTA went into effect.

With a program that has proven to be so successful and mutually beneficial, it is appropriate for Congress to extend it and ensure that these benefits continue.

Some of my colleagues may wonder why I am introducing legislation now to extend a textile and apparel trade program that will not expire until the end of 2014.

The simple answer is that an early renewal is critical for business planning purposes.

U.S. companies that have taken advantage of this program are making decisions now about their long-term investments and where they will source apparel products.

Extending this program several months before its expiration date will help give U.S. companies the necessary confidence to continue to invest in Nicaragua and take advantage of its benefits.

If we wait until the last minute to extend the program, the ties that have been developed between U.S. and Nicaraguan companies and the benefits accrued will be put at risk.

Simply put, U.S. companies will not make the commitments to Nicaragua if there is a chance the textile and apparel trade program will lapse.

They will look elsewhere for new business opportunities to avoid what would in essence be a new trade barrier to U.S. textile exports and U.S. apparel companies in Nicaragua.

And as U.S. apparel orders from Nicaragua decline, U.S. textile exports to Nicaragua will also decline. Jobs will be lost.

U.S. companies are looking for assurances that the U.S. is committed to this program after 2014 and that is why this legislation is needed now.

It is supported by the American Apparel and Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, and the United States Association of Importers of Textile and Apparel.

It is a win-win trade program promoting jobs and economic growth in both countries.

Nicaragua will be able to continue to develop a vital export industry and U.S. apparel companies, retailers, and textile manufacturers will continue to access a growing, thriving market in Central America.

I urge my colleagues to support this legislation.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.