Writing for the June 6 edition of the Wall Street Journal, John W. Miller is to be commended for succinctly outlining an issue that has been a bug-a-boo for the global nonwovens industry for years:U.S. versus EU Rules of Origin.
Simplifying an extremely complex matter into several sentences, Miller notes that the EU Parliament and the European Commission have both approved a proposal mandating use of "Made in" labels on 11 categories of manufactured products offered for sale in Europe—including textiles—indicating where the product originated.He points out that this proposal is widely unpopular with EU business groups and is also opposed by the U.S. Chamber of Commerce and other U.S. business interests.
One thing the opposition points to, according to Miller, is the impact that differing trade policy between the U.S. and the EU regarding Rules of Origin has on determining which "Made in" label is placed on a finished product.
As he neatly summarizes: "Take a chair assembled in Thailand with wood from Indonesia.Under EU rules, the chair would be labeled 'Made in Thailand' because that is where the wood was turned into a chair, but the U.S. considers origin to be where the product acquires most of its value.So if the wood was expensive and made up most of the piece's value, the same chair would get a 'Made in Indonesia' sticker.
For nonwovens, long-standing U.S. policy has been that a roll good manufactured in the U.S.can not be considered a product of the country unless it is made primarily from fibers and other components that were also manufactured in the U.S.This so-called "fiber forward" rule is widely yet somewhat uniquely ingrained in U.S. trade policy related to textiles.
Several years ago, INDA, Association of the Nonwoven Fabrics Industry, convened an International Trade Advisory Board—an extremely transparent group open to all industry participants—for the first time and, early on, INDA's ITAB adopted a policy position advocating U.S. revision of the fiber forward rule (solely as it applies to nonwoven roll goods) in favor of a rule that would assign U.S. origin at the point where the greatest value is added: on the manufacturing line.
Formal adoption of this position was championed by several factions within INDA's vast membership as a common sense means of easing global trade and was eventually approved in recorded votes by INDA's executive committee and board of directors.
The effort was not without its detractors, however, and certain INDA contingencies were openly hostile to the position statement as well as efforts undertaken to promote it with government officials.
Flash forward several years and here we go again!Now that INDA has decided to re-convene its ITAB (please see Capitol Comments, Nonwovens Industry magazine, May, 2011), it will be interesting to see how the association chooses to address the issue moving forward and how closely the ITAB's stance on the fiber forward rule—whatever that turns out to be—aligns with positions taken by EDANA and numerous other stakeholder groups, as well as each member in the association's highly-diversified base.