Day: October 15, 2023

FASH455 Video discussion: What global trade deals are really about?

Instructions: In the next few weeks of FASH455, we will learn about many technical aspects of free trade agreements related to apparel sourcing and trade, such as the preferential tariff rates, apparel-specific rules of origin, and trade agreement utilization. However, this presentation takes a different perspective on trade deals– why they are NOT solely about job creation, why trade agreements increasingly focus on “measures behind borders,” and why international institutions like the World Trade Organization (WTO) were established.

Feel free to share your thoughts on the video. You may focus on 1-2 specific points that you find interesting, intriguing, controversial, or debatable and then explain your arguments. You could also propose additional discussion questions for your classmates.

Terminologies mentioned in the video and background notes:

  • Quota: A quantity restriction on imports. Before 2005, the global textile and apparel trade was subject to 30 years+ quota restrictions. See here for the background information.
  • Tariff: A tax levied on imports only. Deemed as “import-sensitive,” US still imposes a much higher tariff rate for textile (8.0%) and apparel products (11.6%) than other manufactured goods (2.2%) on average in 2023. See the World Tariff Profile 2023.
  • Non-tariff barriers (NTB): refers to trade barriers other than tariffs, such as technical barriers of trade (TBT), Sanitary and Phytosanitary (SPS) measures, customs procedures, import licensing, and many others. See more examples here.
  • GATT and WTO: The General Agreement on Tariffs and Trade (GATT) was a temporary international treaty signed in 1947 by 23 countries (including the United States). GATT aimed to boost trade-led economic recovery after World War II. Since then, GATT members conducted nine major rounds of negotiations to gradually reduce trade barriers, ultimately establishing the World Trade Organization (WTO) in 1995 as the permanent body governing world trade.
  • Trans-Pacific Partnership (TPP): A trade agreement reached by eleven countries in the Asia-Pacific region (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) and the United States in 2016. However, the Trump Administration announced the withdrawal of the United States from TPP in January 2017. Afterward, without the US, the other 11 TPP members reached the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which officially entered into force in December 2018.