Nonwovens by FDI

What is the TPP?

The Trans-Pacific Partnership Agreement is a Free Trade Agreement between the United States and 11 countries, most of which are located in the Pacific Rim. Participating countries include: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

US textile and apparel exporters now have duty-free market access to six of the TPP partnering countries. With the agreement, the U.S. could increase exports to these countries, positively impacting our economy and decrease some dependency of many of these countries on China.

How does it affect nonwovens?

Peter Mayberry, a contributing editor to Nonwovens Industry, wrote an extensive commentary regarding TPP in the July issue.

In the article, Mayberry noted that the TPP will result in a $257 million increase in U.S textile exports over the 2032 baseline. He cites the International Trade Commission (ITC) report that explains that nonwovens will be especially positively impacted. Prior to the trade agreement, Japan and Vietnam paid duties on nonwovens of 4.3% and 12% respectively. The new agreement would make these products duty free. Since nonwovens are among the top textile products shipped to these countries by the US, the agreement is likely to be significantly positive.

Additionally, these Pacific countries are already experiencing market growth for nonwovens. As their GDP increases along with increasing individual incomes, extended growth is expected especially for hygiene products in this area of the world.

This new agreement should provide an expanded path into these emerging markets for US nonwovens. We look forward to seeing the data over the coming year or two to see how this agreement will impact our market.