Generally, those provisions were met in a manner that enabled enough members of the NCTO to lend their support to the deal, which was affirmed by its board late Wednesday after each of its four councils met in breakout sessions to discuss, Tantillo said. And getting those objectives included in the TPP came only after years of engagement with U.S. government officials and pushback by other groups, including retailers, brands and importers, along with signatory country Vietnam, which was poised to gain the most from the deal as it relates to textiles and apparel.

“I am very pleased that after a lot of hard work and a lot of effort on the part of many of the companies represented here at the CEO level, the U.S. government actually produced a reasonable agreement,” he said. “They accepted our position over the objections of many other U.S. stakeholders, to include a yarn-forward rule. The Vietnamese aren’t happy with that. But this was a major concession to us.”

Tantillo went on to say that the agreement isn’t perfect, however, related mostly to exceptions to the rules of origin. In the area of short supply – which allows exceptions for yarn or fabric that isn’t available in TPP countries and can be subjective – most products on the list are acceptable, he said. But one component on the list, which he did not specify, touched some sensitive areas and “stepped over the line,” he said.

“There is a bit of deficiency there, but looking at it in a universal fashion, the rule is better than what we got in NAFTA, better than we what got in CAFTA and better than we what got in the most recent agreement, the Korean Free Trade Agreement – all of which had these same types of exceptions but in a broader sense and included Tariff Preference Levels (TPLs),” Tantillo said. “So the rule of origin was a positive, for the most part.”

TPLs are special provisions that provide preferential quotas up to a specific quantity of exports to get duty-free treatment. Vietnam was pushing for 500 million square meters of apparel goods to have access to the U.S. market, which it likely would use to ship excessive products in the most sensitive categories, Tantillo said.

“We insisted to our government that there be no TPL,” he said. “Don’t tell us that we have the rule, then create such a major loophole that would make it a yarn-forward rule in name only. So we’re extremely pleased that the U.S. government refused to include a Tariff Preference Level – even though the Vietnamese were asking for it and U.S. brands and retailers were asking for it.”

Currently, Vietnam sources about 90 percent of its textile inputs from China, though it is investing in yarn and fabric production in its own country, Tantillo said. But at the moment, Vietnam heavily depends on outside sources to supply yarns and fabrics.

“The Vietnamese are not pleased with a yarn-forward concept,” he said. “They wanted a rule that would allow them to keep their current textile supply chain in order and still get duty-free treatment. But the rule says, “you can do the cutting and sewing in Vietnam but you have to buy the yarn and fabric from some other TPP country such as the United States.’ ”

On the matter of tariff phase-outs, negotiators developed a three-basket category to determine the sensitivity of products and a timeline for inclusion, he added. Those categories are:

• A Basket – least sensitive products selected for immediate duty-free treatment;

• B Basket – moderately sensitive products selected for a five-year linear duty phase-out; and

• X Basket – most sensitive products selected for a 10- to 12-year phase-out.

The U.S., Tantillo reported, agreed to put about 52 percent of Vietnam’s export products into the X Basket, which is much better than Korean Free Trade Agreement, where 96 percent of included products were placed in the A or B Basket, he said.