Publication Number: 3783

Report Title: Certain Yarns and Fabrics: Effect of Modification of U.S.-Singapore FTA Rules of Origin for Goods of Singapore

Investigation Number: 103-010

Author's name(s): Robert Wallace

Date Published: May 2005

Report Description/Introductory Text: The report considers the probable effect on U.S. trade and production of proposed rule of origin modifications to the U.S.-Singapore FTA for certain cotton and manmade fiber apparel. The proposed Singapore FTA rule of origin changes would affect trade of certain apparel of yarn of micro modal fibers and U.S. pima cotton; apparel of woven cotton flannel fabric; blouses of woven cotton shirting fabric; and apparel of micro-denier, solution-dyed open-end spun viscose yarn. The Singapore FTA rule of origin changes would allow certain apparel containing non-originating yarn or fabric to be considered originating for purposes of the Singapore FTA. For each of the apparel articles, the proposed rule of origin changes likely would have a negligible effect on U.S. trade with Singapore, U.S. total trade, and U.S. production.

This investigation provides an overview of the global logistic services industry, including major industry players, factors driving growth, and industry operations; examines trade and investment in selected logistic service markets; identifies existing impediments to the provision of international logistic services; and examines the potential effects of removing impediments on trade.

Demand for logistic services, which involve planning, managing, and executing the transport of goods within global supply chains, is largely driven by firms’ increasing desire to outsource some or all logistics-related activities to specialists. Such specialists are better able to manage global supply chains that are increasing in complexity as a result of globalization, production techniques such as "just-in-time" (JIT) manufacturing, and electronic commerce. Trade liberalization contributes to the growth of logistic services by reducing tariffs and eliminating nontariff barriers, thereby increasing merchandise trade flows.

However, impediments remain, especially in customs clearance, where varying levels of inefficient procedures delay shipments and increase import costs. Other impediments include restrictions on investment, non-transparent or discriminatory licensing procedures, and labor restrictions. These impediments may be horizontal in nature, affecting all service suppliers equally, or they may be sector specific. Transportation services, a component of logistic services, may be further impeded by domestic regulations that prohibit competition or limit access to essential facilities, such as ports. Some of these impediments may be addressed unilaterally by, for example, transportation sector liberalization; or through multilateral, regional, or bilateral trade negotiations.

The Commission’s econometric analysis demonstrates that both U.S. merchandise exports and foreign merchandise exports transshipped through the United States are sensitive to the availability and quality of logistic services in the importing country. Lower levels of logistics-related trade impediments - especially with respect to airport, seaport, and customs procedures - in the importing country are associated with higher U.S. merchandise exports. The effects on trade are most robust for U.S. airborne exports, which tend to be time-sensitive, higher-valued exports. For countries that have the weakest logistic services environments, as measured by responses to the supplier questionnaire developed for this report, analysis shows that the reduction or removal of impediments could lead to significant percentage increases in U.S. merchandise exports.

Topics Covered: Singapore, Singapore FTA, rule of origin, apparel, trade, yarn, fabric

Countries: Singapore

HTS Numbers: 61, 62, 5208, 5210, 5510

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