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LEGISLATIVE UPDATE
Fourth Quarter 2012.
Americans re-elected Barack Obama as President and Joe Biden as Vice President on November 6, 2012. Election night capped a seemingly endless political season marked (and marred) by negative campaigning, record-setting political expenditures, and memorable political gaffes and zingers. M to the chagrin of a campaign-weary public, it also signaled the beginning of the 2014 mid-term and 2016 Presidential races, as pollsters, politicians, and pundits began to speculate on the prospects of likely candidates. Many are also trying to understand the origins of President Obamas electoral victory as well as the causes of Governor Mitt Romneys electoral defeat to learn lessons for future campaigns and also figure out how the election will affect the agenda for the coming months. Several themes from the election seem to have emerged: First, although a huge majority of Americans remain deeply concerned over the economy, and the lingering high unemployment rates and budget deficit, a slim majority apparently felt or trusted President Obama would do a better job of steering back the nation to more sustainable economic recovery. Not surprisingly, policy discussions in the wake of the election have focused almost exclusively on a range of looming economic and budget issues. Second, the nation remains deeply divided along both ideological and partisan lines. President Obamas popular and electoral margin of victory in 2012 was less than in 2008. Although Republicans still control the House, they will do so with a smaller majority. Senate Democrats actually widened their majority control, but they are doing so with the help of several Independents and freshmen who were surprisingly (and in some cases narrowly) elected from states which strongly supported Governor Mitt Romney. Third, there seems to be a collective national mood of being fed up with Washington. Debilitating partisan gridlock has prevented Congress from addressing many serious issues. Congressional action for much of the past years has been with several notable exceptions confined to passing stop gap measures or extensions to prevent deadlines and other action-forcing events from actually forcing action. While some have pointed to the 112th Congress as a do-nothing Congress, others have perhaps more accurately labeled it the kick-the-can-down-the road Congress. Fourth, many are also crediting the Obama campaigns outreach to a number of groups such as women, youth, and Hispanics as contributing heavily to the Presidents successful re-election effort. Policies that address these issues and interest groups such as immigration reform are likely to play a big role in the second term of the Administration. Finally, with 2012 being the 3rd election in a row to elect a large freshman class, the 113th Congress will feature many Representatives and Senators who are relative newcomers either to Washington or to public policy. At a minimum, this means that the next Congress will face a relatively steep learning curve as newly elected Members have to simultaneously master arcane policy issues while learning the location of the nearest bathrooms. For the remainder of 2012, Washington policy makers will focus on two major areas post-election transition and the lame duck session. Throughout November, Congressional leaders will hold elections and make leadership decisions to determine which Members will lead their respective caucuses, campaign committees, and Congressional

committees. Such Congressional reorganization is routine each year - even when neither chamber undergoes a change in partisan control - to account for retirements, electoral defeats, and intra-party challenges. The Obama Administration will also undergo transition as political appointees jockey for new jobs or depart. Several key Cabinet officials, including Secretary of State Hillary Clinton and U.S. Trade Representative Ron Kirk, have already announced they will be leaving their posts at the end of the first term. The identity and timing of such individuals replacements, as well as the effect on policies and other personnel, is currently a hot topic of discussion in Washington. Policy makers are also expected to address, or attempt to address, a wide range of issues during the lame duck session. Senate Majority Leader Harry Reid (D-NV) has already released a list of about 25 items he would like the Senate to address during the period between the election and the end of the year. While there probably will not be time to deal with most of these items, and, indeed, it is unclear just how long the lame duck session will last, it is a fair bet that Congress will resolve some issues since several were deliberately punted to this period so they could be addressed after the election. Much of the focus of the lame duck will be on the much-hyped and very serious Fiscal Cliff a package of expiring and expired tax measures, automatic spending cuts, and entitlement provisions. Economists are now warning that inaction on these Fiscal Cliff issues will push the economy back into recession and drive unemployment back over 9 percent. With an eye toward these warnings and the deep public dissatisfaction over inaction in Washington, political leaders have all indicated their willingness to work together to address the Fiscal Cliff issues. Conventional wisdom, buoyed by the cautious statements of several political leaders, is Congress will pass measures to temporarily patch these issues until early 2013, when a grand bargain can be worked out. Republicans are signaling they are willing to consider revenue enhancements such as tax increases while Democrats are suggesting they may be willing to engage in more serious entitlements reforms as a way to help close yawning federal budget deficits. It remains to be seen whether this post-election compromise rhetoric will convince a skeptical public, settle a skittish stock market or, more importantly, translate into real action. Besides the fiscal cliff items, a number of trade measures may be queued up for action. Topping the list is long-delayed legislation granting Permanent Normal Trade Relations (PNTR) to Russia and Moldova. Congress may also take up a package of miscellaneous tariff bills (MTBs) consisting of new proposals for duty relief as well extensions of hundreds of expiring provisions. Although the MTB process is supposed to be non-controversial, it has been mired in recent years by an unfortunate linkage to earmarks. Unsticking the MTB process may involve a combination of reforms to the program or a temporary extension of the expiring programs. A number of other AAFA-supported measures are also queued up for possible action during the lame duck, including the Affordable Footwear Act and a measure to strengthen the U.S./ Philippine trade partnership. Like most presidents during the beginning of their second term, President Obama is now trying to cement the legacy he wants to leave behind. This will require a closer working relationship between the Administration and Congress, which most commentators agree was lacking during Obamas first term. If both the President and the bipartisan bicameral leadership in Congress remain incentivized to work together, especially if they can work together to execute this grand bargain, the first few months of 2013 may prove to be an era of unusually productive activity. However, ever-present partisan tensions, persistent distractions caused by the next elections, and the continuing pull from far right and far left groups will continue to present obstacles which may make progress on many issues difficult.

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

INTERNATIONAL TRADE
Issues Description Status / Next Steps AAFA Position
Supported fixes, Urging extension of Nicaragua 2:1

Contact

CAFTA-DR

Permanent reciprocal free trade agreement with CAFTA-DR countries.

Efforts underway to fix problems with Dominican 2:1 program and extend Nicaraguan TPLs. Fixes enacted on sleep pants, waistbands, and short supply system effective 10/12. Entered into force 5/12. Andean Trade (ATPA) no longer in force with respect to Colombia. Entered into force 3/12.

Steve Lamar

Colombia FTA

Permanent reciprocal free trade agreement with Colombia.

Supported FTA

Steve Lamar

Korea FTA

Permanent reciprocal free trade agreement with Korea Permanent reciprocal free trade agreement with Panama. Regional free trade agreement between U.S. and 10 key Asian and Latin American countries, including Vietnam, Mexico, and Canada.

Supported FTA

Steve Lamar

Panama FTA

Entered into force 10/12.

Supported FTA

Steve Lamar

Trans Pacific Partnership (TPP)

14th round of talks occurred 9/12. 15th round in NZ 12/12. Canada and Mexico added 10/12. Japan request pending. US wants talks completed in 2013. Reintroduced in Senate in 05/11 and reintroduced in House 7/11

Supports negotiation of commerciallymeaningful agreement. Supports AFA

Steve Lamar

Affordable Footwear Act

Effort to eliminate the hidden, regressive tax on footwear.

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

INTERNATIONAL TRADE
Issues Description Status / Next Steps AAFA Position
Supports renewal

Contact

African Preferences (AGOA)

Trade preferences for duty free access for garments made in Africa.

Congress approved legislation 8/12 to extend 3rd country fabric provision to 2015. Program, including 3rd country fabric provision, expires 2015. Extended until 2020. Renewal occurred in 2010 Haiti legislation

Steve Lamar

Caribbean Basin Preferences (CBTPA) Generalized System of Preferences (GSP) GSP & Travel Goods

Preference program for Caribbean Basin countries not party to CAFTADR Duty preferences (not affecting apparel or footwear)

Supports renewal

Steve Lamar

Renewed 10/11 as part of FTA legislation. Renewal retroactive to 1/11. Expires mid-2013. Legislation introduced 8/12. AAFA is working with a coalition of associations to generate support in Congress for the initiative. Extension and expansion of Haiti trade programs approved 5/10 as PL. 111-171.

Supports renewal

Steve Lamar

New initiative to make travel goods eligible for benefits under the Generalized System of Preferences (GSP) program

Supports

Nate Herman

Haiti

Preference program for Haitian apparel exports to the United States.

Supports Haiti development and reconstruction efforts

Steve Lamar

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

INTERNATIONAL TRADE
Issues Description Status / Next Steps AAFA Position
Supports approval of MTBs

Contact

Misc. Tariff Bills (MTB)

Package of miscellaneous tariff and trade provisions, including technical corrections and duty suspensions

Linkage to earmark issue makes 2012 progress difficult. Reforms and action possible in 2012. Current MTBs expire end of 2012. Action in lame-duck uncertain. Reintroduced in 112th Congress

Nate Herman

Philippines Trade SAVE Act (S.1244/HR 2387) Trade Preference Reform

Preference program for the Philippines using U.S.-made textiles Efforts underway to conduct wholesale reform of US trade preference programs, including AGOA, GSP, and Andean. Initiative to eliminate duty on performance outerwear

Supports

Marie D'Avignon Steve Lamar

Ad-hoc business/NGO coalition pushing for harmonized and simplified program. Efforts may recommence in 2013. Reintroduced in 112th Congress. Could create funding mechanism for TC2.

Supports reform

U.S. OUTDOOR ACT (H.R. 2071/S. 704)

Supports

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

INTERNATIONAL TRADE
Issues Description Status / Next Steps AAFA Position
Supports renewal/Fix

Contact

Cotton/Wool Trust Fund

Targeted duty elimination and support programs to benefit tailored clothing and woven dress shirt industries

Legislation to renew lapsed cotton program and fix underfunding in wool program stalled in 2010. Renewed commitments by Senate leadership to advance these bills made in 112th Congress. Legislation approved by Congress to reauthorize the Export-Import Bank 7/12 included textile specific provisions. Implementation now being pursued.

Steve Lamar

Export Financing

Elimination of statutory and legacy restraints on US Export-Import Bank providing financing to US textile exports as part of Western Hemisphere supply chain.

Supported legislation. Working with Bank to implement legislative provisions. Supports renewal

Nate Herman

Trade Promotion Authority (S. 98)

Framework for creating and expediting the passage of new trade agreements.

Lapsed. Renewal unlikely in near future. Renewal legislation introduced in 2011.

Steve Lamar

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

INTERNATIONAL TRADE
Issues Description Status / Next Steps AAFA Position
Monitoring. Urging Congress and administration to focus efforts instead on real issues impacting U.S./China relationship. Supports ambitious multilateral accord.

Contact

China Currency

Increasing US and international pressure on China to revalue currency and allow currency to float.

Legislative effort to empower trade remedy actions based on currency passed Senate in 10/11 but has stalled in House. Administration continues to push China but refuses to cite it as currency manipulator.

Nate Herman

World Trade Organization (WTO) Doha Round

Multilateral talks to reduce and eliminate tariff and non-tariff trade barriers.

Negotiations collapsed in 2008. Efforts under way to see how talks can be restarted and completed.

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

MARKET ACCESS
Issues Description Status / Next Steps AAFA Position
Opposes barriers on apparel and footwear. Supports the U.S. in its case against Argentina. Opposes any punitive duties. Urges longterm resolution

Contact

Argentina Import Restrictions on Apparel/Footwear

Argentinian import restrictions on apparel and footwear including, non-automatic import licensing.

AAFA is working with multiindustry group to address issue with the U.S. and other government. The U.S. initiated a WTO case against Argentina 8/12.

Marie DAvignon

Brazil Cotton Dispute

Brazilian threat to impose punitive duties on imports of US-made products, including textile and apparel to impose WTO-approved retaliation for US cotton subsidies.

US/Brazil reached temporary agreement. No punitive duties if US pays $140 million/year to Brazil agriculture. US must end subsidies, as part of 2012 Farm Bill, or duties could be imposed.

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

MARKET ACCESS
Issues Description Status / Next Steps AAFA Position
Opposes dumping duties and new customs restrictions.

Contact

Brazil Footwear AntiDumping Duties/ Customs Restrictions on apparel/footwear

Brazilian trade barriers in the form of burdensome customs procedures, non-automatic import licenses, certificates of origin requirements, inspections, and trade remedies.

In 3/10, Brazil imposed dumping duties on Chinese footwear for 5 years. In 2011 Brazil imposed additional burdensome import requirements such as nonautomatic import licensing and new certificate of origin requirements. In 9/12, Brazil announced import tariff increases on 100 HTS lines including footwear parts. Dumping duties removed 12/11. In its place, Mexico and China have instituted an agreement on reference prices for footwear. Mexico has also instituted some sort of reference pricing scheme for Chinese apparel.

Marie DAvignon

Mexican China AD

Punitive anti-dumping (AD) duties imposed on Chinese textiles, apparel, and footwear imported into Mexico

Supported removal of AD duties and opposes new duties and new restrictions; monitoring new footwear agreement. Opposes safeguard duties.

Marie DAvignon

Turkey Apparel/Textile Safeguard

Safeguard investigation by Turkey in 2011 on Turkish imports of apparel and textiles.

Turkey imposed preliminary safeguard duties of 17-27% 7/11, much lower than the 60-80% originally proposed.

Marie DAvignon

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

CUSTOMS
Issues Description Status / Next Steps AAFA Position
Supports review of Customs.

Contact

Customs Reauthorization

Efforts by Congress to re-balance Customs trade facilitation and security roles. New tariff classification and tariff treatment of footwear with textile outsoles.

Legislation introduced in Senate in 2010, but no action. Action possible in 2013. New rules implemented 12/11 allow continued use of textile outsoles to lower duties on most footwear using textile outsoles today,with exception of rubber rain boots. Disallows textile outsoles on other footwear still produced in United States. Key definitions pending. Interagency working group addressing implementation issues related to import declaration, including publication of definitions. Enforcement of declaration currently does not affect clothing, footwear or textiles. Congressional efforts to amend law stalled in 7/12.

Nate Herman

Footwear Textile Outsole

Supported new rules to provide predictability. Urges Customs to clarify definition in new rules ASAP to eliminate uncertainty.

Nate Herman

Lacey Act

Revisions to Lacey Act, from 2008 Farm Bill, creating a new import declaration requirements for plants and plant products.

Monitoring/ Opposes burdensome requirements.

Steve Lamar

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

CUSTOMS
Issues Description Status / Next Steps AAFA Position
Opposed First Sale repeal; monitoring issue.

Contact

Proposed First Sale

CBP Proposed Elimination of Popular cost-saving import valuation method

Due to Congressional pressure, CBP withdrew its proposed elimination on 9/10. CBP/ITC completed study on use. In Europe, European Commission (EC) proposed repeal, but European Parliament now opposing repeal. Bills introduced in both chambers in 2010. Reintroduced in House and Senate in 2011. Proponents pushing to include in possible Customs reauthorization measure. Discussions with textile stakeholders to develop proposal that actually addresses problems.

Steve Lamar

Textile Enforcement Legislation (S. 1683/H.R. 2754)

Legislation that would impose burdens on U.S. textile and apparel importers to address concerns raised by domestic textile interests of enforcement problems.

Opposes bill as introduced

Steve Lamar

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

CUSTOMS
Issues Description Status / Next Steps AAFA Position
Opposes

Contact

100% Cargo Scanning Requirement

100% scanning requirement for all cargo entering the U.S., with scanning to take place in foreign ports where the loading takes place. Authorized under the SAFE Ports Act of 2006 / 9/11 Commission Act of 2007, and set to go into effect in 2014. Effort to change trucking laws to allow local ports and municipalities to regulate interstate trucking for environmental reasons. Would force independent truckers to work for union employers

Revised legislation introduced in 112th Congress under SAFE Ports Reauthorization Act. Supporting re-introduction of revised legislation

David Lapidus

Clean Ports Act/ Similar Efforts on State Level

Legislation introduced in 2011. Businesses and some ports have shown that no change is needed as current clean environmental mitigation efforts across the country are working. On-going debate in Congress and state legislatures. New classifications for LTL freight for footwear went into effect 1/10. New apparel LTL freight classifications went into effect 12/10.

Opposes

David Lapidus

Domestic Freight Rates

Reclassification of footwear and apparel by trucking group National Motor Freight Traffic Association (NMFTA) raises freight rates by as much as 50-400 percent.

Opposed reclassifications; Urging DOJ anti-trust investigation.

David Lapidus

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

CUSTOMS
Issues Description Status / Next Steps AAFA Position
Opposes

Contact

Hours of Service (HOS) Proposals

Proposals to revise rules governing amount of time truckers can drive

Industry concerned that well meaning rules may create impossible to meet burdens and drive up costs with minimal increase to safety. FMCSA released final rule which decreases the driving hours allowed in a week but not per day. The rule went into effect 2/12 and the compliance date of most provisions is 7/13. Increased interest in issue by Federal Maritime Commission and Congressional leaders. Legislation introduced in 2010. East and Gulf Coast union/ employer associations experiencing on-again, offagain negotiations over Master Contract renewal. Key union on West Coast has operated without a contract since 2010 and continues negotiations.

David Lapidus

Maritime Transportation

Increased concerns over anticompetitive shipping practices by ocean carriers on maritime cargo as a result of anti-trust immunity Labor contract negotiations on East/Gulf and West Coasts creating possible disruption.

Monitoring; Urges removal of Anti-trust protection Monitoring/ Supports resolution of union/employer contract conflicts

David Lapidus

Port Labor Situation

David Lapidus

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Monitoring

Contact

Childrens Sleepwear

Regulations governing flammability of childrens sleepwear.

CPSC reissued loungewear guidance in 12/11 and has announced renewed effort to enforce rules.New laboratory test method for sleepwear published. CPSIA 3rd party test and certification requirements now in effect Stay of enforcement on lead and phthalate testing and certification removed on 1/12. CPSC now reviewing Congressional mandate (H.R. 2715) to ease testing burdens. CPSIA Database, component parts rules, and tracking label rules also fully in effect.

Michael McDonald

Consumer Product Safety Improvement Act (CPSIA)

Federal product safety overhaul enacted in 2008.

Addressing implementation issues in the regulatory process.

Michael McDonald

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Monitoring. Seeking clarification of definitions.

Contact

Drawstrings

National standards governing drawstrings

Wisconsin/New York enforce tough guidelines. CPSC aggressively enforcing ASTM standard, declaring drawstrings (including ties) a substantial product hazard in 2011. Continuing uncertainty regarding definition of drawstrings and childrens product under standard. Upholstery rules pending. Stay of testing and general conformity certification lifted for all products subject to the standard. Applications for CPSIA being addressed Expansive reform language introduced in 2010, but stalled. Senate version reintroduced in 2011 and 2012, which also stalled.

Michael McDonald

Flammable Fabrics Review

Guidelines for flammability testing and standards for general wearing apparel.

Monitoring

Michael McDonald

Toxic Substances Control Act (TSCA) Reform

Complete overhaul of the original TSCA legislation which essentially regulates the use of chemicals in consumer products.

Monitoring/ Opposes burdensome rules.

Michael McDonald

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Opposes legal framework encouraging excessive litigation. Monitoring/ advising members on compliance tools. Monitoring/ Opposes burdensome rules

Contact

CA Prop 65

Decades old California law enabling citizen lawsuits to force labeling of products containing certain substances.

California Prop 65 activity dramatically affecting industry resulting in settlements.

Michael McDonald

Maine Toxic Chemicals in Childrens Products Law

Maine requirement for manufacturers of childrens products to report any components which contain so-called Priority Chemicals.

Reporting requirments only mandated for Priority Chemicals bisphenol-A and nonylphenols but more chemicals may be added to the Priority list in the future Regulations promulgated. Possible legislative changes being considered. Implementation phased-in, starting 8/12, depending on type of product and company size.

Michael McDonald

Washington State Childrens Safe Product Act

Washington State law requiring agencies to identify and prioritize chemicals of concern and evaluate safer alternatives

Issued industry guidance on complying with law. Monitoring/ Opposes burdensome rules

Marie DAvignon

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Monitoring/ Opposes burdensome rules Monitoring/ Opposes burdensome rules

Contact

California Green Chemistry (AB1879/ SB 509) Climate Change

California law to identify and prioritize chemicals of concern and evaluate safer alternatives.

AAFA continues to engage with the California Department of Toxic Substances Control as it finalizes these regulations. Bill to phase-in taxes on importers approved in House in 2009, but stalled in Senate. Controversial EPA proposal to regulate Greenhouse Gasses proceeding despite legal and political challenges. SEC recently clarified rules to require reporting of climate change impact in quarterly filings. Revised Guides released 10/12.

Marie DAvignon

Legislation to create cap and trade system to reduce greenhouse gas emissions. Key reduce greenhouse gas emissions. Obama Administration priority.

Marie DAvignon

FTC Revision of Green Guides

FTC updated of Guides for the Use of Environmental Marketing Claims, also known as Green Guides, which govern environmental or green marketing of products.

Monitoring/ Opposes burdensome rules

Marie DAvignon

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Supports end of mulesing

Contact

Australia Wool Mulesing

Effort to end use of mulesing in Australian wool industry (AWI). Mulesing used to prevent blowfly strike, which kills sheep

AWI voided deal with animal rights group PETA to end mulesing by 2010. Under continued pressure, AWI continuing efforts to find alternatives to mulesing. Annual renewal signed into law 8/12. Ban expires 7/13, but President can suspend ban. Reforms and U.S. government statements signal possible end of sanctions Law went into effect 1/12. Unclear yet what kind of punitive action will be taken against companies punitive action will be taken against companies. Possible enforcement actions to begin in early 2013. Federal approach being contemplated.

Nate Herman

Burma Import Ban

Import ban to force political progress

Supports continuation of democratic reforms in Burma

Nate Herman

California Transparency in Supply Chains Act (SB 657)

New law requiring companies selling in California to disclose on their website what company is doing to combat human trafficking and slavery in their supply chain.

Monitoring implementation of the law. Issued guidance to members on disclosure. Monitoring efforts to Federalize California law.

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Monitoring. Significant concerns with process used to develop/update list. Drafting industry guidelinces for compliance with law Opposes use of forced labor and forced child labor. Monitoring traceability issue

Contact

Child/Forced Labor List

Dept. of Labor (DOL) list of products & countries that use child and/or forced labor.

DOL published list in 9/09 identifying textile, apparel, and footwear products suspected of child / forced labor. DOL updated lists in 10/11 and 9/12.

Nate Herman

Conflict Minerals

New SEC reporting and disclosure requirements on products containing so-called conflict minerals.

Final regulations issued 8/12.

Nate Herman

Uzbekistan Cotton

Uzbek government forcing adults and children to work in cotton fields during harvest.

Intl Labor Org (ILO) considering case on Uzbek cotton. Multistakeholder coalition, including AAFA, pushing for U.S. government action through trafficking/human rights reports. NGOs/SRIs pushing cotton brokers/brands/retailers to boycott Uzbek cotton

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

PRODUCT SAFETY / ENVIRONMENTAL / SOCIAL RESPONSIBILITY

Issues Description Status / Next Steps AAFA Position
Supports

Contact

Berry Amendment (HR 679/S. 2114)

Requirement to source military apparel, footwear and other textile items in the United States.

DHS implemented regulations to limit TSA clothing, footwear and textile purchases to NAFTA countries and Chile. Permanent trade compliance extension of Berry amendment to DHS introduced 112th Congress. Reform legislation introduced in 112th Congress. Lame Duck action unlikely. Expected reintroduction of legislation expected early 2013.

Kurt Courtney

Federal Prison Industries (FPI) (HR 2312 and HR 3634/S. 2169)

Mandatory Source requirement for U.S. government purchases of U.S. prison-made goods.

Supports reform of Federal Prison Industries program.

Kurt Courtney

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Monitoring/To ensure it works as intended

Contact

JWOD Reforms

Possible update of 40-year old Javitz, Wagner, ODay Act that offers employment opportunities to blind and disabled Americans New procurement tools by DOD lowers the price of military equipment far below market price.

No action in 112th Congress. Possible efforts in 113th Congress.

Kurt Courtney

Reverse Auction/ Low Price Technically Acceptable

AAFA is working to eliminate DODs use of these procurement tools for Clothing & Textiles (including footwear) due to unintended consequences Anti-Counterfeiting Trade Agreement (ACTA) concluded between US, EU and other developed countries, but failed to pass in the European parliament. U.S. government has launched separate initiatives.

Opposes use of both procurement strategies

Kurt Courtney

Anti-Counterfeiting

Broad campaign to crack down on illegal trade of counterfeit products

Supports efforts to stop counterfeiting worldwide. Working with U.S. government on various initiatives/ issues.

Kurt Courtney

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Supports HR 2511 and S 3523

Contact

Design Piracy (HR 2511)/S 3523)

Legislation to extend copyright style protection to original fashion designs

Bills introduced in House and Senate, which included AAFA-supported narrow legislation. House held hearing in July 2011. Senate Judiciary Committee marked-up the bill September 2012. Action possible in Lame Duck. Group responsible for assigning domain names pushing through unprecedented, confusing expansion of domain names. Application period conconcluded. Formal objection period ends in March 2013.

Kurt Courtney

ICANN

Efforts by ICANN to expand gTLD system continue to draw concern from rightsholders.

Supports reform of ICANN system to better protect trademarks

Kurt Courtney

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Legislation stalled in Congress due to public opposition. Working with the Administration and Congress to develop new tools to protect trademarks Monitoring/ Supports the physical nexus requirement. Opposes

Contact

Rogue Web Sites Legislation

Legislation that seeks to eliminate the prevalence of websites that traffic in counterfeit goods.

Legislation stalled in 2011. PROTECT IP Act and Stop Online Piracy Act faced extreme opposition from search engines and internet service providers. Both bills are stalled indefinitely. AAFA continues to work to stop rogue Web sites from selling counterfeit and potentially harmful apparel.

Kurt Courtney

Business Activity Tax Simplification Act (BATSA) (H.R. 1439) Card Check

States levying business activity taxes based on perceived nexus in a state

BATSA reform legislation introduced in the House

David Lapidus

Proposed elimination of secret ballot to determine if a workplace wants to unionize and subjects contracts to binding arbitration.

Legislation dead. Regulatory efforts to implement have been pursued. Possible compromise plans may also see action.

David Lapidus

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Opposes efforts to limit corporate speech

Contact

Corporate Speech Limits

Efforts by Obama Administration and Congress to restrict the ability of companies to engage in political speech.

Anti corporate restrictions to overturn Supreme Court decision stalled during 2010. Administration pursuing regulatory options. Registered lobbyists still not allowed to serve on trade advisory committees. Uneven implementation process and legal challenges as companies evaluate cost and coverage impacts. Individual provisions remain. 1099 reporting requirement and Medicaid expansion repealed Reform provision on debit card fees signed into law. Senate delay effort defeated 6/11. Fed Reserve announced new debit card fee limits 6/11. New limits went into effect 10/11.

Steve Lamar

Health Care Reform

Comprehensive health care reform legislation.

Monitoring implementation of the law. Opposes Burdensome requirements

David Lapidus

Interchange Fees

Bank-imposed fees on retailers for every single credit/debit card transaction, amounting to $40 billion/year on fees.

Supports provision and other proposals to instill competition

Nate Herman

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AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Supports harmonization efforts and welcomes revisions to simplify rules. Supports enactment

Contact

Labeling

Various efforts to harmonize labeling at regional and multilateral levels

Future uncertain for harmonization efforts in WTO talks. In Fall of 2012 the FTC proposed changes to the Fur and Care Labeling Rules

Marie DAvignon

Main Street Fairness Act (HR 2701/S. 1452)

Legislation to achieve equality and streamline state sales tax collection for goods sold over internet. Funding to advance competitiveness of US industry

Revised bills introduced in 112th Congress.

David Lapidus

NTC/[TC]2

No funding secured in recent Appropriations bills. Possible grant funding opportunities through proposed Outdoor or ATTIRE Acts.

Supports

Kurt Courtney

we wear our mission

AAFA LEGISLATIVE UPDATE MATRIX |

2012 FOURTH QUARTER LEGISLATIVE MATRIX

GOVERNMENT CONTRACTS / INTELLECTUAL PROPERTY / MISC.

Issues Description Status / Next Steps AAFA Position
Supports renewal and extension.

Contact

Tax Extenders

Legislation to extend Bush tax cuts from 2001 to 2003 to renew expired tax provisions, such as the R&D tax credit, which expired at end of 2008.

Many tax cuts extended temporarily (many through 2012) in omnibus tax measure at end of 111th Congress. Further legislation introduced in 112th Congress to extend through 2013. On-going debate over broad tax reform in 20122013.

David Lapidus