To promote US manufacturing over China’s, the Americas Act offers billions of dollars in incentives for more environmentally friendly and ethical working methods. Abigail Turner asks the SMART Association why it supports the bill.
The Secondary Materials and Recycled Textile (SMART) Association has announced its “strong support” for the Americas Trade and Investment Act (the “Americas Act”), a piece of legislation that includes more than US$14bn in federal incentives to support businesses involved in resale, waste sorting and recycling as part of a wider move to reduce America’s reliance on Chinese manufacturing.
Spearheaded by Senators Bill Cassidy (Louisiana) and Michael Bennet (Colorado), the bipartisan legislation aims to boost domestic circularity and innovation in the US while also addressing issues including reshoring, onshoring and the threat of forced labour in supply chains. The circular fashion sector may prove an unlikely beneficiary of this legislation, if it goes ahead.
Jessica Franken, SMART’s director of government affairs explains: “We specifically work to influence legislation and regulation. Our primary method of influence is through engagement in the policy development process. We monitor the development of legislation and regulations right from the start, and by identifying issues and assessing what their impact will be we inform our membership about best practice.”
If enacted, the Americas Act would support US domestic circular businesses and textile manufacturing, incentivise reshoring and nearshoring manufacturing from China to the US by putting in place measures aimed at reducing exposure to forced labour in Xinjiang and close the ‘de minimis’ loophole, which eliminates duties on shipments under US$800.
The bill, which is a major piece of legislation covering issues beyond textiles such as the expansion of US free trade, will be referred to the Senate Finance Committee following its public announcement on 6 March.
Franken says the America’s Act is a “good example” of SMART’s work. She says: “We take a more democratic pursuit of the process where we monitor, review, and engage our members through education. And when there is an issue, we directly engage with the public officials involved. This process has been successful throughout the years, and we’ve been effective in utilising it.”
As an international trade association, SMART aims to strengthen the economic opportunities for its members by promoting the interdependence of the for-profit textile recycling industry segments and provides a common forum for networking, education and advocacy.
Currently SMART has 191 companies that are members, with a near 50/50 split of those who are domestic and international. In 2015 there was threat of a potential ban on US clothing shipments to the East African Community, which Franken says, “is an important destination for our members’ exported products of second-hand clothing”. Working with US government officials to push back against the ban utilising a process that is referred to as the “African Growth and Opportunity Act (GOA)” – a piece of legislation providing unilateral trade benefits to various sub-Saharan African countries – SMART saw in exchange for trade access to the US these countries agreed to meet “a whole host of obligations”, including keeping markets open to US exported products.
Franken says: “We were able to work with the US government in order to use that Act to halt the ban from moving forward. That was significant accomplishment.”
SMART hopes to apply this same influence in the movement of the Americas Act. Key provisions of the Act related to textile recycling and reuse include the creation of textile reuse and recycling grants/loans with US$3bn in grants, US$10bn in loans, US$1bn for innovation R&D, and US$100m for public education campaign against fast fashion. There will also be a 15% net income exclusion for qualified textile reuse and recycling activities.
The legislation would look to enhance the US’s competitiveness and the competitiveness of the Americas and the Western Hemisphere against rivals such as China, according to Franken.
She adds: “But the reason that we are particularly speaking out about this legislation is because of the opportunities that it specifically seeks to create for textile recycling and reuse. Our industry makes such a significant impact in the number of materials that are diverted from landfills each year.”
She references how the US Environmental Protection Agency (EPA) released information showing how textile recycling is “actually more beneficial” than recycling substances such as plastic, glass and yard waste, in terms of the amount of impact that it has on greenhouse gas emissions.
“We’re very excited when you have a piece of legislation that looks to support our industry, and seemingly recognises some of the contributions our industry is making. And so, again, to see the federal government, in a piece of legislation proposing funding for these grants and loans and tax centres, incentives that specifically target, textile recycling, and reuse, we were delighted to see that.”
SMART is confident that the legislation would allow the industry to expand its existing operations. “By strengthening our industry segment, it will help reduce the carbon footprint of textiles,” adds Franken. “And also improve the environmental standards of textiles, while reducing waste and creating opportunities to create new jobs and expand existing opportunities.”
However, there is no clear timeline for the Americas Act, if the legislation is passed. But SMART is “heartened” by its introduction at federal level.
Franken says: “We’d love to see more measures like this being introduced, both at federal and state level, that are focused on the government funding opportunities, as well as support for education and awareness raising among the public about the benefits and opportunities that are created by textile recycling.”
However, she says there are still “quite a few officials” who don’t “fully grasp or maybe don’t fully understand” the benefits that the textile industry creates. Franken adds that there is an “uneven application of these types of law” in the US, and so SMART’s task is to help drive awareness to both the public officials and the public about the positive contributions being made by the textile industry in terms of landfill diversion, greenhouse gas reductions and employment overall.
In terms of creating a circular economy Franken is confident that the textile industry can rise to the challenge.
She says: “I’ve seen throughout the years the industry has risen to the occasion whenever a challenge has arisen. I think by having consistent support from various government officials across the board, which is something that we haven’t always had, hopefully we will be able to overcome that challenge and continue to raise awareness and invest in recycling initiatives.”
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