GHY Tradelines

(European Commission)

In 2012, a total of 2,278 measures against dangerous non-food products, were taken by Member States and reported in the EU Rapid Information system (RAPEX). This indicates a 26% rise in alerts when compared to 2011 figures, an increase that could be attributed to the improved enforcement work carried out by the authorities in EU countries.

RAPEX is the EU rapid alert system between Member States and the Commission on non-food products. Its role is to disseminate information quickly on potentially dangerous consumer products. This allows for earlier identification and earlier removal from EU markets of products that could pose a risk to consumers, such as children’s clothing, textiles and electrical appliances which do not meet safety standards. [...]

In 2012, clothing, textiles and fashion items (34%), followed by toys (19%), were the main product categories for which corrective measures had to be taken. Among the most frequently notified risks caused by these products were chemical risks, risk of strangulation and risk of injury. Read more here.
 

(Journal of Commerce)

The North American Bangladesh Worker Safety Working Group, a collaboration of five U.S. and Canadian apparel and retail associations, has outlined a set of proposals to further its commitment to improving worker safety in Bangladesh, in the wake of recent accidents at apparel production facilities in the South Asian nation.

The Safer Factories Initiative includes short, medium and long-term strategic goals to improve the safety of those garment production facilities and workers. It would cover all apparel factories in the country and proposes training programs for electricians and engineers to ensure proper building safety standards are met, as well as training for workers and factory management on fire prevention and workplace safety. Read more here.
 

(Wall Street Journal)

Wal-Mart Stores Inc. broke with major European retailers on Tuesday by announcing its own plan for improving safety at Bangladesh garment factories. The plan is billed as a commitment, but is different from the legally-binding pact meant to prevent disasters like the building collapse that killed more than 1,100 garment workers last month.

Under its plan, Wal-Mart said it would hire an outside auditor to inspect 279 Bangladesh factories and publish results on its website by June 1. When fire and building safety issues are found, Wal-Mart said it will require factory owners to make necessary renovations or risk being removed from its list of authorized factories.

In declining to go along with the other retailers, Wal-Mart—like Gap Inc. GPS earlier this week—cited that accord’s legally binding provisions. Read more here.
 

(Stephanie Clifford – NYT)

The revolution that has swept the food industry is expanding to retail: origins matter.

With fair-trade coffee and organic fruit now standard on grocery shelves, consumers concerned with working conditions, environmental issues and outsourcing are increasingly demanding similar accountability for their T-shirts. The issue has been brought to the forefront by the garment factory collapse in Bangladesh, which killed more than 800 people.

And some retailers are doing what was once unthinkable, handing over information about exactly how, and where, their products were made. Read more here.
 

The Federal Trade Commission is accepting comments through July 8 on a proposed rule that aims to clarify and update the Textile Labeling Rules and make them more flexible, giving businesses more compliance options without imposing significant new obligations.

The Textile Rules require that certain textiles sold in the U.S. carry labels disclosing the generic names and percentages by weight of the fibers in the product, the manufacturer or marketer name, and the country where the product was processed or manufactured.
 

(Fibre2Fashion)

The Government of Canada is planning to extend the no-tariff provision for another 10 years to the Least Developed Countries (LDC) identified by the United Nations, which includes leading textile and garment manufacturing countries such as Bangladesh, Nepal, Cambodia and Myanmar.

A decade ago, Canadian Government dropped the then existing duty on textiles and clothing made in LDCs. The Government had also removed restrictions on the volume of goods that can be imported from these countries.

Subsequently, as part of the 2010 Federal Budget, the Canadian Government announced the elimination of duties on imported raw materials, which includes substantial reductions in duties on textiles, from the Least-Developed-Countries. Read more here.
 

(The Canadian Press)

Canadian clothing line Joe Fresh, sold in Loblaw stores, was among the customers of the factories operating in the building and has faced fierce customer backlash this week.

Loblaw Inc. will also be one of several major Canadian retailers to take part in an “urgent” meeting Monday with the Retail Council of Canada.

The retail council’s president and CEO wouldn’t confirm what other companies will be involved in the meeting, other than to say it will be a strong representation of retailers across the country, including those who usually participate in the council’s responsible trade committee. Read more here.
 

(Jake Maxwell Watts – Quartz)

In Bangladesh, grief over a collapsed factory has swiftly turned to anger. Rescue workers are still pulling bodies out of the ruins in the outskirts of Dhaka, the death toll has topped 275, and garment factory workers blockaded highways and attacked factories for refusing to give workers a day off to mourn. Police fired tear gas and rubber bullets at the protesters, who numbered in the tens of thousands.

Sadly, the history of the garment industry in Bangladesh suggests that little is likely to change. Garment workers are caught in a trap—work cheaply, at significant risk to your life, or don’t work at all.

In the wake of the tragedy, politicians were quick to promise action. “Whoever might be the culprits, and even if they belong to our party, they won’t go scot-free,” said Prime Minister Sheikh Hasina. But who exactly is to blame? Is it the regulatory framework that let a building with no permit be constructed? The factory owner who forced his employees to work even after cracks in the foundation were found? Or the Western clothing manufacturers that enabled Bangladesh to become the world’s second-largest exporter of cheap clothing? Read more here.

Related: Big Brands Rejected Bangladesh Factory Safety Plan (AP)

(STR Trade Report)

Effective May 1, the European Union will significantly increase the additional tariffs it levies on certain imports from the United States in response to the continuing distribution of antidumping and countervailing duty revenues to U.S. producers. Women’s denim trousers, which had been dropped from the EU retaliation list several years ago, will be hit with a 26% additional tariff, bringing the total import duty for the period May 1, 2013, through April 30, 2014, to 38%. Additional tariffs on frozen sweet corn, crane trucks, and metal eyewear frames and mountings, which had been set at 6% for the past year, will also be increased to 26%.

In an effort to further discourage unfair trade practices, the Continued Dumping and Subsidy Offset Act, or Byrd Amendment, allowed the distribution of AD/CV duty revenues to affected domestic producers for qualified expenses. Congress repealed the law in 2006 in response to an adverse World Trade Organization decision but specified that AD/CV duties collected on entries made until Oct. 1, 2007, could still be distributed, a process that remains ongoing due to the retrospective nature of the United States’ AD/CV duty system.

The additional tariffs the EU imposes are revised annually in correlation with the amount of AD/CV duty revenues distributed the previous year. U.S. Customs and Border Protection officials say that while the total amount of money available for distribution will decline over time, the specific amounts available from year to year may rise or fall depending on the total amount of AD/CV duties collected, which itself can be affected by a number of factors. For example, the conclusion of litigation affecting a large volume of entries of goods subject to AD or CV duties could result in the liquidation of those entries and therefore the release of a significant sum of duty revenues for distribution. Or, CBP may have been successful in its efforts to recover AD/CV duties that had previously gone uncollected for some reason, which sometimes total in the millions or even tens of millions of dollars.

Distributions of AD/CV duties collected on imports from the 27 EU member states apparently increased from $4.44 million in FY 2011 to $84.4 million in FY 2012, thus prompting the rise in retaliatory tariffs. It is not clear what accounted for this increase or whether it may be repeated in the future, considering that the retaliation amount had previously declined for several years.

ST&R’s U.S. and EU offices are working to help affected companies formulate both short-term tactical and longer-term strategic options. For more information, contact ST&R managing partner Tom Travis at 305-894-1001 or or via email.
 

(Specialty Fabrics Review)

Mexico took the first step in an official dispute resolution process through the World Trade Organization (WTO), claiming that China illegally supports its textile and clothing industry under world trade law. The Mexican government claims that China’s textile and clothing policy breaks the WTO’s subsidies and countervailing measures agreement, the general agreement on tariffs and trade, the agriculture agreement and China’s own WTO accession commitments. The U.S. and European Union will join consultations between Mexico and China and are supporting Mexico’s case as third parties. The National Council of Textile Organizations describes the case as a landmark in textile trade.
 

(STR Trade Report)

The National Council of Textiles Organizations will remain the name of a larger industry group that as of April 1 will subsume the National Textile Association and the American Manufacturing Trade Action Coalition. The new organization will incorporate the 84 textile companies and their suppliers represented by NCTO, the 33 textile companies and their suppliers (along with 21 companies under the American Flock Association) represented by the NTA, and the 21 textile and other manufacturing companies represented by AMTAC. It will be chiefly governed by a set of internal councils that will be based on the production chain, namely a fiber council, yarn council, fabric and home products manufacturers council, and industry support council.

A joint press release characterized the move as an effort to ensure that the domestic textile industry has a more united and effective voice in trade negotiations as well as regulatory, government contracting and other issues that affect it. In particular, the press release states, the merger will provide “a more focused opportunity to properly brand the U.S. textile industry as an integral component of America’s 21st century economy by better highlighting its substantial economic contribution, particularly in the area of employment; its high-tech products; its cutting edge manufacturing processes; and its status as a globally competitive exporter.” It will also “more efficiently utiliz[e] the industry’s financial resources by eliminating duplicative efforts” and allow for “a more systematic effort to recruit new members.”

The press release seeks to counter the impression that the domestic textile industry has been losing political clout in recent years in tandem with a continuing slide in revenue and employment and is looking for ways to reclaim it as foreign competition increases. For example, it points out that in 2012 this industry employed 235,000 workers and stood as the world’s third-largest exporter of textile goods with $17 billion in shipments (up 36% from 2009) to more than 170 countries. In addition, U.S. textile mills have built 23 new plants and invested more than $3 billion in new plants and equipment over the last three years. The press release further states that the U.S. is the world leader in textile research and development, with private textile companies and universities developing new textile materials such as conductive fabric with antistatic properties, electronic textiles that monitor heart rate and vital signs, antimicrobial fibers, antiballistic armor for people and the machines that carry them, and new garments that adapt to the climate to make the wearer warmer or cooler.
 

(STR Trade Report)

The TPP Apparel Coalition commissioned a study to examine the share of U.S. value added in garments made abroad. The final report, entitled “Analyzing the Value Chain for Apparel Designed in the United States and Manufactured Overseas,” was released Feb. 13 and points out the significant contribution that millions of American workers make to apparel manufactured overseas. The author, Susan Hester, maintains that a substantial amount of U.S. jobs are included in the global value chains (GVCs) that design, develop, produce, import, distribute and sell apparel in the U.S. “American consumers and policymakers tend to look at the finished apparel product and put it into one of two categories: imported or made in the United States. But the reality is that GVCs have made the simplistic judgment … inaccurate,” said Hester.

The report finds that, on average, 70.3 percent of the final retail price of studied apparel is created by workers in the United States. Most of the lowest skilled jobs are done abroad, leaving the more highly skilled professional employment at home. These jobs are spread throughout the stages of U.S. value added, beginning with fashion designers and fabric and apparel patternmakers and continuing with transportation, storage and distribution managers, compliance officers, software developers and sales managers. Moreover, there are high-quality blue-collar jobs throughout the chain, such as cargo and freight agents, production, planning and expediting clerks, industrial machinery mechanics, railroad employees and longshore workers. Read more here.
 

(CBSA)

Tariff Classification of Textile Fabric Combined With Plates, Sheets or Strip of Cellular Plastic, and Garments Made up of Such Fabric

In Brief
This memorandum replaces CBSA Memorandum D10-14-59, issued February 9, 2011. It outlines the policy of the Canada Border Services Agency (CBSA) with respect to the tariff classification of textile fabrics that have been impregnated, coated, covered or laminated on one side with cellular plastic, and garments made up of such fabric.
 

(Tradecard.com)

A guide has been published by Sourcing Journal Online and TradeCard to help supply chain executives in the apparel industry take advantage of sourcing locales in the Latin America as they pursue strategic initiatives requiring faster turnaround and more reliable delivery of goods.

“We see strong growth in the Americas in the next three years as the global economy bounces back. Latin America is fast becoming a major sourcing destination for savvy brands and retailers based in the U.S. and Canada,” said Patrick Lamson-Hall, managing editor of Sourcing Journal Online.

From 2009 to 2011, total volume of apparel, footwear and household goods sourced to the United States from Latin America grew by 17 percent, while volume from China has stagnated and begun to fall in some categories.

“Brands and retailers are taking a holistic approach to sourcing and leveraging different regions to counter rising pressures from consumers, costs and trade regulations,” said Ted Barba, vice president of business development for TradeCard in the Americas. “The quality of goods in the Americas, and the infrastructure to deliver these goods, has drastically improved in recent years.

However, each country poses a series of opportunities and risks. It’s important to do your homework and have a clear understanding of how Latin America fits into your business strategy before making a major investment.”

Click here to download the white paper, Sourcing in Latin America: Strategies.
 

(CBSA)

1. This memorandum outlines and explains the provisions of the Blouses, Shirts and Co-ordinates Remission Order, 1998.
2. This memorandum now includes a hyperlink to the Department of Justice Canada Web site to view the Blouses, Shirts and Co-ordinates Remission Order, 1998.
3. This memorandum now contains a hyperlink to the Canada Border Services Agency’s (CBSA) regional offices. Therefore Appendix B has been removed.
4. The memorandum also includes new references to sources of the Canada Border Services Agency’s (CBSA) information.
 

(CBSA)

This new memorandum is being published to explain the circumstances whereby entitlement to remission of customs duties pursuant to the Textile and Apparel Remission Orders may be transferred or subject to a partnering agreement. Full details can be found at here
 

(Just Style – Keith Nuthall)

Talks between Mexico and China at the World Trade Organization (WTO) have failed to resolve a dispute over Mexico’s claims that China is illegally subsidising its textile and apparel producers, the Mexican government has told just-style.

A spokesperson for Mexico’s ministry of economy said the two days of WTO consultations did not result in a settlement, opening the way for Mexico to request a WTO dispute panel to rule on its claims.

“Unfortunately it was not possible to reach a satisfactory solution,” the spokesperson said. “However, Mexico reiterates its willingness to find a negotiated solution to the benefit of the textile and clothing industries in Mexico.” Read more here (subscription required).
 

(Petah Marian — Just-Style)

US customs and Border Protection (CBP) has revealed the results of its foreign factory visits conducted by its textile production verification teams during the 2011 fiscal year.

• Of the 174 factories CBP visited in nine countries in Latin America, the Middle East and Africa for illegal transshipment verifications, 21 were closed and 21 were deemed high-risk. One of the factories refused to admit CBP inspectors or produce requested documents, and evidence of transshipment was found at two factories.

• In Lesotho nine factories were found to be compliant with the African Growth and Opportunity Act, none of the factories visited were in violation, and two had insufficient documents to support AGOA claims.

• CBP found 59 factories in five countries to be in compliance with DR-CAFTA while ten were in violation, 17 had insufficient documents to support DR-CAFTA claims, and 13 were closed.

• Ten factories in Jordan were determined to be in compliance with the U.S.-Jordan FTA, none were in violation, three had insufficient documents to support FTA claims and two were closed.

• In Egypt, CBP found 14 factories that were in compliance with requirements under the Qualifying Industrial Zone program and none that were not, although seven had insufficient documentation to support QIZ claims and one was closed.

• CBP found nine factories in Peru to be compliant under the U.S.-Peru FTA but 11 had insufficient documents to support FTA claims and two were closed.
 

(The Economic Times)

The U.S. has accused India of wrongfully giving fresh export subsidies to its textile industry instead of phasing them out as mandated by the World Trade Organisation. It has also complained to the multilateral body about the country ignoring its requests for bilateral discussions on the issue. […]

“India has not flouted any norms in textiles and is yet to have clarity on its obligations to phase out subsidies,” a government official told ET. “However, it has no problems with bilateral discussions with any country and has made this clear at a recent meeting of the WTO committee on subsidies and countervailing measures in Geneva.” […]

The US is concerned about the additional sops that have been given to the textile sector recently as part of the government’s efforts to help exporters fight the global slowdown.

This includes incentives for exporting textiles under the focus product and focus market schemes where cash subsidies of 2%-3% of the export value is given for exports to particular destinations and for exporting identified products. Read more here.
 

(euronews)

Mexico is hoping to recruit allies in a trade dispute in which it accuses China of breaking international rules by giving tax breaks and subsidies to its textile businesses, a top Mexican trade official said on Wednesday.

Mexico argues that Beijing subsidizes Chinese companies in its textiles and clothing sector by exempting them from income taxes, value-added taxes and municipal taxes.

“It’s possible that at any time during the next 30 days, or 60 days, other countries could join us,” Francisco de Rosenzweig, Mexico’s undersecretary for foreign trade, told Reuters in an interview. Additional allies in the dispute would bring more pressure to bear on China. De Rosenzweig said Mexico was in consultations with various countries, but he declined to name them. Read more here.