Sri Lanka is aiming for a special bilateral preferential trade agreement with the United Kingdom. The UK has already assured Sri Lanka that GSP Plus concessions will continue in the Brexit transitional period, which is expected to last for approximately 21 months following Brexit.

Sri Lanka can potentially explore a free trade arrangement with the UK without any strings attached and gain the same or more benefits of the GSP Plus scheme as opposed to the EU’s Plus scheme where Sri Lanka has to fulfil several conditions. Such an agreement can also enable Sri Lankan export commodities to be more competitive in the UK, as the EU has granted the Most-Favored Nation status to countries such as China and Maldives, which are competing with Sri Lanka in the EU market.

However, Sri Lanka’s utilisation of the GSP Plus scheme remains weak compared to other countries. Sri Lanka has utilised 55 per cent tariff lines in the GSP Plus scheme while Pakistan and Philippines have utilised 96 per cent and 73 per cent of the tariff lines. So Sri Lanka needs to diversify its export basket in order to gain the full benefits of the scheme. The UK plans to focus more on Commonwealth countries including Sri Lanka, an area which has somewhat been neglected for several decades.

Indonesian Footwear Industry Development Center (BPIP) will collaborate with the Petra Christian University for the Indonesia Footwear Creative Competition (IFCC) 2019. The cooperation will allow Petra students to participate in training after completing selection. At least 40 students are allowed to participate in the workshops.

The event is initiated by BPI under the Directorate General of Small, Medium and Various Industries at the Industry Ministry. The center is located in Sidoarjo, East Java province and trains the business players to develop the national footwear industry. It also introduces footwear to the younger generation.

In 2018, IFCC showcased 689 works for design, photography and video-graphy categories. About 70 percent of the participants were school and university students, and the rest were general public.

The US has accused India of charging over 100 per cent tariffs on a large number of products while the US imposes nothing on the similar or same items. As a result of such trades, the US has lost for many years now – $800 billion a year on trade. Early this year, President Trump had supported the Indian decision to reduce the import tariff on high-end Harley-Davidson motorcycles from 100 per cent to 50 per cent. The Trump administration is fixing broken trade deals to protect the American workers.

Egypt has more than 1,500 apparel factories with an average production capacity of 500 million pieces a day. Egypt’s textiles and clothing sector is the most integrated on the African continent. The apparel sector is the country’s most important industrial sector, it represents 6.5 per cent of total non-petroleum. Apparel exports in 2018 rose 10 per cent compared to 2017. Around 50 per cent of the country’s apparel production goes to the US and 30 per cent to Europe.

The US is the main export destination for the Egyptian apparel industry. Apparel created within the Egyptian Qualified Industrial Zone (QIZ) is duty free in the US. Goods made in Egyptian QIZs can use fabrics imported from third countries and remain eligible for duty-free entry into the US market, provided 35 per cent of their value is added in Egypt, including a minimum of 10.5 per cent of Israeli content. Costs incurred in the US also count towards the 35 per cent threshold. Egypt also enjoys duty-free market access to the EU with a double transformation rule of origin. With its fabric base and sourcing proximity to Turkey (Turkish fabrics classify as local under regional cumulation of rules of origin), exports to the EU are likely to increase.

Guess is having a sale of its vintage pieces in the US. The collection will span jeans, denim jackets, leather jackets, T-shirts and sweatshirts for both men and women. Shoppers will be able to have dead-stock vintage T-shirts from the ’80s and ’90s Guess archives customized in store, using archival graphics to create bespoke vintage pieces. These are Guess archival pieces that have stood the test of time. The initiative ties into Guess’ wider sustainable fashion strategy -- the brand has signed up to the 2020 Circular Fashion System Commitment, the Global Fashion Agenda's pledge to encourage a circular fashion economy. Guess has developed a new capsule collection for men and women, with sustainable materials and manufacturing processes. The denim in the collection is produced with advanced technology that uses on an average about 30 per cent less water per garment and reduces chemical use throughout the production.

There has been an explosion of vintage culture over the past decade. Guess is not the only fashion brand rifling through its archives at the moment -- fashion brand Tommy Hilfiger recently launched a reboot of its vintage Coca-Cola collaboration, which was first created back in 1986. Perry Ellis launched the second installment of its Perry Ellis America capsule archival collection earlier this year.

Cotton Council International (CCI) partnered Chinese designer, Liu Wei, who specialises in using new technical fabrics, to launch the 2019/20 Cotton USA Uniform Collection during Beijing Fashion Week. Under the theme “With You,” Liu Wei has combined US cotton and green technology fabrics to interpret China’s professional uniform trends. The fashion show at China Fashion Week included 100 sets of professional uniforms featuring functional performance covering six professions: airlines, logistics, retail, formal business wear, civil servant and technicist. Some 800 participants watched the show.

After the fashion show, more than 200 representatives from 50 companies actively exchanged information and ideas on the challenges and opportunities in the Chinese uniform industry. Participants included: Beijing Yunyi Times Clothing Co; Haitian Materials Technology Co; Shandong Daiyin Group Renault Apparel etc. Following the launch of the uniform collections, a weeklong display and business meeting space was set up at Liuwei Studio to provide a cooperation platform and business discussion space for the uniform supply chain.

As an extension of the uniform project, Cotton USA will also strategically cooperate with Shanghai Occupational Uniform Expo in April to make a bigger impact throughout the uniform supply chain.

Europe is the key market for Tirupur. The EU and the US, together, constitute 70 per cent of the market for knitwear exporters. Tirupur boasts of a Rs 46,000 crore annual apparel business and houses the entire ecosystem that supports the industry. In the five years between 2012 and 2017, annual exports increased from Rs 10,500 crores to Rs 26,000 crores. The knitwear industry in Tirupur is largely in the micro, small and medium enterprises segment. However, its profile is witnessing gradual changes. Of the 1500-odd direct exporters, the number of exporting units with more than a Rs 100 crore turnover is more than what it was a few years ago and there are at least 20 units with more than a Rs 500 crore turnover.

Yet, all has not been well for the last three years. Export growth is not up to the expected level, investments have been need-based, and there is a struggle to be price-competitive. The incentives that the industry received before implementation of GST through different schemes worked out to nearly 13.2 per cent. This was reduced to 5.7 per cent after GST.

The inherent strengths of Tirupur, and its focus on efficiency and technology, have helped it sustain exports for the last two years.

As per Export Promotion Bureau data, export earnings in the first nine months (July to March) of the financial year were around $31 billion. The figure exceeded the projection of $28.83 billion by 7.2 percent and the exports of the same period last fiscal year by 12.57 percent. Total exports in the fiscal will beat estimate if growth continues, however, challenges for exporters remain.

Many of them are “facing existential crisis” due to higher interest rate on loans from the World Bank and a drop in commodity prices in the global market. Growth in exports has been helped by earnings from the apparel sector as usual. Bangladesh exported garments worth around $26 billion in the first three quarters of the fiscal year, marking a 13.65 percent growth.

Leather and jute exports, however, missed targets. Bangladesh exported leather goods worth over $771 million in July-March period against $848 million earnings in the same time last fiscal year. Exports of jute and jute products dropped to $628 million from last year’s $818 million a fall of 23 percent.

Sustainability and transparency, the two watchwords of the millennials, are now been actively taken up by the Gen Z. New and friendly brands of this generation are creating sustainable, authentic and transparent products and services that address the concerns and aspirations of Gen Z and build trust for the future.

The 2018 “Report on Young People and Social Change’ by DoSomething Strategic, a social impact consultancy names Patagonia as a top purpose-driven brand. The brand, not only encouraged customers to repair their old apparels instead of discarding them but also created a marketplace for reselling pre-worn clothes. The company also created a digital platform to connect its consumers to causes. This has doubled its revenue in the last eight years.

Elisabeth Best, Manager-Sustainability Management, the global nonprofit Business for Social Responsibility’s (BSR), notes millennials and GenZ consumers are creating demand for sustainable products. A survey by Cone Communications, reveals around 94 per cent of the Gen Z shoppers believe companies should address urgent social and environmental issue as against 87 percent of Millennials.

Seeking value for money

A Cotton Incorporated Lifestyle Monitor™ Survey highlighted, around 36 per cent of consumers are likely to pay full price for a clothing item made in a sustainable or environmentally friendly manner. This figure increases to 39 per cent of millennials and 40 per cent of GenZ shoppers.

Gen Z, those born between 1996 and 2010, make up a quarter of the US population. Their purchasing power, as per a study by the IBM Institute for Business Value, is around $44 billion. They’re expected to account for 40 percent of all consumers by 2020.

Honesty, authenticity from brands score high

Born as digital natives, GenZ consumers were raised during the era of non-stop social media, where memes are presented as facts and intentionally fabricated news stories have run rampant. UK-based Sustainly, a sustainability consultancy, says the young people of this generation demand honesty and authenticity from brands because they’ve “come of age in this crisis of trust.

Monitor™ Research studies show, despite their young age, GenZ consumers prefer clothes made of natural fibers such as cotton, wool, etc. (38 percent). Another 38 per cent prefer sustainable clothing. The Monitor™ survey reveals that around 75 per cent of Gen Z consumers site cotton as their favorite fabric as it is sustainable and trustworthy.

Interest in social issues

The Gen Z consumers are also interested in social and environmental issues. As the Monitor™ research shows water quality tops the list for 91 percent of Gen Z consumers. This is followed by concerns with global warming and climate change (91 percent), loss of rural farmland (91 percent), extinction of animals and/or plants (91 percent), and the depletion of natural resources such as oil or minerals (82 percent).

A survey by Greenmatch, a renewable energy consulting agency has shown, 72 per cent of Gen Z respondents were willing to spend more money on goods and services produced in a sustainable fashion. Almost half (49 per cent) stopped purchasing or boycotted a brand because they stood for something or behaved in a way that is against their values.

Young people align with brands that reflect their values. As the DoSomething Strategic survey noted more than half of the 13-to-25 year olds surveyed are influenced by a brand’s reputation and values. And nearly 30 percent actively seek out socially or environmentally responsible brands.

The survey advises brands to balance profits and purpose. This can only happen if they remain as committed to doing good as they are to increasing their sales.

"An analysis of the macro-trends and proprietary data of 100 top apparel exporters in India reveals, export value and shipments from major markets like the UAE have consistently fallen during the year. A report by US-based Drip Capital, a major provider of trade finance for SMEs in the sector, notes demand from key importers has declined over the last few months."

An analysis of the macro-trends and proprietary data of 100 top apparel exporters in India reveals, export value and shipments from major markets like the UAE have consistently fallen during the year. A report by US-based Drip Capital, a major provider of trade finance for SMEs in the sector, notes demand from key importers has declined over the last few months. This decline, starting last year with new manufacturing zones coming up in free market zones, surpasses the increase in exports to India’s largest markets, the US and the EU.

Decline worries apparel exporters

This decline has flagged concerns among Indian apparel exporters, the major foreign exchange earner for the country. As an ICRA report published earlier this month pointed out, negative growth of 4-5 per cent registered in 2018-19 may also continue in the next financial year. Adding to the woes, Drip capital report also emphasises on the complaints made by the United States to the World Trade Organization (WTO) against India's export incentive schemes, which Washington holds responsible for unfair market practices. This further shrouds the future of apparel exporters with uncertainty, translating into stagnation for the overall sector.

India loses market share

With Bangladesh and Vietnam establishing themselves as two of the most developing nations, China continues to lose its share with a majority of its jobs percolating down the value chain. Rising imports from these nations have also eaten away at the competitiveness of smaller domestic players and the government raised import duties on more than 330 textile items in 2018.

Drip Capital’s report also emphasises on the need for immediate policy changes and interventions to give the sector a boost. It recommends expansion of both the Credit Link Capital Subsidy Scheme for Technology Upgradation, as well as the Technology Upgradation Fund Scheme to incentivise apparel exporters to push exporters to adopt higher technology.

The Federation of Indian Export Organisations (FIEO) has also reiterated this demand for urgent and immediate action on falling exports including augmenting the flow of credit and better fiscal support. It has identified four new markets that show high potential for future growth: United Kingdom, Chile, Israel, and Japan. Identifying products with high growth potential besides exploiting technological innovations will enable exports to further enhance their efficiency margins.