FW
Textile mills in the Coimbatore region want made-ups and home textiles to be included under the special package announced recently for garments. A Rs 6000 crores special package has been approved for the garment sector, which is aimed at creating one crores of new jobs, attracting Rs 74,000 crores in new investments and achieving a cumulative increase of $30 billion in foreign exchange in the next three years.
Mill owners say made-ups and home textiles constitute very high end products and exports to all major markets, especially the European Union and the US. Indian exports of made-ups and home furnishings have been facing a severe challenge from Pakistan, which enjoys duty free access to the EU and a few other markets. So this segment could not achieve the potential growth rate as the products attract equal tariff on a par with garments in most major international textile markets.
Also made-ups and home textile manufacturers pay much higher conversion charges for the fabric when compared to garment manufacturers. And since processes required for made-ups and home textile fabric manufacturing are capital intensive, only limited manufacturing facilities are available.
Home textiles and made-up units are specialised in manufacturing fabrics and fabric related products like pillow covers, gloves, bed spreads etc.
The new textile policy announced by the Government recently talks of a fixed term employment, fixed for a finite period, like two years at the outside. Such a fixed term employment covers all categories of workers, temporary, contract or any other kind. This legislation for the labour-intensive textile industry has features which other sectors will want to adopt and marks the first change in labour legislation.
However, trade unions have often been criticised that despite being a minuscule number in the enormous labour pool, the unorganised sector being several times larger, yet they want to keep the latter from reaping any benefits or extending some statutory protection. All employers are not necessarily exploitative, they are after all in business to make money; legislation ensures some protection for the labour not covered by trade unions with their negotiated wage hikes every three years.
Meanwhile, the concept of a fixed term employment which the textile policy mentions, takes into account the seasonality of business. Labour is thus protected with a guaranteed job for an upfront fixed term and so is the employer since wages are paid at rates comparable to permanent employees but only for the duration of the fixed term.
The Indian manmade fiber industry wants a duty levied on Chinese imports. The industry says Chinese exporters are undervaluing their manmade fiber merchandise and dumping cheap synthetic fibers in the Indian market. They say Chinese exporters are resorting to undervaluation of fabrics as they get duty benefits from the Chinese government. It says India should seek an explanation from China on the subsidies and hopes that a customs duty will be imposed on the landed price after factoring the subsidies given back home. Imports of fibers, yarns and value added products, the industry says, must be discouraged and the import of synthetic fabric should be restricted to actual users.
The total installed capacity of synthetic fiber in India is five million tons while China has a surplus of nine million tons. It’s felt that due to the slowdown in China, the country has been dumping the surplus into India on the back of subsidies offered by the government.
Indian imports of synthetic textile from China in 2015-16 stood at $800 million dollars, mainly due to the surplus capacity with China. More than 50 million tons of manmade fibers are produced every year. China is the leading pacesetter in the manmade fiber industry.
The First Denim Show in Vietnam by Denimsandjeans.com concluded with a encouraging response on June 17 at Gem Center, Ho Chi Minh City. With 1,025 visitors in two days to the invite only show, the market showed great interest in the event. Vietnam is the fastest growing apparel exporting country in the world with about $27 billion of exports of garments and textiles in 2015 and expected to grow to $30 billion in 2016.
The show was inaugurated on June 16th and 37 exhibitors from different regions participated including five companies from Vietnam. Top buyers, retailers, brands and factories from Vietnam and from other parts of the world including USA, Japan, Korea, Hong Kong, Germany, Italy, Spain, Indonesia, India, Thailand, Taiwan, Bangladesh, Cambodia and New Zealand etc visited this show from the very first day of this show.
Besides the trade show, there were four key seminars organised by Denimsandjeans.com. On the first day of the show, Jeanologia from Spain held a seminar titled – ‘Vietnam Horizon 2020’ by Borja Trenor Casanova and the focus of the presentation was to analyse the past and current situation of Vietnam as a denim manufacturing and exporting country and how technology is transforming the denim industry and is bringing Vietnam up as a key player in the supply chain. The seminar also focused on technology and sustainable solutions in the context of the Vietnamese Apparel Industry.
The European Union (EU) is looking to have closer ties with China. The new strategy on China will hasten the pace of cooperation especially in areas of trade and market status under the World Trade Organization (WTO) rules, analysts say. The strategy was brought to light in a joint communiqué issued last Wednesday by the European Commission and the European Parliament.
The document said that Europe sees China as a partner, which is rapidly increasing its international influence and should be more closely engaged for the next five years. China’s Foreign Ministry spokeswoman Hua Chunying has said they are willing to develop ties with the European Union from long-term perspective after gaining this information and China is urging EU members to grant market economy status to China in December.
The European Commission's last communication on China was adopted a decade ago in 2006. Since then both the EU and China have undergone considerable changes since then and China has a stronger presence in all regions of the world, economically and politically. Trade between China and the EU amounted to 521 billion euros in 2015 and China's share of total EU trade in goods has doubled since 2002, rising from 7 to 15 per cent, data from EU show.
The textile industry has a background of polluting water and causing deforestation when producing and using fabrics and leather. But over the last years, many companies have been changing their attitude to become more environment-friendly. Recently, Greenpeace launched Detox Catwalk. Textile companies were asked to adopt and implement solutions to avoid using and releasing dangerous chemicals from their global supply chain and products by January 1, 2020.
Chiara Campione, Fashion Duel Project Leader at Greenpeace Italy explained that H&M, Nike, Adidas, Valentino, Levi's and Burberry are among the 36 major fashion and retailer brands that have already joined the campaign. One of the historical districts of the textile made in Italy, renowned worldwide, is the region of Biella, North-West Italy. The secret to the success of this industrial area has been the chemical properties of its waters and the presence of big falls ensuring enough energy for production cycles.
At the Reda firm, founded in 1865, the finest merino wools are converted by the expert hands of local craftsmen into fabrics, some of which are worn by Hollywood stars. But this excellence is achieved while caring for the environment, for example by using water filtration systems and integrating renewable sources in the industrial process.
The fourth edition of Denim Boulevard was held in Italy from June 18 to 20. The exhibitors were a mix of denim fabric manufacturers and casual brands such as: for instance, Candiani Denim, Tela Genova, Blue Blanket, Attrezzeria-Laboratorio Base, Jacob Cohën, Manifattura Ceccarelli, Surf Hut, Blessed and Nanni from Italy.
Also hosted within the show was the Lost & Found area that presented American vintage pieces from the 1940s, 50s and 60s. Among exhibitors from Japan there were Samurai Jeans, Studio D'Artisan, Orgueil, Redmoon and Forty Niners. Other European exhibitors were Endrime, A S R, R.D.D. and Archive by Jack & Jones for Europe.
There were many dyeing workshops and a wide offer of handcrafted products. Kassim Denim organised some indigo dye workshops during the show inviting visitors and exhibitors to dye T-shirts and other pieces. Among young talents debuting in the market was Nicole Ajimal, who creates and personalises her unique hand woven indigo fabrics. Another newcomer was Angela Syrett Roper whose collection offers unique hand-treatments and ageing applied onto denim and casual pieces. Also interesting were some unique fabrics manufactured by Annegret Affolderbach Choolips Studio. Among the international exhibitors were Levi's, Tellason, Sperry and Santa Cruz.
According to Kaing Monika, Deputy Secretary General of the Garment Manufacturers Association in Cambodia (GMAC), the country will not feel the direct impact of Brexit for the time being, despite the United Kingdom being one of the main destinations for the country’s garment exports.
The European Union accounts for about 45 per cent of Cambodia's total garment exports, with the UK as one of the main destinations. Brexit is a very complicated matter and it is too early for them to exactly predict the consequences, feels Monika. Many don’t really know what is going to happen next. The fallout of the momentous Brexit vote is fueling fears of a break-up of the United Kingdom, with repercussions already felt in global markets.
The EU is one of Cambodia’s largest trading partners after the United States and more than 40 per cent of the country's exports head to Europe. Cambodia’s EU exports are given preferential treatment under the Everything but Arms (EBA) initiative for least developed countries.
Australia’s Cotton Research and Development Corporation and United State’s Cotton Incorporated are both members of the Sustainable Apparel Coalition (SAC) that held its annual conference in Copenhagen, this May. Representatives from both countries are working to ensure that sustainability messages for Australian and US cotton are understood by SAC members, many of whom are Cotton Leads partners.
Brooke Summers (Cotton Australia) and Allan Williams (CRDC) also spoke at the Planet Textiles conference about Australia’s sustainability credentials including the industry’s R&D portfolio. The SAC offers members a number of tools to assess the sustainability and social merits of various components in the textile supply chain including the raw materials that go into products (including cotton) and the factories that manufacture garments.
The HIGG index is gaining traction as a tool that essentially gives a score to factories, raw materials and brands across a number of modules. This tool is being used to assess which materials end up in products, with the data based on life cycle assessments provided by member organisations including Cotton Incorporated.
Cotton Incorporated, funded by US growers of upland cotton and importers of cotton and cotton textile products, is the research and marketing company representing upland cotton. The program is designed and operated to improve the demand for and profitability of cotton.
"The 12 Caribbean countries will have no structured trade relationship with Britain, once it finally leaves the EU. When Britain joined what was then the European Economic Community in 1973, it transferred all authority for its trade agreements to the community. Ever since then the formal trade, aid, and investment relations between the 12 Caribbean countries, has been with the EU. These relations were formalised successively in the Lome Convention, the Cotonou Agreement and the Economic Partnership Agreement (EPA)."
Other options have to be explored by the Caribbean countries for dealing with the twin problem of no formal trade relationship with Britain, and an existing EPA with the EU that is now skewered and ripe with problems.
The 12 Caribbean countries will have no structured trade relationship with Britain, once it finally leaves the EU. When Britain joined what was then the European Economic Community in 1973, it transferred all authority for its trade agreements to the community. Ever since then the formal trade, aid, and investment relations between the 12 Caribbean countries, has been with the EU. These relations were formalised successively in the Lome Convention, the Cotonou Agreement and the Economic Partnership Agreement (EPA).
Up to the time of British entry to the EU, trade between Britain and the 12 Caribbean countries was conducted under a Commonwealth preferences scheme. That scheme fell away once Britain joined the EU and negotiated the extension of some of those preferences to the English-speaking Caribbean by the European body.
End of trade agreements
Once Britain officially exits the EU, Caribbean countries will have no trade agreement with it. Indeed, Britain will have no formal trade agreements with any country, having subsumed its authority for trade matters to the EU. Its first task will be to negotiate trade terms with the remaining 27 EU members, hitherto its biggest trading partner. Those negotiations will not be easy. Britain will then have to try to formalise trade agreements with other countries. The United States will be uppermost in its priorities, but President Obama had warned during the debate on Brexit, that the UK market of 64 million people would not be high on the US agenda. The EU, with a population of 450 million (without Britain) was a far greater target.
Under any circumstance, a trade agreement with the 12 small, English-speaking Caribbean countries (total market of approximately seven million) will also not be high on Britain’s list.
However, even though these Caribbean countries have been notionally trading with the EU, the majority of their exports have been going to the British market. Now that the EU will no longer be representing Britain, the EPA will not cover trade with Britain. That is an issue, however much on the back burner it will be for Britain that will be important to the Caribbean - at least for trade in services, particularly tourism. British tourists comprise a significant number of the annual visitors to the region.
More worryingly, once Britain leaves the EU, there will be several troubling consequences for the 12 Caribbean countries. Not only will the British market disappear from the EU, but so too will the British contribution to official aid and investment. It is most unlikely that the 27 EU countries, which had no historical relationship with, or colonial responsibility for, the English-speaking Caribbean, will want to maintain the level of official aid and investment that now exists.
Importantly, it should be recognised that the EU-EPA is the only such formal comprehensive arrangement that Caribbean countries have with any other country or region of the world. It is vital to maintain as much of it as possible.
There had been some speculation in Britain during the Brexit debate that Britain could resuscitate trade among the 52 other Commonwealth countries. But that idea, rooted in empire, is not only impractical, but also would not reap for Britain the trade rewards it derives from the EU. Britain’s earnings from exports to the Commonwealth are not huge, representing only 9.76 per cent of its total exports in 2014, while its merchandise exports to the EU represented a hefty 45 per cent of its total exports.
Trade declined
However, total Commonwealth trade in goods has declined over the years. And, even its share of world trade is owed to the trading capacity of only six of the Commonwealth states - Singapore, India, Malaysia, Australia, Britain and Canada.
In 2014, the six countries accounted for 84 per cent of all Commonwealth exports; 47 countries combined, including South Africa and Nigeria, made up only 16 per cent. Not surprisingly, the 36 Commonwealth small states, including the 12 in the Caribbean, enjoy only a tiny share of Commonwealth exports.
As for the notion that Commonwealth countries could fashion a Commonwealth free trade agreement (FTA) under which they could give preferences to each other to expand intra-Commonwealth trade, while this is technically possible to make it compliant with World Trade Organization (WTO) rules, it is enormously difficult from a legal, administrative and even political standpoint. Certainly, Cyprus and Malta would have to leave the EU customs union.
The benefits of improved preferential access to all Commonwealth states within an FTA would be exploited by the major economies such as India, Malaysia and then by the developed Commonwealth countries Britain, Australia, and Canada. The Commonwealth’s 36 small states would not get much of a look-in.
The Caribbean countries will have to be explored other options for dealing with the twin problem of no formal trade relationship with Britain, and an existing EPA with the EU that is now skewered and ripe with problems.
