FW
Japan and the European Union have signed a free trade agreement. This will create the world’s largest open economic area. The deal removes EU’s 10 per cent tariff on Japanese cars and three per cent on most car parts. It would also scrap Japanese duties of some 30 per cent or more on EU cheese and 15 per cent on wines, and secure access to large public tenders in Japan.
Europe’s food sector is one of the biggest winners from the deal, which should allow it to capitalize on Japanese demand for high-quality cheese, chocolates, meats and pasta. Japanese car and car parts makers are also expected to increase sales to Europe, where they have lagged behind European rivals.
However, Japan’s dairy industry is expected to lose market share to European products once tariffs of up to 40 per cent on some cheese imports start coming down. Japan and the EU account for about a third of global GDP and their trade relationship has room to grow. The agreement is expected to boost the EU economy by 0.8 per cent and Japan’s by 0.3 per cent over the long term.
The trade pact comes amid fears that a trade war between the United States and China will diminish the role of free trade in the global economic order.
India International Garment Fair (IIGF) is on at Noida from July 16 to 18. The fair is primarily covering the autumn/winter and spring/summer of the European Union, US and other western markets. It has grown in scale and scope and emerged as one of the largest and most popular platforms in Asia where overseas garment buyers can source and forge business relationships with India’s finest in the apparel and fashion accessories domain.
IIGF expects footfalls from over 1,054 international buyers, stores and retail chains. Around 345 exporters from Delhi, Gujarat, Haryana, Maharashtra, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh etc are participating showcasing women’s wear, accessories, kids’ wear and men’s wear. Buyers are from Brazil, Spain, Japan, UK, Hong Kong, USA, Sri Lanka, Australia etc.
This is a B-2-B fair that started in 1988 is being organized in association with International Garment Fair Association and four major garment exporters' associations, that is, Apparel Exporters and Manufacturers Association, Garment Exporters Association, Clothing Manufacturers Association of India and Garment Exporters of Rajasthan. With GST stabilising and the industry hopeful of policy support for improving the sector’s cost competitiveness, a turnaround in export trajectory is expected.
India has increased import duties on textile and apparel items. The aim is to protect domestic manufacturers from rising imports. The import duty which was earlier 10 per cent will be 20 per cent for these items. There has been an increase in the import duty on 24 knitted apparel categories, 24 woven apparel, ten categories of carpet, six nonwovens, three categories of laminated fabric, two knitted fabric, two categories of woven fabric, two categories of made-ups and three other categories.
The measures are a major relief for garment and carpet manufacturers who were under immense pressure post GST. From 2016-17 to 2017-18, India’s imports of textile and apparel products have grown at 16 per cent. The commodities on which import duty has been increased account for 26 per cent of total imports by India.
The apparel commodities on which import duty has been increased account for 82 per cent of total apparel imports. This is expected to prevent apparel imports from China, which is the largest supplier of apparel to India. However, the big issue of imports from Bangladesh remains. These imports are exempt from basic customs duty and hence, are a gateway for Chinese fabrics entering India duty free. This is because no rules of origin are in place for duty-free imports from Bangladesh.
China and the European Union (EU) have signed a MoU on circular economy. This implies reducing waste to a minimum and re-using, repairing, and recycling existing materials and products.
The agreement could see the world’s two largest economies align key circular economy mechanisms and pave the way for the development of product standards and policies, which could create the conditions for a system shift on a global scale towards a low carbon, regenerative economy.
Co-operation by the two economic powerhouses in this field will cover strategies, legislation, policies and research in areas of mutual interest. It will address management systems and policy tools such as eco-design, eco-labeling, extended producer responsibility and green supply chains as well as financing of the circular economy. Both sides will exchange best practice in key fields such as industrial parks, chemicals, plastics and waste.
A transition to a circular economy in China’s cities could have numerous local benefits, including making goods and services more affordable for citizens, as well as reducing the impacts normally associated with middle class lifestyles, such as traffic congestion and air pollution. Europe can add to its GDP by 2030 by moving to a circular economy, while also halving its Co2 emissions.
China has lodged an additional complaint to the World Trade Organisation (WTO) regarding the United States' proposed tariffs on $200 billion (S$272 billion) worth of Chinese imports. These tariff hikes targeting Chinese goods were based on Section 301 of the Trade Act of 1974, its domestic trade law. The US unilaterally launched a Section 301 investigation against China last year despite opposition from China and the international community.
It released an investigation report in March, and imposed tariffs on US$34 billion worth of Chinese goods on July 6 in disregard of 91 per cent opposition in the comments it received.
Meanwhile, the Trump administration also retaliated against the unjustified tariffs imposed by China in response to US steel and aluminum duties. The US Trade Representative launched formal challenges at the WTO against China, the European Union, Canada, Mexico and Turkey for retaliating against steel and aluminum tariffs.
Japan has become the second country to complete domestic procedures for the Trans-Pacific Partnership-11 agreement, officially known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The move comes amid significant global headwinds over trade. Tokyo recently stepped up its efforts to prevent the United States from moving ahead with tariffs on automotive imports.
Japan announced it had completed the domestic procedures for the TPP-11 on the day it formally notified New Zealand, which is designated as the depositary for such declarations. The agreement specifies that the TPP-11 will enter into force 60 days after at least six signatories have given written notice of the completion of any relevant domestic legal procedures.
"On positive fallout of the ongoing turmoil between China and the US, is that Beijing has lowered duties on many Indian imports and removed them for 28 drugs, including anti-cancer drugs. As a favour, India has removed tariffs on over 3,000 goods from China and other Asian countries. Trade experts and Chinese officials say this progress, reflected in its Belt and Road Initiative (BRI) and its interest in upgrading India’s poor infrastructure would result in massive opportunities for India. The China-initiated Asian Infrastructure Investment Bank has in the past two years given India nearly 30 per cent of its funds, most of which were allocated for infrastructure development in electricity and transportation."
With US tariff war, are there chances of Asia’s superpowers such as India & China uniting to fight the demon? It’s a tricky question indeed going by trade stats, the US buys more from China than India: 22 per cent of its imports come from China, 2.1 per cent from India. About 19 per cent of China’s exports go to the US and 16 per cent of India’s. On the whole, India could be affected less by the trade war than China.
On positive fallout of the ongoing turmoil between China and the US, is that Beijing has lowered duties on many Indian imports and removed them for 28 drugs, including anti-cancer drugs. As a favour, India has removed tariffs on over 3,000 goods from China and other Asian countries. Trade experts and Chinese officials say this progress, reflected in its Belt and Road Initiative (BRI) and its interest in upgrading India’s poor infrastructure would result in massive opportunities for India. The China-initiated Asian Infrastructure Investment Bank has in the past two years given India nearly 30 per cent of its funds, most of which were allocated for infrastructure development in electricity and transportation.
India’s positioning
With China imposing tariff barriers on US products, Indian exports to China is expected to boom. Stats have
another story to tell, India’s imports ($61 billion) from China were six times its exports ($10 billion) in 2016-17, and its trade deficit with China increased more than two-fold from $16 billion in 2007-08 to $51 billion in 2016. Moreover, restrictions on market access in China and the lack of manufacturing capability in some technology items indicate that India may not be able to export much more technology to China and benefit much from a US-China trade war. Cotton has been one of India’s leading exports to China, which is the largest market for India’s cotton yarn. But Vietnamese cotton is posing a great threat in India’s journey by reducing exports to almost half from $2.2 billion in 2013 to $1.1 billion in 2016. This amounted to a decline of 67 per cent since 2011-12.
Roadblocks
Besides this, India has not yet shown keenness to support or join China’s Belt and Road Initiative (BRI). And it is concerned about China’s ambitious global infrastructure plans, which have borne fruit in projects in the Indian Ocean. The BRI projects include the building of ports and roads from Myanmar to Sri Lanka and Pakistan. For India, the $60 billion China-Pakistan Economic Corridor, which runs through the disputed Pakistani-occupied Kashmir, is the biggest roadblock in being associated to the project.
Amid all these political and economic tensions, it seems unlikely that India will gain major impetus in its exports from the US-China trade war. While it might be true that Trump’s trade war can prompt India and China to search for a common ground, but a big question mark surrounds over the chances of real improvement in their bilateral trade and political ties.
Research institute Worn Again Technologies has successfully reached its investment target of £5 million to facilitate acceleration of its breakthrough polymer recycling technology. The patented process can separate, decontaminate and extract polyester polymers and cellulose from hitherto non-reusable textiles; enabling these fibres to be used in the manufacture of new garments an indefinite number of times.
The institute’s innovation would facilitate the separation of both polyester and cotton, thus producing two end products that Worn Again believe to be of comparable quality and price to the equivalent virgin resources. The latest financial boosts received by Worn Again have given the organisation belief that the apparel sector is beginning to think with the future in mind.
Last month, Worn Again was awarded a grant to become the first chemical recycling technology to be Cradle to Cradle (C2C) certified. Others investments includes H&M, Sulzer Chemtech, Himes Corporation, Directex and Future Tech Lab. Worn Again has also partnered with Qvartz, a Nordic management consultancy firm to help formulate partnership development and commercialisation model.
Uzbekistan and Germany will expand bilateral cooperation. Both countries came to an agreement on investments, three framework agreements and six export contracts. Both sides also discussed issues of increasing exports of finished textile products to the European market. The countries want to use the full potential of economic cooperation. Germany’s economic ties with Uzbekistan are modest.
During the negotiations, issues of developing a program of technical assistance and the transfer of knowledge in the field of textile production, design, dyeing, finishing were discussed. Germany remains one of the main trade and economic partners of Uzbekistan in Europe. Germany stands seventh in overall commodity turnover of Uzbekistan with other countries in 2016.
The main indicators of mutual trade turnover fell for Germany (almost 90 per cent). The main reasons for the low turnover growth rates are conversion, bureaucratic obstacles and legal security.
As many as 123 enterprises operate in Uzbekistan with the participation of German companies, capital and advanced technologies. Large investment projects involving German banks are being implemented in various sectors of the economy. Investment projects for a total of more than a billion euro have been implemented in Uzbekistan jointly with German leading companies.
Vietnam’s cotton yarn exports are the fastest growing in the world, thanks to orders from the largest importer in the market, China. This dynamic is having a positive impact on US cotton exports to Southeast Asian countries.
The United States accounts for more than half of Vietnam's cotton imports, compared with a third just three years ago. These larger needs in Vietnam are likely to lead to record consumption in 2018-2019. Vietnamese mills continue to attract foreign investment, new or existing. Costs are much lower in Vietnam than in Japan or South Korea, and the country is attracting more and more foreign textile exporters, such as China, India and Pakistan. Vietnam's exports of cotton yarn to China have almost quintupled since 2012-2013, showing stronger links between the textile industries of both countries.
In 2016-17, Vietnam was the main destination for US cotton exports. For the moment, this continues to be true. Cotton is the most valuable agricultural product for the United States, accounting for about 40 per cent of the sector’s total exports.
Over the period from August 2017 to June 2018, US cotton exports to Vietnam again reached record levels. The world’s second largest importer of cotton, Vietnam helped propel US cotton exports in 2017-2018 to their highest level in a decade.
