FW
"Malaysian textile sector, which contributes only 1.4 per cent of total exports last year, will register the largest gains in exports within the first decade of the implementation of the Trans Pacific Partnership agreement, according to a cost-benefit analysis. This is assuming that all tariffs are eliminated and non-tariff measures (NTMs) are reduced by 25 per cent to 50 per cent across the prospective 12 member countries, according to the PricewaterhouseCoopers’ (PwC) study on potential economic impact of TPPA on the Malaysian economy and selected key economic sectors."
Malaysian exports to gain with TPP
Malaysian textile sector, which contributes only 1.4 per cent of total exports last year, will register the largest gains in exports within the first decade of the implementation of the Trans Pacific Partnership agreement, according to a cost-benefit analysis. This is assuming that all tariffs are eliminated and non-tariff measures (NTMs) are reduced by 25 per cent to 50 per cent across the prospective 12 member countries, according to the PricewaterhouseCoopers’ (PwC) study on potential economic impact of TPPA on the Malaysian economy and selected key economic sectors. As for the GDP, PwC says more than 90 percent of the cumulative gains would be attributable to the reduction in NTMs because an elimination of tariffs without any reduction in NTMs, would reap a cumulative gain of only $12 billion over 2018-2027.
In contrast, Malaysia’s non-participation in the TPP agreement is projected to incur a cumulative GDP loss of $9 billion to $16 billion over 2018-2027. In terms of the investments projection over the 2018-2027 period, the textile sector will register the largest increase in investment growth in 2027, followed by construction and distributive trade sectors. Malaysia’s non-participation in the TPPA agreement could result in a diversion of foreign investment away from Malaysia and a projected decline of $7 billion to $13 billion over 2018-2027.
Meanwhile, import growth is projected to increase by 0.65 percent to 1.17 percent in 2027, driven mainly by higher imports of intermediate and capital goods. According to the study, the increase in import growth is projected to outpace the increase in export growth, as the reductions in import tariffs and NTMs are larger for Malaysia relative to the other TPPA countries. On textiles, PwC explained that the yarn-forward rule of origin under the TPP is expected to increase the export competitiveness of Malaysia’s textile industry. The yarn-forward rule applies to textiles which originate from TPP member countries only.
Reduction in tariff lines to spur exports to the US
Higher demand for yarn produced in TPP countries is also expected to spur textile companies to expand their upstream yarn operations in Malaysia, which are higher value-added than downstream garment production, the firm said.
The reduction in tariff lines for textile products is expected to benefit Malaysia’s downstream garment producers, as 59 per cent of the country’s garment exports were to TPP countries last year. Exports to the US are expected to benefit the most, given that 34 per cent of the sale of made-up garments was to the US in 2014. A 10 per cent reduction in tariffs across all textile products exported to the US could result in savings of RM190 million per annum, assuming the yarn-forward rule is fulfilled. PwC said that the removal of non-tariff barriers, particularly in Mexico and Peru, was also expected to increase Malaysia’s textile exports. Presently, these countries impose special sector registry requirements for the import of textiles, which increase the cost of customs clearance.
Removal of these import requirements under the TPP is expected to encourage higher trade between Malaysia and the TPP countries in Latin America. Malaysia exported RM83 million worth of textiles to Mexico and Peru last year. In the event Malaysia does not participate in the TPPA, the trade balance is projected to remain largely unchanged from the baseline scenario.
www.pwc.com
The third international trade expo on 'Building and Fire Safety' has commenced in Bangladesh with an aim to provide a platform for garment makers and leading international safety equipment vendors and experts.
The three-day expo is being held at Bangabandhu International Conference Center and is jointly organised by Elevate Partners, Alliance, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Electronics Safety and Security Association of Bangladesh (ESSAB).
The expo will share information with the local apparel makers about the globally-recognised materials needed for the remediation and help them select the right ones for sustainable reform. Alliance has inspected a total of 837 garment factories, and has directed them to carry out some form of remediation, especially to tackle fire and electrical issues.
The expo will be the platform for vendors and factory owners, especially for the SMEs, to discuss the latest advancement of safety, especially fire detection and fighting equipments, organisers said. A total of 36 organisations, including 13 global vendors and four service providers are showcasing their products ranging fire door, hydrant and pump, sprinkler, fire alarm, detection and protection machinery and services.
www.bangladeshworkersafety.org
In protest against the Pakistan governments’ apathy towards the textile industry the All Pakistan Textile Mills Association (APTMA), Punjab chapter has decided to shut down of mills once a week. However, the final verdict will be out next week as chairman APTMA Punjab Amir Fayez said some members were not present at the general body meeting.
Concerned with 40 percent depletion of cotton crop, Fayez feels it’s high time for the government to dismiss the head of cotton research institutions, instead it give authority to APTMA, which happens to be paying Rs 700 million in the shape of cotton cess. Fayez assailed the government for its negligence in taking appropriate measures to reduce deteriorating exports since July 2015. Surprisingly, the government has focussed on borrowed money from international sources. Whereas, textile exports have fallen down by $500 million per month which still remains unacknowledged. And as Fayez says electricity cost in Punjab and other provinces is relatively high which has led to closing down of about 70 mills. As a consequence, millers are left with no choice other than to sell mill to property developers or covert them into godowns.
After conclusion of the US-led Trans-Pacific Partnership agreement and finalisation of trade deal between the European Union (EU) and Vietnam, Bangladeshi apparel exporters fear adverse impact on its exports to the US and EU. The local industry bodies in Bangladesh now aim to prepare themselves to face the crisis that may be result from the pact.
The FTA deal may remove nearly all tariffs between Europe and Vietnam, which will lead to many products from Bangladesh like apparel, leather goods, frozen fish and so on face stiff competition from Vietnamese players. Vietnam's main exports to the EU market include electronic products, footwear, textiles and clothing, coffee, rice, seafood and furniture, which will get a boost after trade deals with the US and EU.
In 2014, the EU-Vietnam trade in goods was worth over €28.3 billion, with €22.1 billion in imports from Vietnam into the EU and €6.2 billion in exports from the EU to Vietnam. The EU is one of the largest foreign investors in Vietnam. In 2015, EU investors invested a total of $1.3 billion in foreign direct investment and thus became Vietnam's third-largest foreign investor-partner. On the other hand, Bangladesh's export to the EU amounted to $16.4 billion in 2013-14.
International sanctions have so far blocked the flow of textile machinery exports to Iran. Iran’s textile industry boasts of an ancient tradition, with a high number of manufacturers operating in a variety of different sectors along the production chain from spinning to finishing. Sanctions in recent years have delayed modernisation process necessary for the industry to remain competitive globally. Market shares for China and Turkey increased, to the detriment of countries such as Italy.
Iran has historically been Italy’s primary trading partner for textile machinery. Italian textile machinery producers boast consolidated business relations with Iran’s textile manufacturers. In 2004, Iran was the fourth largest market for Italian exports in this segment. In 2014, imports flow of machinery to Iran resumed, albeit not with the same intensity as earlier. Meanwhile ACIMIT (Association of Italian Textile Machinery Manufacturers) has planned a road show for 2016 in Iran, with the aim of promoting Italian textile technology in Iran’s major textile producing areas.
The agreement reached on July 14 concerning Iran’s nuclear talks with the United States, Russia, China, Great Britain, France and Germany opens the door to the resumption of investments in textile technology by Iran.
Invista and Lanza Tech have developed a metabolic toolkit that has been successfully applied to generate novel metabolic pathways to bio-derived butadiene and key precursors. This breakthrough highlights the value a metabolic toolkit can bring in developing new pathways for bio-based and bio-derived chemical production.
The development underscores the progress made on butadiene production via gas fermentation technology as a result of Invista’s collaboration with LanzaTech. A metabolic toolkit integrates detailed knowledge about a bacterium’s genetic configuration with the tools to precisely customise that configuration in order to make a particular product, together with a model to accurately predict the performance of the bacterium. This work is in an early stage of development with an aim to commercialise within the next several years.
Butadiene, a key intermediate chemical used in the production of synthetic rubber and various plastics, is used by Invista in its proprietary, butadiene-based adiponitrile production technologies. ADN is a critical intermediate chemical used in the manufacture of nylon 6,6.
Invista and LanzaTech first announced their gas fermentation collaboration efforts in 2012. LanzaTech’s work with Invista represents a significant step in integrating the chemicals supply chain into a circular economy model. By utilising waste carbon resources, the production of butadiene is decoupled from today’s commodity feed stocks.
www.lanzatech.com/
Senior representatives from over 30 Asia-Pacific countries ended a three day United Nations economic committee, calling for a rethink of economic growth strategies and policies in support of the 2030 Agenda for Sustainable Development.
The third session of the Committee on Macroeconomic Policy, Poverty Reduction and Inclusive Development, convened biannually by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), was opened by Yuba Raj Khatiwada, Vice-Chairman of National Planning Commission of Nepal, Azeema Adam, Central Bank Governor of Maldives and Shamyrat Mustafayev, Deputy Minister of Economy and Development of Turkmenistan.
The Committee reflected on the economic growth strategies of the Asia-Pacific region, with a focus on enhancing productivity in the context of implementing and supporting the 2030 Agenda for Sustainable Development. It also generated broad consensus among member states on the importance of strengthening regional financial cooperation and supporting least developed and landlocked developing countries (LDCs and LLDCs) and small island states (SIDS). In particular, the Committee expressed its intentions to further explore the possibility of establishing an Asia-Pacific forum for cooperation in tax matters to support sustainable development.
The Committee stressed that adequate, stable and long-term finance should be mobilised and realigned to achieve the objectives of the 2030 Agenda. Policy priorities recommended by the Committee include strengthening domestic revenues, particularly through improvements in tax policy and administration, and the development of domestic capital markets and institutional investors. The Committee concluded that as today’s financial systems are increasingly interlinked across countries, enhanced cooperation in these areas will be indispensable.
During the Committee, ESCAP organised two high-level side events on LDCs and the 2030 Agenda, and Strategic Regional Partnerships for Sustainable Development, where senior representatives from Bangladesh, Switzerland, Maldives, Indonesia, Bhutan, Samoa, Sri Lanka, and experts from the Asian Development Bank, Food and Agriculture Organization and civil society organizations shared their valuable perspectives. An exhibition was also held by ESCAP alongside the Committee at the United Nations Conference Centre, showcasing the national implementation strategies and progress towards poverty reduction by Bhutan, Fiji, Maldives, the Philippines and Samoa.
http://www.unescap.org
Hi-Tech International Trade Fair is organising APPTECH Expo in Tirupur, India’s knitwear sourcing hub. The expo will be held from February 12 to 14, 2016. With APPTECH fair, the organisers aim to bridge the knowledge gap since their other Knit-Tech fair is held every two years.
Tirupur’s apparel manufacturing industry is aiming to achieve a target of reaching $15 billion worth of export business value by 2020. APPTECH Expo 2016, will bring together circular flat knitting machinery manufacturers, dyeing and finishing machinery companies, CAD/CAM, printing and sewing machine suppliers, spare parts and trims suppliers, air compressors, generators, solar and wind mill suppliers, industrial banks and consultants.
“One way to harness the new technologies and increase our competitiveness is to exploit our strong human resources, knowledge, skills and creativity. To do this, our apparel and textile industry needs strong and relevant skills to compete successfully in world markets. In some areas, we already have increased our competitiveness – Indian knitters are using computerised knitting machines, and companies are reducing the lead times while increasing the fashion and design content,” organisers said in a statement.
Southern India Mills' Association (SIMA) has decided to partner with other textile associations to understand domestic demand for yarn and fabric regularly and to initiate measures to revive the market.
According to M. Senthilkumar, Chairman of the association, SIMA already had a meeting with members of Powerloom Development and Export Promotion (PDEXCIL) on Friday. The domestic yarn market is down for the last 18 months. As against the potential to produce 350 million to 352 million kg of yarn a month, the spinning sector was producing only about 345 million kg a month. Similarly, in weaving clusters such as Bhiwandi, the powerloom units were operating only 60 per cent to 70 per cent of the capacity.
Initially, the association would tie-up with PDEXCIL to study the yarn and fabric market in Tamil Nadu. This would be extended to handloom and knitting segments soon. In Tamil Nadu, most of the units were sending the yarn and fabric to the northern states for processing.
www.simamills.org
The second phase of China-Pakistan Free Trade Agreement (CPFTA) negotiation round was recently held in Beijing between Pakistan and China, which failed to reach its conclusion.
Sources claim that during the talks between both these countries, Pakistan expressed its concerns regarding insufficient utilisation of concessions given by China to Pakistan and competition faced by local industries due to cheap imports from China. Pakistan demanded exclusion of 20 per cent of total products from the concessions because of dumping of goods from China into Pakistan's local markets. However, China showed willingness to exclude only 10 per cent of total products in the second phase under the WTO rules.
The CPFTA on trade in goods was signed on November 24, 2006 and implemented from July 1, 2007. FTA on Trade in Services was signed on February 21, 2009 and is operational since October 10, 2009. Rising imports of Chinese goods into the Pakistani domestic market is adversely impacting the local manufacturers and they have been appealing to the Ministry of Commerce with complaints of under-invoicing and non-declaration with regard to imports from China.
Pakistan-China volume of trade that was in the region of $4 billion in the year 2006-07, reached an all-time high at $10.19 billion in 2013-14. Pakistan's exports have soared to $2.4 billion in 2013-14 from $575 million in 2006-07. Correspondingly China's exports to Pakistan have increased to $7.77 billion in 2013-14 from $3.5 billion in 2006-07. Pakistan's major exports to China are cotton yarn, fabric, rice, raw hides and skins, crude vegetable material, chemical material, etc. While major imports from China are machinery (all sorts) and its parts, yarn and thread of synthetic fiber, vegetable and synthetic textile fibre, among others.
Pakistan has secured market access on products of immediate export interest like cotton fabrics, blended fabrics, synthetic yarn and fabrics, knit fabrics and home textiles. During first three years of implementation of Phase-I, both sides reduced tariffs on almost 36 per cent tariff lines to zero duty.
