FW
After intense negotiations, China has agreed to accommodate the demands of Pakistani exporters in the amended Free Trade Agreement (FTA) which is expected to be signed in March. The Pakistani delegation was led by secretary gommerce Mohammad Younus Dagha while the Chinese side was headed by Vice Minister for Commerce Wang Shouwen. The demands included provision for tariff concessions equivalent to Asean countries.
The Free Trade Agreement (FTA) between Pakistan and China would be signed by mid March to increase trade between the two countries. The Chinese side also agreed on Electronic Data Exchange which would help rescuing the chances of under invoicing, another major concern of Pakistani industry.
The major focus of STPF would boost exports in the technology and Services Sector, competitiveness and investment linkages, particularly attraction of Foreign Direct Investment (FDI) in the export related Industry and integration of local industry into global value chain.
US President Donald Trump is determined to impose tariff of up to 45 per cent on goods from China, slash US corporate tax rate to 15 per cent, as against the earlier 35 per cent, and reinvigorate the workforce by supporting the manufacturing sector and imposing stricter immigration rules. These trade policy shifts could have far-reaching implications in international business, especially the textile industry.
Alibaba executive chairman Jack Ma during his speech at the 2017 World Economic Forum Annual Meeting in Davos, had urged people to give Trump a chance. “Give President Donald Trump some time. He has an open mind.” A lower corporate tax rate would see the bells pealing joyfully as it would give many ailing companies a big bottom-line boost, but most fashion retailers largely sell goods made abroad and are subject to tariffs or trade agreements, however these agreements could now be renegotiated. It is felt that companies based in China will face the battering most.
Apparel Industry Suppliers’ Exhibition (AISEX) will be held in Sri Lanka, from May 10 to 12. It brings together suppliers and service organisations in the apparel industry in Sri Lanka. AISEX will provide manufacturers a platform to expand existing manufacturing methods and offer possibilities of increasing production volumes and efficiency through state-of-the-art innovative technology.
Set in this backdrop, the show will bring all suppliers big and small and service organisations in the sector under one roof and will focus on a wide range of textile machinery, accessories and services from many parts of the world.
AISEX will also focus on generating new opportunities closer to home for small scale local designers and manufactures. The event will feature a sourcing market/pavilion where small to medium-scale manufacturers, suppliers and designers can meet and source each other’s skills and products. The event is expected to spur the future development of the industry as a major sourcing and knowledge hub for the apparel sector by 2020. Reinvigorated by the provision of GSP Plus, the apparel industry in Sri Lanka is on the brink of taking every foreseeable step in a bid to take full advantage of the benefits allowed under the scheme.
AISEX is held biannually since 1998.
Competition in the Italian denim market is growing stronger. Italian brands are upping their game with tailoring and customization, inspiring newcomers to follow their lead. Some Italian brands try to capture the lust for an original pair of jeans by combining no nonsense aesthetics and high quality associated with Made in Italy.
Blue Blanket, Founded in 2010, has developed into a niche brand for connoisseurs. It caters to fans of a true, gritty look. The five-pocket is made with Japanese fabric. It’s sewn and stitched in Italy and a carryover item that’s never out of stock. It doesn’t follow fashion trends and uses the best ingredients like real leather and cotton.
For decades, Italy has had a strong voice position in global jeans market. Brands such as Diesel and Energy have had remarkable success, shaping trends at a global level. However, the denim market has become more contested, forcing Italian companies to adapt and find new creative ways to stay relevant in an increasingly cutthroat environment.
Not being able to compete on costs, most Italian brands have chosen to move upmarket. They position themselves in the premium or even in the luxury segment. Some of them present themselves as total look lifestyle brands. And others, like Blue Blanket, play the real deal card of authenticity and work wear aesthetics. The formula seems to be working.
The Indian denim sector has been growing at an average of 12 to 15 per cent a year over the last 10 years. India is the second largest producer of denim fabrics after China. Of India’s total denim production, nearly two-thirds is consumed by domestic markets. The installed capacity is around 1500 to 1600 million meters a year against a consumption market size of only 800 million meters for the domestic garment making segment, and another 200 to 250 million meters for exports. There seems to be a clear surplus of nearly 500 to 600 million meters at present, with the fear of an additional 100 million meters by the end of 2018.
Also, cheap imports of denim garments from Bangladesh and Sri Lanka have been a game spoiler for the domestic denim wear-making units. This has been the single most visible reason for the drop in capacity utilisation in the denim industry, by one third of capacity. In most standard denim mills of three indigo lines, one line presently stands closed. In effect, such a standard denim mill produces around 50,000 meters a day against the installed 75,000 meters a day. With a slowdown in demand from global garment making hubs, it is unlikely that India will be able to increase its share in denim exports.
The Hong Kong Trade Development Council (HKTDC) highlighted four rising Hong Kong-based designer labels. They presented their brands and launched their Autumn/Winter 2018 collections at London Fashion Week’s Designer showrooms at The Store Studios.
The HKTDC organised the Fashion Hong Kong Fashion Presentation and Cocktail Reception at London’s Somerset House, which attracted more than 600 buyers, media representatives and fashion experts, fostering the exchange between the UK and Hong Kong fashion industry players. Several celebrities and fashionistas were among the attendees, including Mathew Anderson, CEO of British designer label Jenny Packham.
The Hong Kong fashion design line-up in London were: Yi Chan and Lary Cheung, Vickie Au, Dora Chu and Glori Tsui. The 4 participating brands have their own unique character and the diverse mix has illustrated the wide variety of Hong Kong fashion.
Fashion Hong Kong has actively participated in international fashion weeks to showcase Hong Kong’s diversified designs. Fashion Hong Kong even hosted the Fashion Presentation and Cocktail Reception at Somerset House in London. Fashion Hong Kong is a series of international promotional events organised by the Hong Kong Trade Development Council (HKTDC) to globally promote Hong Kong fashion designers and labels.
The Generalised System of Preferences Plus (GSP+) scheme has been approved by the European Parliament’s Committee on International Trade (CIT) thus ensuring Pakistani exporters to enjoy preferential duties on exports for the next two years. The continuation of the scheme is a gift for the country’s enactment of new laws and developing new institutions for implantation of 27 core conventions of GSP+ — mainly the National Action Plan for human rights.
EU’s ambassador Jean-François Cautain confirmed this. “The steps being taken are part of the on going GSP+ monitoring process during which the European Commission can decide to launch an investigation if there are significant shortcomings in respect of the implementation of international conventions relevant under the scheme.”
A part of renewing process involves a presentation to be made to the European Council on Feb 21, which is a mere formality. The council is a technocratic committee of the EU. Pakistan’s first Biennial Assessment Report of GSP+ was conducted in 2016. The second Biennial Assess¬ment Report of GSP+ was done in Brussels on Tuesday. Commerce Secretary Younus Dagha led Pakistan’s delegation.
A statement issued by the commerce ministry said that the EU Parliament expressed satisfaction on the progress achieved by Pakistan in enacting new laws and hoped that Islamabad would continue to engage with the EU and ensure to bridge implementation gaps during the next two years of reporting on GSP+. The CIT also agreed to consider the possibility of up-scaling the relationship with Pakistan from a beneficiary of GSP+ scheme to a FTA partner in the future.
A similar offer of an FTA has been made to India.
British former journalist and business researcher Peter Humphrey says prisoners in China are forced to make clothes for well-known clothing brands such as C&A and H&M. Peter Humphrey spent two years in a prison in Shanghai after he was convicted for illegally collecting private data of Chinese citizens while investigating a smear campaign against pharmaceutical company GlaxoSmithKline. While serving his sentence, he saw prisoners working for big brands. Inmates made packaging and textile products for companies, including, C&A, H&M and 3M. He says, prisoners who worked full time were paid only about €15 per month. They also earned points with which they could reduce their prison term.
The British business researcher added it is quite possible that the companies in question don't know that prisoners are forced to work for them. C&A launched an investigation to find out the truth and said the company is taking these allegations "very seriously" and the company knows nothing about Chinese prisoners working in its clothing production chain. "We do not tolerate forced labour in our production chain. That also applies to labour in prisons. If we discover forced labour somewhere, the contract with the supplier is terminated immediately."
C&A says it checks the factories of its 273 Chinese suppliers at least annually and has employees dedicated to combat the use of illegal subcontractors. H&M and 3M have not yet responded to these allegations.
China has eight major categories such as garment, cotton fabrics, chemical fabrics, wool fabrics, silk fabrics, knitted fabrics, textile machinery and bestfibre. And production capacity of all categories is exceptional by world standards. Data from China Textile Industry Development Report (2014/2015) reveal textile fibre production in China was over 50 million tonnes, accounting for 54.36 per cent of world’s share. As much as 64.2 per cent of the world’s chemical fibres, 64.1 per cent of synthetic fibres and 26.2 per cent of cotton were produced in China.
On the other side, apparel production in China touched 29.9 billion units in 2014, which is 10.4 per cent higher when compared to 2013. Chinese production figures give a clear indication the country will remain the top apparel-sourcing country for international buyers.
Data from International Trace Corporation (ITC) World Trade Organization (WTO) show the total value of China’s apparel and accessories exports was $147.79 billion in 2016 which was $162.35 billion in 2015 and $173.44 billion in 2014 and $165.04 billion in 2013. The data clearly indicated Chinese apparel exports recorded a steep growth rate till 2014 and post ’14 recorded a steep decline. In 2014, Chinese international apparel export was the highest within two years it has lost 14.79 per cent of its exports.
Bangladesh RMG makers are facing tough times as they ask for a fair price. Further, they are in continuous pressure from international buyers to improve working conditions on shop-floor post the Rana Plaza building collapse in 2013. Domestic apparel makers say more than $1 billion has been invested to renovate and retrofit their factories as per the demand of Western buyers, retailers and brands.
Despite this fact, retailers and brands have not increased their price. Purchasers are still paying the traditionally low prices for products and garnering enormous profits. A shirt costing $3 or $5 is being sold for around $25 to $30. Ditto for high-end value added products, which is 30 per cent of the total volume of garment items, exported per annum from Bangladesh. MNCs pay around $8 to $12 to local manufacturers for a piece of value added high-end shirt and retailers sell the same shirts for around $100 to $150, garment makers said.
Manufacturers and economists assess that the faulty global supply chain is the culprit. Economist Rehman Sobhan, highlighting this factor says the current business model forces suppliers to squeeze their workers as much as they can because they have to produce the shirt at $5. There needs to be investigation into this matter to resolve issues faced by manufacturers.
