Issue 481| August 10, 2018
Upcoming Training

September 13
Factory Fire Safety
Dhaka, Bangladesh

October 9-10
Internal Auditor Course
Shenzhen, China

October 11
Factory Fire Safety
Shenzhen, China


Welcome to The WRAP Weekly newsletter.  Feel free to look around and thank you for being a loyal reader.


The WRAP Up
This week, we certified 
33 factories in  12  countries:

 Bangladesh, Cambodia, China, Ethiopia, India, Indonesia, Jordan, Mexico, Pakistan, Thailand, 
United Arab Emirates, and Vietnam. 

On September 20, WRAP will be participating in the webinar "Working Hours Best Practices" in cooperation with the American Apparel and Footwear Association. For more details and to sign up for the webinar, click here
Upcoming Events

August 12-15, 2018  
Sourcing@MAGIC 
Las Vegas, Nevada

August 20-22, 2018
Toronto, Ontario

The WRAP Blog
By:
Seth Lennon

    

This Week's Headlines


Australia 
The Walk Free Foundation asserted that over U.S. $127.7 billion worth of garments imported annually by G20 countries, a group of nations which account for 80 percent of world trade, were at risk of having slavery within their supply chains. These imports help underwrite a global economy that trapped 40.3 million people in modern slavery in 2016, 71 percent of whom were women.  ( Fashionista

Bangladesh 
Concerns abound from Bangladesh's neighbors regarding its practice of purchasing cheap fabric from China and then using these resources to produce products in Bangladeshi factories for export at a lower price than domestically sourced products. This concern is especially rampant in India where trade associations are warning about the potential damage to their own apparel industries and are calling for the government to look at trade agreements more thoroughly.  

China
ChinaApparel imports from China into the United States are still on the rise, despite the ongoing trade war between the two nations. Imports rose by 16 percent between May and June of 2016, though there was a decline when compared to the same period in 2017. The U.S. Department of Commerce reported that imports from other countries in Asia rose, signaling that a preemptive shift in production could be occurring. (Just Style)
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Vize is an app designed to aid factory workers in China when looking for work in the apparel production sector. Vize provides collects and presents information on factories when it comes to working conditions, pay and other health and safety concerns. Workers can delve into specifics, such as what types of benefits are offered as well as feedback on the manager overseeing their position. Laborers are also encouraged to detail the pros and cons of the position so that their fellow job-seekers can make informed decisions. (Sourcing Journal)
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Ten of China's largest viscose producers, which collectively account for nearly 50 percent of the world's supply of the cellulosic fiber, have banded together to release a three-year plan to improve sustainability. The newly minted Collaboration for Sustainable Development of Viscose (CV), a "self-regulating" initiative created in partnership with two textile trade associations, offers viscose producers a platform to "achieve sustainable viscose and help their customers deliver on their sustainability commitments."  ( Sourcing Journal )
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Germany 
German apparel and textile manufacturers took a hit in June as a slide in overseas demand caused factory orders to decrease amid escalating trade tensions. Orders fell four percent from the previous month, along with a 0.8 percent drop when compared to June 2017. The German Economic Ministry acknowledged that "uncertainty from trade policy played a role" as depressed demand from non-euro-zone countries led the slide.  (Sourcing Journal)
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Hong Kong
Hong Kong-based apparel brand Esprit has made a commitment to enhance the working conditions for the 525,000 workers employed in its worldwide network of factories. Esprit signed an agreement with IndustriAll Global Union to strengthen its commitment to bettering internal standards on trade union rights, health and safety matters, and labor relations.  ( Just Style)
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While Hong Kong is no longer the apparel production hotbed it once was, it remains a hub of innovation. The territory, which for a long time was known as a bastion of low-cost manufacturing, is now becoming China's premier destination for advanced production techniques, including those that utilize recycled yarn.  ( Just Style)
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India
The growing U.S.-China trade confrontation provides India with the opportunity to renew efforts to increase its presence in the global apparel production sector. Rising wages in China, along with U.S. moves to raise import tariffs on Chinese goods, present New Delhi with an opportunity to draw more apparel production business into India. Bangladesh and Vietnam have already been drawing the attention of many clothing companies looking for alternatives to China, as have smaller countries including Sri Lanka and Cambodia.   ( Nikkei Asian Review )

India has become the latest nation to enter the global trade war, as it prepares to implement tariffs in response to the steel and aluminum levies placed upon India by the United States. However, with the United States almost certain to respond with tariffs on Indian sourced goods, concerns abound about the potential economic and political repercussions. ( CNBC)

A fire broke out at a knitwear production unit in Shivpuri on August 2nd which resulted in a massive loss in goods that were being produced at the facility. There were no casualties reported as the fire was limited to only one part of the factory, but concerns are mounting about the possible lack of an actionable fire plan for the factory.   (The Tribune)

Nicaragua
With Central and South America poised to reap the benefits of a trade war between the United States and China, the growing instability within Nicaragua and other nations in the region is troubling to those brands looking for alternatives to Asia to source their goods. El Salvador, Guatemala, and Nicaragua are all facing different levels of unrest due to revolutionary elements looking to ramp up their opposition to the sitting governments.   ( Just Style
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Pakistan
PakistanImran Khan, expected to be Pakistan's next prime minister, has a long list of problems to address once he takes office, including  aiding the country's textiles industry.  The apparel and textile production sphere in Pakistan has been threatened by chronic power shortages, uneven cotton crops and the public relations nightmare of being labeled a haven for terrorism. (Sourcing Journal)
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South Africa
SAOver 60,000 employees in South Africa's clothing manufacturing industry are prepared to strike after being unable to come to an agreement on a new wage package with the factories. This latest development comes on the heels of the recently settled wage dispute within South Africa's footwear manufacturing sector, causing a work stoppage which paralyzed the industry for weeks. ( Just Style)
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Trinidad and Tobago
At one time, Trinidad and Tobago was a vibrant destination for apparel manufacturing in the Americas. However, for various reasons, the industry for the most part departed and has yet to return. However, CreativeTT, an alliance of businesses and civic leaders, is looking to revitalize the industry through innovation and lobbying government leaders to remove the bureaucratic hurdles that stand in the way of the sector returning to the country ( Trinidad and Tobago Newsday)

United Kingdom
If the United Kingdom fails to agree to the terms of its divorce with the European Union, and leaves without even a transition agreement to smooth its exit, it would revert to trading under World Trade Organization rules in March 2019.  Most economists think this would cause serious harm to the world's fifth largest economy as trade with the EU, Britain's largest market, would become subject to tariffs. (Reuters)

Apparel manufacturing in Britain had been on the decline since the 1990's and many within the industry did not feel that there was much hope for the sector to mount any kind of comeback. However, with the growing worldwide demand for goods sourced from the United Kingdom, and the unknown impact of Brexit on the economy, both domestic and international clients are looking to further invest in Britain's revived clothing manufacturing industry.
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United States
A new plan proposed by the city government seeks to revive New York's dying garment industry. Property owners have already pledged to fill 300,000 square feet with apparel manufacturing facilities, and the city is seeking to add another 300,000 square feet for additional production. While that is a decline from the industry's heyday in the 1960s, this development does signal a renewed interest in revitalizing what was, until recently, a stagnant business sector.  ( Christian Science Monitor )

ShoesFive residents of Queens, NY, have been charged with conspiring to traffic in more than U.S. $70 million worth of counterfeit Nike Air Jordan sneakers. As alleged in the complaint, from January 2016 until June of 2018, the defendants imported at least 42 shipping containers holding an estimated 380,000 pairs of sneakers from China. These sneakers were manufactured to resemble Nike Air Jordans and were later housed in multiple storage units and warehouses in New York City and elsewhere. ( Sourcing Journal)
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Millennials, whose buying habits have been shaped by the economic struggles of the late 2000s recession, are now the largest purchaser of used clothing in the United States. Beyond the economic reasons, this generation is becoming more aware of the impact that concepts such as fast fashion have on the environment and are looking to minimize their environmental footprint.  (Christian Science Monitor)

Denim America's denim makers are facing a 25 percent tariff imposed by the European Union on U.S.-made fabric, part of the EU's response to President Donald Trump's protectionist trade policies. Smaller U.S.-based denim companies, many of which focus on higher-end apparel, may suffer more than their bigger rivals. Larger businesses, such as Levi Strauss, may mostly escape the impact of the tariff since most of their products are made overseas and wouldn't be subject to the EU's tariff, which went into effect in June. ( Chicago Tribune)

U.S. footwear brand Crocs has announced that it will be closing its final two manufacturing hubs in Italy and Mexico and will transition production of its famed rubber-based shoes to third-party factories to simplify its supply chain and enhance profits. (USA Today)
About WRAP
Headquartered in Arlington, Virginia, USA, with regional offices in Hong Kong, SAR, and Dhaka, Bangladesh, full-time staff in Europe, India and Southeast Asia (Thailand, Vietnam, and Indonesia), and for Latin America, WRAP is an independent, objective, non-profit team of global social compliance experts dedicated to promoting safe, lawful, humane, and ethical manufacturing around the world through certification and education. To learn more about WRAP, please visit  www.wrapcompliance.org .

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