Issue 484| August 31, 2018
Upcoming Training

September 13
Factory Fire Safety
Dhaka, Bangladesh

September 17-19
Internal Auditor Course
El Salvador

September 24-28
Lead Auditor Course
New Delhi, India


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 
70 factories in  18  countries:

 Cambodia, China, Columbia, El Salvador, Guatemala, India, Indonesia, Lesotho, Madagascar, Mexico, Myanmar, Pakistan, South Africa, South Korea, Sri Lanka, Thailand, United States 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

WRAP is proud to announce the launch of its new facilities map on its homepage and we encourage you to click here to try out our new functionality. 
Upcoming Events

October 18
Ho Chi Minh City, Vietnam
The WRAP Blog
By:
Nana Marfo


This Week's Headlines


 
Bangladesh
86 percent of women surveyed in a recent report have said that male supervisors were the main perpetrators of violence or harassment in factories, according to the study which was conducted on gender-based violence within Bangladesh's garment industry. The survey was commissioned by Shojag, a coalition of several Bangladeshi based human rights organizations, and in collaboration with the Global Fund for Women. The partnership aims to reduce gender-based violence by raising awareness of worker rights, especially the legal entitlements of female workers. (Dhaka Tribune)

BangIn another sign that Bangladesh could be ready to usurp China's position as the dominant sourcing powerhouse for accessories, the sector reported exports of accessories have risen by 10 to 15 percent to nearly U.S. $1 billion in the last fiscal year. Industry leaders in Bangladesh believe that they can make further inroads into the global export markets due to China having to close down several accessory factories because of environmental issues.  (The Independent)

Canada
China
ShoesOverall production of footwear increased in 2017, according to the latest edition of the World Footwear Yearbook. Global footwear markets demonstrated a two percent increase in production to 23.5 billion pairs. Production is still down from the industry's peak between 2010 and 2014 when production was increasing at a steady 10 percent a year. 
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With both of their nations currently embroiled in trade disputes with others, China and the United Kingdom have been engaging in bilateral negotiations on a potential free trade agreement aimed at opening up each other's markets. The trade ministries of both nations have not explicitly stated where they stand on such a pact, but that discussions were ongoing. (Reuters)

For decades, Chinese apparel producers viewed exporting goods to the United States as their primary source of business. Now, with the trade-war between the two nations raging on, these companies are looking towards increasing sales in mainland China as a means to head-off any potential losses. One of the fascinating side-effects of this shift has been producers looking to enhance the quality of their goods in order to meet the standards of a Chinese consumer base that has become more selective in recent years. ( China News )

Ethiopia
Chinese owned apparel and textile factories continue to flourish in Ethiopia, as investors are lured by the low startup and operational costs. Ethiopians themselves view employment in the industry as a means of getting out of poverty, but with recent reports of worker abuse, coupled with the fact that Ethiopia does not possess a minimum wage, many are concerned about the ethical challenges posed by the production and sourcing practices utilized within the country. (CNN)
 
Germany 
Apparel and footwear companies are increasingly looking to social media outlets such as Facebook, Instagram, and Snapchat as the primary mechanisms for releasing new products. In another example of this phenomenon, Snapchat partnered with  Adidas to launch a new limited-edition version of the Falcon W sneaker. This comes on the heels of Nike doing a similar product release through Snapchat earlier this month. ( Sourcing Journal)
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India
Jamaica
The first 47 students from the Housing, Opportunity, Production and Employment's (HOPE) Design and Apparel Manufacturing Corps graduated with Garment Assembler Level 1 certificates from the HEART Trust/NTA Garmex Academy. HOPE was launched by Prime Minister Andrew Holness in May 2017 and is designed to teach young adults aged 18-24 the skills needed to work in apparel and textile factories located within Jamaica. (Jamaica Observer)

TM Mexico
The Trump Administration announced that it had concluded a new, 16-year trade deal with Mexico. This announcement set in motion a rapid chain of events that could redraw or even end the North American Free Trade Agreement. White House officials said the agreement would help American workers by making it harder for countries like China to ship cheap products through Mexico and then into the United States, along with harmonizing environmental rules in order to discourage outsourcing to Mexico. ( The Washington Post)

Nigeria
The Nigerian apparel and textile industry, the second largest in Sub-Saharan Africa in terms of volume produced, is the latest battleground in the fight over the secondhand apparel trade in Africa. With Nigeria's economy currently in decline, many consumers are looking to secondhand apparel out of cost considerations. In addition, concerns are rising that the quality of apparel manufactured within Nigeria is coming up short compared to imported secondhand clothing, further harming the domestic market. ( The Guardian)

Pakistan 
The Pakistani Readymade Garments Manufacturers and Exporters Association (PRGMEA) is asking Prime Minister Imran Khan to declare an 'export emergency' in order to control the volatility in Pakistan's apparel export sector. The PRGMEA is asking the new government to look into what it calls "value-adding" measures in order to stabilize the nation's unstable export market and would view such a measure as another step in Mr. Khan's pledge to strengthen Pakistan's apparel and textile industry.  ( The Nation )

A thread manufacturing factory was gutted as a third-degree fire broke out in Karachi on the first day of Eid. The blaze at the factory near Saba Cinema, located in New Karachi's Industrial Area was brought under control in four hours. The response to the blaze consumed most of the city's firefighting resources and a cause is still under investigation.

Philippines 
The Philippines' Department of Trade and Industry (DTI) is seeking to conclude a preferential trade agreement with Turkey with the objective being the resuscitation of the dormant Filipino textile industry. Government leaders cited the potential for sourcing raw materials, such as Turkish cotton, as a means to supplement resources from other nations such as China, Indonesia, South Korea, and Vietnam. (Business World)

Rwanda
Duty-free benefits for Rwandan exports were included as part of the African Growth and Opportunity Act (AGOA), a trade preference agreement between several African nations and the United States. After Rwanda increased the import tariffs for used textiles, the American Secondary Materials and Recycled Textiles Association filed a petition lobbying for an AGOA eligibility review, arguing the ban "imposed significant hardship" on the U.S. used¬≠ clothing industry. Now, the fight continues to escalate as the United States considers removing favored trade status from the African nation. (Deutsche Welle)

Vietnam
A year ago, many Vietnamese garment firms were facing significant hardships due to a large number of orders being shifted to countries such as Bangladesh and Cambodia, who possessed lower sourcing costs. Now, it appears that the sector has bounced back after investing in production technology, reducing costs and the government electing to end harmful trade policies. Recently finalized bilateral and multilateral free trade agreements (FTAs) are cited as a catalyst for Vietnam's rebound. (Fibre2Fashion)

United States
With the China/U.S. trade war continuing to escalate, many brands are pondering how to protect themselves from the financial harm that could result from the dispute. An obvious solution to some has been to investigate sourcing more goods in the United States, but many in the industry consider the high cost of labor to be an insurmountable obstacle. Reducing energy costs through the use of renewable energy sources and environmentally conscious production methods is seen as a possible path forward. (Forbes)

The Port of Los Angeles, the largest port in the United States, could potentially see a quarter of its cargo affected by upcoming tariffs on goods imported from China, Still, the looming crisis does not detract from the current growth seen by the port due to the fact that several brands are rushing goods over to the United States in an effort to beat the implementation of higher duties on Chinese goods. (Supply Chain Dive)

The United States Constitution gives Congress the authority to regulate foreign trade. But with Section 232 of the Trade Expansion Act of 1962, Congress ceded to Presidents the power to impose tariffs in cases where the Commerce Department decides that imports harm U.S. national security. Now, many in the United States are wondering whether Congress needs to re-assert its authority on trade in response to the burgeoning trade dispute with China. 

There are plenty of factors involved in determining the retail price of that global apparel staple - the plain white t-shirt. Every detail, ranging from branding, the type of fabric, and finally down to the exact manufacturing processes themselves can have an effect on how much consumers will pay. Consumers often do not consider much beyond the individual price point when making a purchase, but the question exists: "What else should be on our mind when buying that t-shirt?" ( The Huffington Post )

In an op-ed in  Just Style , Rick Helfenbein, President and CEO of the American Apparel and Footwear Association (AAFA) voices his concerns regarding the Trump Administration pursuing tariffs against Chinese goods, especially apparel and textiles. Helfenbein believes that the primary casualty in this trade war will be the American consumer as the heightened duties will negatively impact their purchasing power. He also contends that any long trade dispute could slow or even halt the American economy's current upward momentum. ( Just Style )
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Los Angeles garment contractor SMT Apparel Inc. will pay a combined $51,840 to 40 employees after a U.S. Department of Labor (DOL) investigation found that the company failed to pay  minimum wages and overtime premiums in violation of the Fair Labor Standards Act. Investigators with DOL's Wage and Hour Division (WHD) discovered that SMT Apparel paid employees at a piece rate without regard for the number of hours they worked. DOL also stated that this practice resulted in minimum wage violations for 11 employees when their piece rates failed to cover all of their hours at the federal minimum wage of $7.25 per hour. ( Sourcing Journal )
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Department store chain Bon-Ton, formally a retailer powerhouse in the Northeast United States, closed down its last remaining stores this week, marking the final chapter in its four-month liquidation process. The collapse of Bon-Ton is yet another example of the current business environment, where traditional brick and mortar retail chains are falling victim to consumers shifting their business towards e-commerce and discount retailers. ( Milwaukee Journal-Sentinel)
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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