Issue 477 | July 13, 2018
Upcoming Training

July 25-26 
Internal Auditor Course
Shanghai, China

September 13
Factory Fire Safety
Dhaka, Bangladesh

October 9-10
Internal Auditor Course
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 58 factories in 14 countries:

 Bangladesh, Cambodia, China, Guatemala, India, Jordan, Kenya, Madagascar, Mexico, Pakistan, 
Sri Lanka, Thailand, the United States and Vietnam.
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 
International online retailers who sell in Australia will be required to collect a Goods and Service Tax (GST) on all products sold valued at 1,000 Australian dollars (U.S. $740) or less. The Australian Taxation Office (ATO) views the imposition of this tax as a means to ensure a level playing field for all apparel purchased in the country, no matter if the goods are locally sourced or imported from abroad.  ( Fibre2Fashion )

Bangladesh
The Department of Inspection for Factories and Establishments (DIFE) formally proposed the structure for the planned industrial safety unit intended to act as a permanent watchdog when it comes to factory safety. The DIFE has sent the proposal to the nation's Labour Ministry for review and comment. One of the notable measures is the institution of a separate inspector general for the newly instituted export industry zones designed to boost output within the apparel industry. ( The New Age)

Representatives from multiple brands gathered in Dhaka to discuss environmental sustainability within the Bangladesh's apparel manufacturing industry. Some of the topics discussed included how to improve waste water recycling and reducing the amount of material waste within the production process itself. (Sourcing Journal
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March Garment workers in Bangladesh accelerated their push for an increase in their minimum wage, engaging in a protest in front of the Jatiya Press Club in Dhaka. The leaders of the demonstration argued that the National Wage Board, instituted in January to review the current wage structure, has failed to deliver on its designed purpose of improving the standard of living for those employed in the garment industry.  ( Dhaka Tribune )

Cameroon
The Government of Cameroon will begin vocational training along with certifying instructors in order to boost technical proficiency in the country's textile, clothing and fashion industry. South Korea, Switzerland and Turkey will provide technical and financial assistance for the project. At present, only one percent of clothing consumed within Cameroon is sourced domestically. ( Fibre2Fashion )

China
The Chinese government has multiple options at its disposal to respond to the tariffs which have been levied by the United States. With China's GDP already being impacted by the first stage of the trade war, U.S. corporations that have a physical presence in China could be the first to feel any type of retaliatory measures. In addition, China could continue to devalue its currency, sell off a large portion of the U.S. treasuries it currently holds or simply reply with their own targeted tariffs. ( Forbes)

Imports While imports into the United States from China jumped significantly on a month to month basis between April and May of 2018, imports have in fact declined when compared to the same period in 2017. In this one-year period, imports from China declined 2.2 percent.  Meanwhile imports from the second largest importer, Vietnam, increased by over 8 percent within the same period. ( Just Style)
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Ethiopia
The Hawassa Industrial Park in Ethiopia is seen by many as a crown jewel in the post Rana Plaza world. The facility boasts safe, well-ventilated shop floors and an infrastructure focused on environmental sustainability. However, concerns exist that the wages being paid, which average around U.S. $27 a month for the typical worker, are not sufficient for workers to sustain themselves.  ( The Intercept)

India
Garment exports from India declined 17 percent in 2018 and many within the industry are concerned that this downtrend could continue. Many blame the implementation of the Indian Goods and Services Tax along with the withdrawal of duties on imports and several international trading partners beginning to impose Value Added Taxes (VAT) on imports.   ( DNA )

Nepal
The garment processing zone (GPZ) in Nepal's Simara Special Economic Zone (SEZ) will be operational within the next fiscal year, according to the country's SEZ Development Authority. The GPZ was conceived after the United States extended zero tariff preference for 66 Nepalese sourced products through implementation of the Trade Facilitation and Trade Enforcement Act of 2016. ( Fibre2Fashion)

Netherlands
Greenpeace has released its report titled "Dirty Laundry", which detailed the progress made by apparel manufacturers in reducing the introduction of polluted waste water into local water supplies. The report comes after an investigation into polluted waterways in China and has lauded progress made by of several brands in reducing water pollution since the original investigation, but also warns of the potential harm resulting from the emerging fast fashion business and its reliance on polyester which is a known polluting agent. ( Fashion United)

Nigeria
He Fang Fang, a Vice President with the China Chamber of International Commerce (CCOIC), discussed why China is looking to do more business with and within Nigeria. The CCOIC notes a growing international demand for African clothing and believes that by making an investment in Nigeria, it can tap into the production techniques already in existence and help address Nigeria's unemployment issue.  ( The Nation)

Pakistan
Pakistan A 2 percent customs duty was recently imposed by Pakistan's Federal Board of Revenue (FBR) on imports of cotton and yarn to encourage more use of domestically sourced cotton and preserve foreign exchange reserves.  The board also withdrew the exemption of additional customs duty on imports of basic raw materials for the textile industry.   ( Fibre2Fashion )

Switzerland
WTO The World Trade Organization says new trade restrictive measures from G20 economies doubled from mid-October to mid-May, compared to the previously comparable period. In its latest monitoring report on G20 trade measures, WTO Director-General Roberto Azevêdo said the findings should be of "real concern" for the international community. A total of 39 new trade-restrictive measures were applied by G20 economies during the reporting period, including measures such as increases in tariffs, stricter customs procedures, and imposing taxes and duties.  ( Sourcing Journal)
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United Kingdom
Richard Benson, director of British menswear brand Guide Clothing, discussed why the sustainable apparel movement still has not gained the desired momentum with consumers. Benson believes the answer is simple, price. While social responsibility is becoming more of a key concept, Benson contends that price is still the final determining factor in consumers purchasing decisions. ( Just Style)
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United States
TariffThe United States will impose 10 percent tariffs on an extra $200 billion worth of Chinese imports, the US Government said on July 10, while releasing a list of thousands of Chinese imports it wants to slap the tariffs on. The list includes textile raw materials like cotton, synthetic fibers, silk, wool, and yarn and fabric made from these materials.
( Fibre2Fashion)

Start-up label Known Supply is taking the notion of ethical apparel production to a whole new level, by asking factory workers to sign their name to every piece that they manufacture. It is the intent of the brand, which sources production from India, Peru and Uganda, to make consumers step back and consider the workers who assemble the apparel they purchase.  ( Fast Company)

The Baltimore, Maryland metropolitan area provides a snapshot into the ongoing struggle for sustainability in the apparel industry. Many consumers, eying sustainability and lower costs, look to secondhand clothing stores to purchase their apparel. Meanwhile, while many brands continue to produce clothing merely for consumption and disposal, others are openly asking consumers to rethink how they buy apparel and ask themselves a hard question: "Do I really need that new item?"  ( The Baltimore Sun)

The International Monetary Fund (IMF) issued a report warning that while the U.S. economy is at present robust, the protectionist trade policies currently going into force could harm the entire global economy. The IMF did say that while the near-term outlook is favorable, "heightened policy uncertainty and medium-term vulnerabilities," such as rising public debt, trade tensions and income inequality, could have an adverse impact on the expansion.  ( Sourcing Journal )
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U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigation (HSI) division finished its appraisal of more than 181,000 counterfeit items seized in Laredo, Texas. HSI placed the value of the seized items at more than U.S. $42.9 million. After conducting surveillance over a three-day period, HSI special agents observed boxes containing suspected counterfeit merchandise being moved. They then discovered that all shipping labels on the boxes had fictitious delivery addresses in Laredo. ( Sourcing Journal
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Apparel retailers and manufacturers intensely lobbied the Trump Administration not to proceed with planned tariffs against China. Now, with tariffs going forward, those entities have a great deal to lose. The nation's top retailers aren't keeping quiet about the tariffs and the potential for retaliatory tariffs being levied by foreign governments. Major retailers issued a letter to President Trump outlining their concerns with his approach to trade. The letter asserted that the tariffs would lead to retaliatory tariffs on US exports and result in consumers paying higher prices for clothes, shoes, and other goods. ( Racked)

Uzbekistan
German firms signed a series of trade agreements with the Uzbekistan Textile Industry Association worth U.S.$6.5 million. German ambassador to Uzbekistan Gunter Overfeld believes that the  negotiations will result in a  technical assistance program and a knowledge transfer initiative focused on improving textile production techniques.  ( Fibre2Fashion )

Vietnam
Social dialogue in the garment-textile sector is expected to improve following the signing of a memorandum of understanding to promote social dialogue and collective bargaining in the garment sector in Hanoi. Signatories included the Vietnam General Confederation of Labor (VGCL)and the Vietnam Chamber of Commerce and Industry. This agreement is the culmination of efforts by trade unions in Vietnam to expand collective bargaining and overall working conditions throughout the country. ( Vietnam Plus)

Hoi An, a city that many refer to as the "Tailoring Capitol of Vietnam" is known for custom garments that are made to order. Neighborhoods are filled with merchants trying to sell their wares and offer customization options for potential customers. Suzanne Bearne from The Independent detailed her own experience in Vietnam's hotbed for bespoke clothing. (The Independent

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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