Issue 471 | June 1, 2018
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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 44 factories in 14 countries:

 Bangladesh, China, Dominican Republic, El Salvador, India, Indonesia, Laos, Madagascar, Mexico, Myanmar Pakistan, Sri Lanka, Thailand and Vietnam. 
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The WRAP Blog
By:
Darlene Ugwa

This Week's Headlines




Austria
Tricia Carey, Director of Global Business Development at Lenzing Fibers, discussed what she views as the growing importance of transparency. Noting how social media and the resulting ease of obtaining information by consumers and shareholders has brought transparency to the forefront, Carey outlines how important it is for companies to be forthright in their practices and to adopt a mindset of accountability and corporate social responsibility. ( Sourcing Journal
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Bangladesh
BangladeshA report commissioned by a coalition made up of the Asia Floor Wage Alliance, CENTRAL Cambodia and Global Labour Justice detailed an investigation into gender based violence in factories in Bangladesh, Cambodia and Indonesia. This investigation outlined accusations of sexual harassment and resulting retaliation against the accusers. This report comes ahead of a convention being organized by the International Labour Organization designed to set international labour standards on gender-based violence. (bdnews24.com)

AmbassadorMarcia Bernicat, U.S. Ambassador to Bangladesh, lauded the improvements in worker safety in Bangladesh's textile industry spurred on by the Rana Plaza disaster in 2013. Speaking at a press conference conducted by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Ambassador Bernicat noted that there was work still to be done and urged BGMEA and the Bangladeshi government to come to a quick resolution regarding extensions for the  Accord and the Alliance. (Fibre2Fashion)

The Bangladeshi government is establishing an industrial safety unit under the Department of Inspection for Factories and Establishments (DIFE). The goal of this new body is to ensure safe working conditions across all industries in the country. DIFE Inspector General Md Shamsuzzaman Bhuiyan stated that this body would eventually take over the responsibility of safety monitoring of the industrial sector. (New Age)

Industry quality assurance provider Intertek, in concert with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), has introduced the latest in a series of training courses under the Skills for Employment Investment Programme (SEIP), designed by the Bangladesh government to support the apparel and textile sector. The objective of the program is to use both practical and classroom instruction to build awareness of quality assurance training within the Bangladeshi textile sector. (Fibre2Fashion)

Cambodia
Cambodian Prime Minister Hun Sen ordered the Labour Ministry to address the concerns of the laborers at the First Gawon factory in Phnom Penh's Chak Angre Krom commune.  Workers at the factory have refused to work due to the fact that the factory has not paid their wages since December 2017. In March, the government announced that it was prepared to pay out U.S.$4.6 million to the 4,100 workers who still await payment of lost wages. The Prime Minister stated that factory owners fleeing the country when their facilities go bankrupt was not uncommon with workers having no idea when and if they will be compensated. (Khmer Times)

China
USThe Trump Administration has announced it will proceed with U.S. $50 billion in tariffs against China, 10 days after Treasury Secretary Steven Mnuchin announced that the tariffs would be placed on hold while talks were held to cool tensions between the two nations. The tariffs will be coupled with new limits on investment in Chinese firms, due to go into effect in late June. ( The Washington Post)

Concerns exist about China's ability to handle a protracted trade war with the United States that could result from the implementation of U.S. $50 billion in tariffs by the Trump Administration. Concerns are not centered around the first round of tariffs, but rather the damage that could be caused should the trade war escalate and the loss of not only American markets for Chinese goods, but the loss of American sourced components within China's own supply chain. 

14 Chinese firms are in the 2018 BrandZ Top 100 Most Valuable Global Brands Report, a dramatic increase from the 2006 edition where only one Chinese firm made the top 100. The growth in Chinese markets is driven by a growing middle class within the country that is very connected to eCommerce and becoming more demanding when it comes to the quality of their products. (Sourcing Journal)
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The 40th annual International Textile Machinery Shipment Statistics detailed how China invested in apparel and textile production machinery, despite the fact that growth in these sectors has declined. The report, produced by the International Textile Manufacturers Federation (ITMF), showed that deliveries of new short-staple spindles, long-staple spindles and open-end rotors increased 21 percent, 46 percent 24 percent, respectively, in 2017 from 2016.  According to the ITMF, the 2017 survey was compiled in cooperation with more than 200 textile machinery manufacturers representing a comprehensive measure of world production. (Sourcing Journal)
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European Union
EUThe European Union has responded to the Trump Administration's announcement of aluminum and steel tariffs against Canada, Europe and Mexico by announcing tariffs on U.S. made clothing. Specifically, the 25% tariffs will target items such as  men's and women's blue jeans, T-shirts, shorts, men's synthetic woven industrial and occupational trousers, cotton woven bed linen that is not printed, and footwear with upper and outer soles of leather not covering the ankle. The estimated value of these items is U.S. $88 million and the tariffs are due to go into effect in late June. 

Guatemala
While trade tensions between the United States and Asia are causing uncertainty within the apparel sector, there is no such apprehension within the Central America market as evidenced by those in attendance at the 27th Annual Apparel Sourcing Show in Guatemala City. Several American firms returned to the show after long hiatuses that in some instances spanned over 20 years. U.S. brands in attendance said they are looking to return to Guatemala and other Latin American countries for their production needs, citing distance from the Untied States, improving quality and uncertainty within Asian markets. ( California Apparel News)

India
ECommerce has taken some time to gain a foothold in India, with 95 percent of transactions being conducted in cash in 2016. However, over the last 18 months, the Indian Government's demonetization plan has seen a rise in eCommerce as rupees are being removed from circulation. In response, Indian brands are quickly building up their online presence, especially in the apparel field. Indian apparel brands, which offer competitive quality when compared to imported brands, are using the growing Indian eCommerce trend to get their products to market at competitive prices. (pymnts.com)

The Indian government has selected ImpactPPA as the blockchain technology provider for the Bhartiya Harit Khadi Gramodaya Sansthan (BHKGS), which loosely translates to the "Indian Green Cotton Textile Village Development Organisation."  This government sponsored program aims to employ up to 50 million women from various states. The project will install looms for textile work in women's homes starting in Khanwan Village of Bihar. The hope of this project is to raise family income by 60% in some of the poorest villages of India where the monthly minimum wage is less than 7000 rupees (approximately U.S. $104.50.) (Fibre2Fashion)

Garment workers in Karnataka demanded that the newly formed state government implement the revision of minimum wages that was withdrawn by the earlier government in March 2018. The Siddaramaiah-led Congress government had issued a draft notification in February 2018 proposing to double minimum wages in the state's garment industry. The notification was withdrawn by the government due to objections by the industry that the increased wages would negatively impact factories located within Karnataka. (Fibre2Fashion)

Philippines 
Deputy U.S. Trade Representative Jeffrey Gerrish met with senior government officials and business leaders from the Philippines in order to improve economic ties between the two countries and lay the groundwork for a free trade pact. The Philippines is currently the 31st largest trading partner to the U.S. In 2017, bilateral U.S. goods trade with the Philippines was U.S. $20.1 billion, with U.S. exports of  U.S. $8.5 billion and U.S. imports from the Philippines of U.S. $11.6 billion.  ( Sourcing Journal)
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Rwanda
In July 2016, the east African countries of Rwanda, Kenya, Tanzania and Uganda hiked tariffs on imported second-hand garments, out of concerns that cheap, used clothes from abroad were negatively impacting their domestic clothing production industry. Rwanda reportedly increased duties by 20 cents to $2.50 per kilogram. With the  60 day period given by the United States for Rwanda to reduce these tariffs having expired, the United States has alerted Rwanda that consequences could be on the horizon. While the exact nature of these consequences is unknown at the moment, there is concern for the thousands of jobs in both Rwanda and the United States. (CNBC)

United Kingdom
Mamoq, a sustainable fashion retailer based out of the United Kingdom, joined graduate students from the University of Cambridge to put together a study on what dictated the buying behavior of consumers, specifically examining where sustainability fit into that equation. The review revealed that sustainability was a distant fourth in consumer priorities while fit, price and style lead the way. ( Sourcing Journal)
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The denim industry in the United Kingdom is making a comeback, buoyed by small firms looking to make their name in the marketplace. Small companies, many with a workforce numbering under a dozen are looking to make their way into an industry that Britain has not been a major player in for decades. The reaction has been mixed so far; some purchasers are hesitant due to the lack of familiarity with British made denim while others noted the high quality craftsmanship  encountered in other British textiles. (The New York Times)

United States
BetterThe non-profit Better Buying has created the Better Buying Purchases Practices Index, an effort to benchmark purchasing practices across global supply chains. Better Buying rated buyer's purchasing behavior based on seven categories: planning and forecasting; design and development; cost and cost negotiation; sourcing and order placement; payment and terms; management of the purchasing process; and CSR harmonization. Buyers were ranked on a 1-5 scale with 5 being the highest score and according to the report, the average overall score for buyers in this cycle was 2.5 stars, with the best performing category being Payment and Terms with 4.5 stars, while the worst performing category was Sourcing and Order Placement which received an average of 0 stars. (Sourcing Journal)
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Vietnam
Vietnam's apparel and textile industry believes that exports will top U.S. $200 billion by 2035, encouraged  by new innovations within the sector. In quarter 1 of 2018, the industry witnessed export growth of 15.4%, with Japan currently standing as the largest market. These prospects are spurred on by the soon-to-be ratified Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade agreement. ( Just Style
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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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