Issue 473 | June 15, 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 25 factories in 16 countries:

 Bangladesh, Cambodia, China, Guatemala, Honduras, India, Kenya, Madagascar, Nicaragua, Pakistan, Philippines, Sri Lanka, Taiwan, Thailand and Vietnam.
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The WRAP Blog
By:
Seth Lennon

This Week's Headlines


 
Bangladesh
The Swedish non-profit Swedwatch released its "Power of the Voice" report that explored the progress made with regards to improving conditions for garment workers in Bangladesh post-Rana Plaza. The report outlined the still existing need for real improvement, especially in the areas of freedom of association, anti-union policy making by the government and factories becoming more transparent. The brands that participated in the survey have said that they are working to address those issues through auditing and relationship building with suppliers.  ( Just Style )
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IMF According to a report issued by the International Monetary Fund (IMF), the economy of Bangladesh grew 6 percent over the last decade. During this time period, Bangladesh rose from a nation categorized as low income to one that has a lower-middle income status. Overall, poverty has been on the decline and the economy is evolving from being agriculturally based to one which is more focused on manufacturing. However, the report does cite the need for the country to address bottlenecks in infrastructure and to expand its export presence. ( Just Style )
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The International Trade Union Confederation (ITUC), the Clean Clothes Campaign (CCC), and the HEC-NYU EU Public Interest Clinic have filed a complaint with the European Ombudsman claiming that the European Commission has not taken into account obligations regarding human rights issues when it comes to trade with Bangladesh. The complaint alleges that the European Commission has not properly taken into account Bangladesh's alleged violations of human rights nor the country's labor laws that create roadblocks for free association. ( Just Style)
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A roundtable was organized by Bangladesh Institute of Labour Studies-BILS and The Daily Star to discuss where the garment industry stood after the collapse of Rana Plaza five years ago. The group focused on how more accidents can be prevented, medical treatment and rehabilitation of injured workers, workers compensation and what type of progress needed to be made on these fronts. ( The Daily Star)

Canada
The leaders of the G7 countries were frustrated by what they perceived as reckless actions by the United States on trade, and are now prepared to engage in measures to safeguard their own economies from the after effects of the Trump Administration's policies. Some, like Canada, have elected to be aggressive in their responses by slapping reactionary tariffs on the U.S. while others, such as Germany and Mexico, are taking a more wait and see approach to evaluate if trade tensions will cool over time. ( Politico )

China China
China officially announced retaliatory tariffs against the United States after the Trump Administration formally enacted 25 percent tariffs on Chinese imports. Prior to this announcement, both governments were working towards measures designed to relieve tensions. However, as of Friday morning, the United States regarded those efforts as "invalid." Washington is already preparing to move forward with an additional round of tariffs in response to those levied by China. ( Washington Post)

European Union
29 Ambassadors to the United States from European Union member nations contributed to an op-ed in the Washington Post outlining their objections to the U.S. action's on trade, citing the fact that the trade relationship has been beneficial for both sides and that engaging in any kind of trade war would solve nothing and only serve to hurt citizens across the world. ( Washington Post)

Guatemala
South American nations are becoming concerned that Vietnam, a nation which has of late become a powerhouse in the apparel manufacturing sector, is starting to seize some of their business, especially from the North American market. Factory owners in Guatemala for example note that factories in Vietnam are making similar products 40 percent cheaper than they are able to and are concerned that the difference will increase as new trade treaties go into effect. 
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Hong Kong
Leaders from three of the sourcing industry's top consulting firms discussed how to address supply chain issues caused by the rise of digitization in the marketplace. The panel believed that if there was a commitment to modernize the back-end portion of the supply chain to the point where consumers could receive apparel just as easily as they ordered it, much of the issues facing the industry could be addressed. Another topic was that brands must stop obsessing with making production as cheap as possible and instead focus on finding a balance between quality and value. 
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India
Factory owners in Ludhiana are demanding that the Punjab State Power Corporation Limited (PSPCL) roll back its recent decision to levy an additional charge of Rs 2 (U.S. $0.30) on industrial units. This request is driven by the concern that any such charge could have a negative impact on their ability to compete in the marketplace. ( The Times of India)

The concept of up-cycling is gaining momentum as sustainability becomes mainstream, and the Indian fashion industry is taking note. More individuals are simply adjusting or modifying old clothes rather than just throwing them away, a reaction to what some see as rampant waste in the fashion industry. Designers piece together waste fabrics and employ traditional techniques like patchwork or kantha to add value to the up-cycled product.   (The Economic Times

Netherlands
The Safer Chemistry Innovation in the Textile and Apparel Industry report, formulated by Safer Made - a venture capital fund - and commissioned by Fashion for Good - an Amsterdam-based global initiative to make all fashion good, released its findings which outlined how the apparel industry will change dramatically over the next 10 years. Specifically, the report concluded that the industry will remove harmful chemicals from its supply chains and become a more environmentally responsible actor within the global economy. ( Fibre2Fashion)

Nigeria
Affiliates of the global union IndustriAll located in Nigeria, Uganda and Zimbabwe voiced their opposition to continued importation of used clothing from the United States, citing the damage being done to the domestic apparel production sectors in those countries. This request comes at the heels of Rwanda blocking the import of used clothing from the United States and the subsequent U.S. response of suspending the duty-free importing of clothing from the African nation. ( Just Style )
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North Korea
With tensions beginning to thaw between the United States and North Korea leading up to the summit in Singapore, there is now the real possibility of North Korea being a new sourcing destination for apparel manufacturers. The country's garment and textile industry was estimated to be worth $725 million in 2016, a substantial proportion of its economy. Even with sanctions in place, apparel manufacturing employs a significant number of North Korean citizens in state-run factories around the country. ( Business of Fashion)

Russia Russia
As the 2018 edition of the FIFA World Cup in soccer gets going in Russia, accusations have been leveled towards Adidas and Nike of paying workers making their apparel what have been termed as "poverty wages." The accusations were published in the report titled "Foul Play: Sponsors Leave Workers on the Sidelines", which was prepared by Ethics on the Label, a member of the Clean Clothes Campaign. The report stated that there was an opening for the brands to make amends, specifically in not only directly addressing wages, but also in addressing freedom of association issues within those countries where the labels had a manufacturing presence. ( Sourcing Journal)
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Turkey Turkey 
Turkey intends to impose new requirements on textile firms who choose to import materials from China. In a meeting between the Turkish economic ministry and textile company representatives, the government stated that its goal was to address the trade deficit with China. However, at the conclusion of this meeting, the government did not unveil any type of formal response. Business leaders are concerned about the impact that any kind of trade measures could have on their bottom line and asked that, at the very least, the government delay implementing such measures. ( Reuters)

United Kingdom
The United Kingdom is disputing a multi-billion euro charge from the European Commission regarding unpaid duties on Chinese imports of clothing and footwear. The EC announced in March that it was intending to recover the duties, citing a report that claimed that the UK "attracted far more of the fraudulent traffic and textiles than any other EU state and that  lax controls permitted fraudsters to import Chinese goods under false invoices." ( Just Style)
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United States
Food waste is one of the most prevalent sustainability issues facing the globe right now. Circular Systems is a startup looking to at least partially address this issue by using food waste such as banana by-products, pineapple leaves, flax and hemp stalk and converting it into usable fiber that can be woven into garments. Circular Systems is currently working with brands to bring their fibers into supply chains, and recently received a grant from the H&M Foundation to scale up their operations. ( Fast Company)

The evolution of the supply chain has enabled small startup companies to complete with the larger brands in ways that were not possible a few years ago. Specifically, e-Commerce has enabled these smaller firms to remove the need of having an expensive physical location and sell online, eliminating the associated overhead. Many state and local governments throughout the United States are noticing this trend and providing government assistance in order to incubate the garment industry within their jurisdictions. (
Sourcing Journal)
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With the closure of Alice Mills, there are now only two mills capable of wide weaving left in the United States. This is the latest event in the decline of the U.S. wide weaving industry, a decline that began 15 years ago when production started to be outsourced to locations such as China, India and Pakistan. Prior to this shift, the United States was the world's largest producer of wide-width goods. ( Sourcing Journal) 
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Vietnam
According to the report issued by human resources company Korn Ferry, Vietnamese garment producers need to further automate production in order to adapt to the new reality where wages in the country are growing and smaller orders are becoming more of the standard. Wages in Vietnam have grown by 4.7 percent in the last year, one of the highest annual growth rates in Asia. This, combined with the transition towards smaller quantity orders, has put a strain on Vietnam's ability to keep up with changing trends. ( Just Style)
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World Footwear announced that Vietnam produced 1.18 billion pairs of shoes in 2017, giving it a 5.2 percent share of the world market and making it the third largest shoe producer in the world. Vietnam was also the second largest exporter of footwear, shipping 1.02 billion pairs around the world. When it comes to U.S. footwear imports in particular, Vietnam is the second largest supplier of shoes after China. ( Sourcing Journal )
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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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