Issue 485| September 7, 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 
18 factories in  countries:

 Bangladesh, Cambodia, China, India, Indonesia, Pakistan, Sri Lanka, 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 and Asociación Hondureña de Maquiladores (AHM) have renewed their longtime partnership. To read more about the agreement, please click here
(Article is in Spanish)
Upcoming Events

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


This Week's Headlines


 
Australia
Australian Wool Innovation (AWI), a not-for-profit research and development firm, has begun a first-of-its-kind investigation into the potential of artificial intelligence (AI) in the sheep and wool industry. The project's stated long-term goal is to evaluate the use of AI technologies to predict and manage a sheep's lifetime performance from a young age. It could assist breeders in their selection process by predicting how certain combinations of genes manifest complex physical traits including, but not limited to, a higher wool output.  ( Sourcing Journal )
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Bangladesh
At a workshop conducted by the Bangladeshi government and the International Labor Organization (ILO), the past, present, and future of safety remediation efforts within the country's garment manufacturing sector were front and center. Specifically, discussions focused on what the future held for the new Remediation Coordination Cell (RCC), as it prepares to take over for the international organizations previously handling safety matters in Bangladeshi factories.  
 
The Accord on Fire and Building Safety in Bangladesh and the Alliance for Bangladesh Worker Safety cut ties with 28 ready-made garment factories, a move that comes as the groups face a December deadline to terminate activities as the new Bangladeshi run Remediation Coordination Cell (RCC) prepares to go online. The suspensions are due to the factories failing to institute remediation plans based on deficiencies located during inspections. ( New Age )

unionsThe Bangladeshi government approved a draft of the proposed 2018 Bangladesh Labor Act. One of the objectives of the legislation is to bring worker participation in trade unions more in line with standards in place elsewhere in the world. Specifically, only 20 percent of a facility's workforce would be required to start a trade union in a factory, a reduction from the current threshold of 30 percent. (The Daily Star )

Canada
Trade talks between the United States and Canada kicked off again this week after the two sides ended Friday's tense negotiations without a deal. Both sides believe that an agreement is possible, despite indications from Washington that it is willing to finalize a pact with Mexico which omits Canada. President Donald Trump notified Congress earlier this week that he wants to sign a trade deal with both Canada and Mexico within the 90-day window mandated for Congressional review of any such agreement.  ( CNBC )
 
CambodiaCambodia
Cambodia witnessed exponential growth in exports of apparel to the United States, booking a 21.2 percent increase over a one-year period. The growth comes in a period of uncertainty for Cambodia's apparel industry as the government is considering a raise of the minimum wage along with the possibility that the European Union could remove Cambodia from Everything but Arms (EBA), its most favored trade status for countries in the developing world. ( Just Style)
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China
Chinese President Xi Jinping stated that China is still determined to reform and wants to work with all parties to build an open world economy, reiterating Beijing's message amid a bitter trade war with the United States. Chinese and U.S. officials ended two days of talks last month without a breakthrough as their trade war escalated with the activation of a further round of tariffs on U.S. $16 billion worth of each other's products. The two countries have now targeted U.S. $50 billion of each other's goods and threatened duties on most of the rest of their bilateral trade, raising concerns that the conflict could dent global economic growth. (Reuters)

ChinaAt midnight on Friday, the U.S. Trade Representative closed the comment period regarding the proposed 25 percent tariffs on an additional U.S. $200 billion of Chinese imports. With this period coming to an end, the Trump Administration can now proceed with the implementation of the supplemental round of duties on Chinese goods and such an announcement is considered imminent.  The move would constitute a fourfold increase over the 25 percent duties the United States has already slapped on $50 billion worth of imports from China. Beijing has openly  renewed  its pledge to retaliate by targeting U.S. $60 billion of U.S. goods. (The Washington Post)

India
India is betting that jute, an ancient textile whose harvesting and production have scarcely been touched by modern technology, could be a fabric of the future. Amid a global push to reduce the use of plastic for environmental reasons, jute, which is better known in the United States as the fiber used in burlap, is being seen as a material for producing goods such as reusable shopping bags, home furnishings, clothing, and even diapers.  (Los Angeles Times )

Hong Kong
A new spinning mill in Hong Kong will begin producing recycled yarn spun out of used and discarded clothes, another sign of the industry's newfound awareness of the perils of garment waste. This effort is being piloted in conjunction with retail partners and NGOs and is shooting for a significant reduction in Hong Kong's 340 tons of daily apparel and textile waste.  ( South China Morning Post )
 
Japan
Japan, China, and other Asian states are working on a regional trade pact known as the Regional Comprehensive Economic Partnership (RCEP). The trade compact has been in the works for the better part of a decade, but momentum towards an agreement accelerated due to improving relations between China and Japan, and the United States halting discussions on the Trans-Pacific Partnership.  ( South China Morning Post)

Jordan
With the nation's economy continuing its downturn, sales of school stationery and garments within Jordan have dropped to their lowest rates in years. This decline is happening even though prices have fallen by 10 to 15 percent when compared to the previous year. As Jordanian students start their new school year, parents are now forced to make hard choices when it comes to new school apparel, many times electing to buy less or nothing at all. (Jordan Times)

Kenya
Kenya's principal secretary for trade, Chris Kiptoo, recently presented the country's national African Growth and Opportunity Act (AGOA) strategy and action plan 2018-2023 to U.S. Trade Representative (USTR) Robert Lighthizer in Washington, D.C. The strategy aims to double Kenya's U.S. export value from U.S. $552 million in 2016 to U.S. $1.1 billion by 2023.  ( Fibre2Fashion)

Myanmar
Many experts in the garment industry believe that Myanmar has potential as a sourcing alternative to China. However, with the noted human rights issues within the country and the seemingly lackluster attitude towards modernizing its infrastructure, many are wondering if there is any desire within the government to advance Myanmar's standing in the global apparel market. (Just Style)
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Mexico
It appears that changes for Mexico's apparel industry in the new Mexico-U.S. free-trade accord (now being called the United States-Mexico Trade Agreement, barring a breakthrough in U.S. negotiations with Canada), will prove to be favorable regarding exporting goods to the United States. This favored trade status is likely because the United States currently does not possess a trade deficit with Mexico for apparel and textiles.   (California Apparel News )

Mexico The Mexico-U.S. trade deal now faces review from both nation's legislatures, who ultimately must ratify the agreement for it to come into effect. While it appears Mexico's Congress of the Union will pass the agreement through rather quickly, there is a real possibility that opponents from both sides of America's political spectrum could subject the new treaty to an incredible level of scrutiny within the United States Senate and seek to scuttle ratification. 

Netherlands
Denim City is an impressive educational institution that has a jean school that incorporates a three-year denim-development program to train people in all aspects of the blue-jeans industry with courses, workshops, access to the showrooms of world-renowned denim designers and retail space for consumers. The facility, located in Amsterdam, was founded in 2014 as a collaboration between the House of Denim Foundation and denim industry leaders with a mission to improve production through cleaner, more sustainable methods.  ( California Apparel News )
 
Sweden
Negative interest rates and fractures in one of the world's most stable political systems have made 2018 an unhappy year for Sweden's currency. Down ten percent against the dollar, the krona has fallen more than any other developed-market currency. Among the ten most heavily traded currencies in the world, it is performing poorly even compared to the Chinese yuan and the British pound, both of which are struggling in the face of trade disputes.  ( The Wall Street Journal )
 
Togo
While the import of secondhand apparel provides affordable clothing for poor consumers, it has also undermined local textile manufacturing industries. To curb the trade, the East African Community, an intergovernmental organization of six countries in the African Great Lakes region, placed high tariffs on secondhand clothing imports with the intention of banning them by 2019. Despite these efforts, secondhand clothing still ends up in marketplaces throughout sub-Saharan Africa, including those in Togo, making many consider if the bloc's aims are worth the time and effort.  ( New York Times )
 
Vietnam
Despite Vietnam's rising profile in the international apparel market, many in the Vietnamese garment industry are disappointed by their performance within Vietnam itself. Now, with increasing investment in new technologies and offering products which appeal to the Vietnamese consumer, the industry is looking to compete with, if not overtake, the foreign brands that are currently dominating the marketplace. Specific steps in this plan include expansion of retail networks and creation of original designs unique to Vietnam. ( Fibre2Fashion )

United Kingdom
Least Developed Countries (LDCs), of which there are currently 33 in Africa, are a particular area of focus for the trade policies of the European Union.  These low-income countries are confronting severe structural impediments to sustainable development and have duty-free access for their goods to the EU under an initiative known as Everything but Arms (EBA). Now, with Brexit on the horizon, what this means for trade between Africa and the United Kingdom has yet to be determined. (BBC)

United States
American firms are trying to find ways to mitigate the harm caused by the ongoing trade war with China, and the common theme is that the smaller the enterprise, the more severe the danger becomes. Many U.S. firms that have survived many of the pitfalls of globalization are concerned that with the inevitable price-hike resulting from tariffs, customers will be forced to look abroad for cheaper goods and that smaller manufacturers within the United States could be forced to cease operations. (Sourcing Journal)
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Ed Gribbin, President of Gribbin Strategic, discussed the rise of what he refers to as "local-for-local" apparel in the United States. This particular trend applies to clothing made at a facility for local markets with a focus on rapid turnaround and maximum customization. He believes that this trend can reduce waste and promote sustainability within the apparel industry.  (Sourcing Journal)

WTOPresident Donald Trump said he would pull out of the World Trade Organization (WTO) if it doesn't treat the U.S. better, targeting a cornerstone of the international trading system. A U.S. withdrawal from the WTO potentially could be far more significant for the global economy than even the growing trade war with China, undermining the post-World War II system that the U.S. helped build. (Bloomberg

Growing clothing and textile production are partially responsible for the growth in the U.S. manufacturing industry in August, according to a new report released by the Institute for Supply Management. According to its manufacturing index, the industry witnessed its 24th consecutive month of growth. However, growing concerns regarding trade disputes with Canada and China have tempered the enthusiasm of some in the industry. (The Associated Press)

With elements such as the Internet of Things, artificial intelligence, advanced robotics, augmented and virtual reality, and 3-D printing becoming more prevalent in the apparel sector, it is clear that Industry 4.0 technologies are here to stay. While the adoption of some of these tools, especially 3-D printing, has been slow, many firms are looking to Industry 4.0 tech to assist in right-sizing the supply chain and better anticipating consumer desires and needs. 
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One of the most familiar narratives in the apparel sector has been the oncoming "retail apocalypse" resulting from the diversion of consumer's buying habits to online portals and discount retailers. However, according to the 2018 store report by Retail Systems Research (RSR), 55 percent of top performing retailers plan to expand their presence into new markets and open additional locations in existing markets. Retailers see the uptick as a reflection of their efforts to modernize the brick and mortar experience to be more in line with the online shopping experience when it comes to speed of purchase and selection. ( 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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