Issue 483| August 24, 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.

This week, we certified 
51 factories in  17  countries:

 Bangladesh, Cambodia, China, Colombia, Egypt, El Salvador, Haiti, Honduras, India, Indonesia, Nicaragua, Pakistan, South Korea, Sri Lanka, 
Thailand, UAE, 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
The WRAP Blog
Seth Lennon

This Week's Headlines

Six digital centers have been established to ensure easy, fast, and low-cost access to public and private services for garment workers in Gazipur. The centers, a joint venture between Access to Information (a2i) Bangladesh and the United States Agency for International Development (USAID), are focused on providing services such as banking, e-commerce and renewing/securing government documents such as birth certificates.  ( Dhaka Tribune )

BangladeshIn what is viewed by some as another concession to the garment industry in Bangladesh, the government has announced that it intends to cut withholding and corporate tax for garment exporters.  Earlier this year, the Bangladeshi Revenue Authority stated that it intended to raise export taxes on Bangladeshi goods in order to increase state revenues.  Last fiscal year, garment exports earned U.S. $30.61 billion, amounting to 83.5 percent of the revenue earned by all products exported out of the country.  ( Daily Star )
In November 2017, the Bangladeshi government installed a minimum wage board to review the existing pay structure and examine a potential increase in the minimum wage for apparel workers. Now, with unrest mounting within the industry due to a perceived lack of progress, many are wondering whether a true living wage can be a reality. New Age reporter Shaikha Shuhada Panzeree writes about the ongoing minimum wage movement within Bangladesh and pulls back the curtain on the struggle that many young workers employed in the industry face.  
(New Age)

Over the past several months, the levying of tariffs by the United States on several of its closest trading partners has dominated the news. Many within the apparel industry are starting to wonder whether protectionism and trade wars will evolve into the status quo worldwide, especially as Canada, Mexico, and the United States engage in contentious discussions regarding the future of the North American Free Trade Agreement. ( Sourcing Journal)
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Several Chinese apparel and textile companies attended the Apparel Textile Sourcing Canada trade show held this past week in Toronto, a further sign that Chinese firms are seeking additional investment opportunities in the Canadian marketplace. Clay Hickson, Vice-President, Strategy & Business Development for WRAP discussed China's ongoing importance as a global sourcing base. ( China Daily

With the list of Chinese goods subject to tariffs by the United States growing by the week, nations like Cambodia and Vietnam are looking more attractive than ever for apparel and accessory manufacturers. And while the Trump Administration has slapped duties on goods from many of its largest trading partners this year, Cambodian products continue to enjoy duty-free access to the U.S. market. (Bloomberg)

CambodiaThe Cambodian Ministry of Labor and Vocational Training will start talks with the nation's labor unions next month in order to establish a minimum wage for workers employed in the textile, apparel and footwear industries. In October 2017, Cambodia raised the minimum monthly wage of workers in its textiles and footwear industry by 11 percent to U.S. $170 after labor unrest caused several U.S. brands to voice concerns about whether sourcing from the country could still be viable.  (Sourcing Journal)
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Beijing is taking steps to respond to the slowing economy within China as the trade war with the United States continues to intensify. The government is urging financial institutions to be more aggressive in their lending while asking local and regional governments to ramp up large projects. All of this comes after the United States instituted another round of tariffs, an action that China responded to with tariffs of its own. The Chinese have also filed a formal compliant with the World Trade Organization. (The New York Times)

Researchers at the e-commerce firm Alibaba are developing several machine-learning systems that could help provide an edge when it comes to spotting, and perhaps even shaping, the latest fashion trends. The growth in the use of artificial intelligence by brands is in response to social media and other internet tools causing consumer buying habits to change and evolve faster than ever seen before.   ( South China Morning Post )

Germany is expected to end 2018 with a €264 billion (U.S. $299 billion) trade surplus, far more than its closest export rivals Japan and the Netherlands, according to research published Monday by Munich-based economic research institute Ifo. However, the latest surplus figures indicate a slight dip as a proportion of Germany's total economic performance compared to 2017, falling from 7.9 percent to 7.8 percent. Ifo's report considers trade in goods, services, and income from foreign assets. ( Deutsche Welle )

A fire was reported in a garment factory known as Doswal and Sons in Basant Bagh Shivpuri neighborhood of Ludhiana on Sunday morning. The fire brigade took almost two hours to douse the flames that had covered the ground floor of the building. No further information on causalities or damage were made available by local authorities. ( Times of India)

A sharp increase in the price of Merino wool imported from Australia has put pressure on India's domestic wool industry, particularly shawl manufacturers, knitwear units, and manufacturers of suits, shirts, and woolen garments. Prices of raw Merino wool imported from Australia have risen between 30 percent and 200 percent depending on microns in the past 7-8 months, experts in the textile industry said. ( The Tribune of India )

KazakKazakhstan and China are looking to increase cooperation within the textile industry, especially considering the raw volume of unprocessed Kazakh cotton available for import. Leaders from 30 Chinese textile companies visited Astana in an effort to expand their investment in Kazakhstan's cotton industry with the end goal of increasing business between the two nations.  (Fibre2Fashion)

Since the start of July, the Turkish lira has declined by as much as 35 percent against the U.S. dollar, and there are few indicators that the slide will be halted any time soon. On Wednesday, 16 cents could buy one lira, while at the same time last year that 1 lira would have cost 28 cents.  The decline of Turkey's currency could prompt several U.S. brands to increase the number of goods sourced from the country. (Sourcing Journal)
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United Kingdom
A staggering 235 million items of unwanted clothing were dumped in UK landfills in 2017, while the average American is estimated to simply throw away 81 pounds of used clothing annually. Over-consumption and the inevitable disposal of unwanted clothing have become a global concern, and, in many cases, clothing is unnecessarily disposed of when it could be repaired or recycled. ( The Independent )

The rise of small clothing makers reflects a possible shift in consumer preferences away from big brands. The rise of the internet is doing much to fuel this trend, as it makes it easier to not only make goods to put in front of consumers, but also easier to better read how trends are developing. This enables these small companies to make small batches of apparel, a development that could also help reduce apparel waste throughout the world.  ( The Associated Press )

The unveiling of a plan for what is called a "no-deal" Brexit has stoked the fears of many in both the European Union (EU) and the United Kingdom about the impact such a separation could have.  Leaving the single market without a deal means significantly higher barriers to trade with the EU. Consumers could find traveling into the EU and making card payments for EU products becomes more expensive due to the fact that Britain would no longer be part of the EU's common payments process.  (BBC)

United States
China2The United States and China went ahead with tariff hikes on billions of dollars of each other's goods in an escalation of a battle that companies fear will chill global economic growth. The increases came as envoys met in Washington for their first high-level talks in two months.  U.S. importers bringing in any of the targeted goods, like injection molding machines for footwear manufacturing or textile extruding machines, from China are already paying the additional 25 percent duties at the border.  ( Sourcing Journal )
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The U.S. Trade Representative's office began on Monday an extraordinary six days of public hearings on President Trump's plans to tax an additional U.S. $200 billion in Chinese products. The latest tariff proposals, along with earlier levies on U.S. $50 billion in Chinese imports, would mean that by next month roughly half of everything American businesses import from China would confront special taxes.  (The Washington Post)

The National Council of Textile Organizations (NCTO) has reiterated its call for the United States to impose U.S. $200 billion in tariffs on apparel. The NCTO claims that the trade measures are appropriate in order to respond to what it believes is China's rampant abuses of intellectual property law.  (Just Style)
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FedThe trade war between the United States and China was a topic of discussion for the Federal Reserve during its August meeting. According to the minutes released to the public, the leaders of the U.S. central bank voiced concern about the impact of the trade war, citing the possibilities of decreased hiring by businesses along with a decline in consumer's purchasing power. (Reuters)

The next round of tariffs to be imposed by the United States will have a profound impact on the apparel and textile industry and retailers are working to mitigate any negative effects on their bottom lines. One such company is JOANN, the leading fabric and craft retailer in the United States. JOANN contends that duties on fabric, fleece, and yarn will discourage American manufacturing and is joining several other American companies in requesting a tariff exemption from the U.S. Trade Representative.  ( USA Today)

The National Retail Federation (NRF) revised its 2018 economic forecast, saying retail sales are expected to increase by at least 4.5 percent this year compared with 2017 after an earlier forecast saying retail sales would increase 3.8 percent to 4.4 percent, said Jack Kleinhenz, the NRF's chief economist.( California Apparel News )

RFID technology has caused some division within the apparel sphere. While retailers laud its ability to aid in managing their inventory and keeping costs at bay, manufacturers are still struggling to find an appropriate adaptation of the technology and are hesitant about the large-scale investment required to integrate the appropriate systems into their operations. (Supply Chain Dive)
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 .

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