Issue 475 | June 29, 2018
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Welcome to The WRAP Weekly newsletter.  Feel free to look around and thank you for being a loyal reader.

This week, we certified 34 factories in 10 countries:

 Bangladesh, Cambodia, China, Egypt, El Salvador, India, Indonesia, Lesotho, United States and Vietnam.
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August 12-15, 2018  
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August 20-22, 2018
Toronto, Ontario

The WRAP Blog
Seth Lennon

This Week's Headlines

Garment exports increasing in Egypt and Pakistan
Bangladeshi Commerce Minister Tofail Ahmed called for brands to raise prices to help pay for the investments made to improve worker safety and overall working conditions. During his remarks at the latest gathering of the Sustainability Compact, Minister Tofail also discussed the legislative progress made by the Bangladeshi government in improving labor laws. ( New Age

Garment exports from Bangladesh to India, China and Japan grew 17.79 percent year-on-year to U.S. $1.39 billion in the July-May period of the current fiscal year, according to data from the Export Promotion Bureau (EPB). Western brands are sourcing more products from Bangladesh due to lower production costs when compared to other regions of the world.  Also, increasing demand by the Indian middle class for Western apparel, much of which is sourced from Bangladesh, is helping to drive the surge in exports. ( The Daily Star)

Chinese apparel company Suzhou Tianyuan Garments opened a new facility to produce goods for Adidas in Little Rock, Arkansas in January 2018. The opening of this factory was the culmination of negotiations between the Chinese company and Arkansas Governor Asa Hutchinson to bring apparel production back to the state. The Arkansas state government offered Suzhou Tianyuan an incentive package that will include a five-year, 3.9 percent annual tax rebate worth nearly U.S. $1.6 million annually. Other incentives include a U.S. $1 million infrastructure assistance grant for building improvements and equipment purchases, as well as a U.S. $500,000 stipend for worker training. 

The Chinese government released a white paper which stated that Beijing has been acting in accordance with established international trade rules and that it was a protector of free and fair global trade. The report outlines that ever since China joined the World Trade Organization (WTO), foreign firms have had access to Chinese markets. However, concerns still exist regarding China's alleged violations of intellectual property laws.  ( The Wall Street Journal )

EgyptEgypt's Ready-Made Garments Export Council (RMGEC) announced on Tuesday that exports increased by 12 percent during the first five months of 2018 to U.S. $645 million dollars, compared with U.S. $575 million dollars during the same period in 2017. The report cited double digit increases in exports to the United States and the European Union as a driving force for the sector's growth. ( Egypt Today)

E-commerce in India is growing at an exponential rate, fueled by widespread smartphone adoption within India. International Data Corporation expects that around 442 million Indians will have access to some type of smart device by 2022. To cope with the oncoming rise in demand in India, retailers are preparing to enhance their presence within the country, focusing on improving point-of-sale platforms, supply chain management and marketing. ( Sourcing Journal)
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IndiaIndia's Textile Ministry voiced concern regarding the ongoing decline in exports of apparel as orders are being lost to competitors such as Bangladesh and Vietnam. India's apparel exports have been plummeting since October 2017, with the latest decline equaling 16.6 percent or U.S. $13.3 billion in May 2018. ( Hindu Business Line)

The Worker Rights Consortium (WRC) accused major brands of not taking sufficient steps to address violence and abuse directed at workers at an Indian factory. The WRC accused the factory of engaging in vicious retaliation of the workers ability to exercise their fundamental labor rights. The report detailed how physical violence, death threats and possible termination constituted methods that were used to intimidate the workforce. Brands that source from the factory are beginning their own investigation into the WRC's accusations and have promised appropriate action if deemed necessary. ( Just Style
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PakistanAccording to data released by the Pakistan Bureau of Statistics, over U.S. $2.345 billion of readymade garments were exported from July 2017 to May 2018, compared to the exports of U.S. $2.075 billion in the corresponding period last year, representing an increase of  13 percent. ( The Nation)

Pakistan's legislature voiced frustration on how poor planning within Faisalabad's Garment City has prevented the project from aiding more small and medium entrepreneurs to establish their businesses. During a meeting of the Senate Standing Committee on Commerce and Textiles, concerns ranged from the high cost of transportation of products produced within Garment City to the lack of on-site control and oversight due to no central controlling authority within the development. (The Nation)

ConsumersConsumers in countries like Singapore and Malaysia find themselves moving away from "fast fashion" and towards brands that use a more sustainable approach when sourcing their products. While the competition within the fast fashion industry is fierce and there is less individual market share for individual brands, concerns about environmentally sustainable production methods and fair labor standards have given consumers pause and reason to look elsewhere for apparel. (South China Morning Post)

Spanish apparel retailers are having to adjust to an unusually cold summer, with many of them witnessing seasonal apparel still sitting on the shelves and having to deal with the negative impact of an unparalleled amount of unsold inventory. May was the fifth consecutive month of declining sales, with an average decrease of 4.4 percent compared to last year. ( The Telegraph )

Thailand witnessed export growth of 3 percent from January to April 2018 with the United States serving as the largest customer for Thai goods. Exports to the United States totaled U.S $264 million, an 8.2 percent growth from last year; the EU was the second largest market for exports, followed by Japan. ( Just Style)
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MeiLin Wan, Vice President, Textile Sales at Applied DNA Sciences, talked about the responsibility that brands have when it comes to sourcing their products. These comments came in the wake of revelations that cotton sourced from Turkmenistan and Uzbekistan were cultivated using forced labor. MeiLin cited the fact that more than U.S. $140 billion worth of goods suspected of being made by forced labor enters the U.S. market each year. She discussed the risks that come with a tainted supply chain, including potential loss in market share, brand reputation, stolen IP, liability to recall, potential legal and accounting costs, and even criminal action. ( Sourcing Journal)
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United States
China3The White House appeared to have rolled back some of its tough rhetoric on trade with China and there are now hopes that the Administration's new stance on Chinese investment could head off a potential trade war between the two nations. The Administration stated that it would work with Congress to strengthen reviews of foreign investment under the existing Committee on Foreign Investment in the United States, or CFIUS, led by Treasury Secretary Steven Mnuchin.( The Associated Press)

In 2015, Patagonia paused wool sourcing out of concern that there was no way to totally ensure a safe sourcing process that secured the humane treatment of animals. As of the fall of 2018, all of Patagonia's wool products will follow the Responsible Wool Standard (RWS) along with their own more stringent Patagonia Wool Standard (PWS). This was done in collaboration with NGOs who aided Patagonia in locating suppliers who met or exceeded their sourcing standards. ( Sourcing Journal)
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Digital integration of the supply chain is becoming an imperative for brands as it is seen to collaborate with not only internal stakeholders but external suppliers as well. Mark Burstein, President of NGC Software, discussed the challenges associated with totally digitizing a supply chain, along with the inherent advantages of doing so. He discussed how machine learning and AI are increasingly being incorporated into supply chain networks, since the massive amounts of data and various options for each opportunity are too vast for humans to quickly and accurately analyze. 
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NSF International penned an Op-Ed in Sourcing Journal talking about how textile and apparel producers are making sustainability within their supply chains a higher priority than ever before. With growing pressure not only from consumers, but also international agreements such as the UN Sustainable Development Goals, the Paris Agreement and the EU Circular Economy Action Plan, brands are now realizing that sustainability is vital. ( Sourcing Journal)
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According to the Cotton Incorporated Lifestyle Monitor survey, American consumers made it clear that products Made in the USA had a leg up on their foreign-sourced competition. Furthermore, the study indicated that not only do consumers want the final assembly to occur in the United States, but that there is a demand for all raw materials within the supply chain to be sourced domestically as well.  ( Sourcing Journal )
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American outdoor apparel brand Timberland has increased the use of ethically-sourced cotton in its products during the first quarter of 2018. 81 percent of cotton used in Timberland products was either organically sourced, of US origin or Better Cotton Initiative certified. This is only the latest indicator of the brand's commitment to ethical sourcing, as evidenced by the fact that 99 percent of items sourced from its 381 factories met or exceeded the company's social compliance expectations. ( Just Style)
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WRAP President and CEO Avedis Seferian, along with Vice President Clay Hickson, led a webinar in collaboration with the American Apparel and Footwear Association (AAFA) to discuss the latest developments in corporate social responsibility (CSR). During his remarks, Seferian addressed the complexity of dealing with forced labor throughout the supply chain, stating that given the visibility challenges in zeroing in on all layers of the supply chain, it could be difficult to ascertain exactly when and if forced labor is being employed. ( Just Style)
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DJTU.S. President Donald Trump told top aides within his administration that he would like to withdraw the United States from the World Trade Organization (WTO), a move that many experts warn would destabilize the global economy. While the move is unlikely since Congress would have to approve a U.S. withdrawal from the WTO, it is only the latest sign of White House frustration with the trade body. Last week, the United States continued challenging the WTO, telling the Geneva-based economic organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days. (Reuters)

Foreign Direct Investment (FDI) in textile-garment projects in Vietnam has grown thanks to the European Union (EU)-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Vietnam Textile and Apparel Association (VITAS) General Secretary Nguyen Thi Tuyet Mai hinted at further expansions in FDI as EU import duties are relaxed because of the trade pacts. ( Fibre2Fashion)
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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