Issue 489| October 5, 2018
Upcoming Training

October 9-10
Internal Auditor Course
Shenzhen, China

October 11
Factory Fire Safety
Shenzhen, China

November 19-23 
Lead Auditor Course
Shanghai, China

Welcome to The WRAP Weekly newsletter.  Feel free to look around and thank you for being a loyal reader.

This week, we certified 
23 factories in  13  countries:

Bangladesh, Cambodia, China, Haiti, Honduras, India, Indonesia, Kenya, Pakistan, Philippines, Thailand, United States, and Vietnam.

On September 20, WRAP participated in the webinar "Working Hours Best Practices" in cooperation with the American Apparel and Footwear Association. To download a recording of the webinar, click here. To view other AAFA webinars on a variety of topics, please click here
Upcoming Events

October 18
Ho Chi Minh City, Vietnam
The WRAP Blog
Khoa Nguyen

This Week's Headlines

While Social Development Goals (SDGs) are still a relatively new idea in the business world, a growing number of brands and retailers are turning to the United Nations-adopted objectives as a kind of framework for achieving ambitious environmental, economic and social targets for what the UN labels as "people, prosperity and peace." Industry-wide adoption of SDGs was a topic of note at the World Ethical Apparel Roundtable (WEAR) held in Toronto earlier this week. ( Sourcing Journal
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As the trade war drags on, many experts believe that President Xi Jinping's grip on power will only strengthen. While Chinese citizens are not happy about the slowing economy and falling stock market, early indications are they are more inclined to show patriotism by supporting the state-forwarded narrative that America's trade war focuses on containing the rise of China. So far, Beijing and Washington have held four rounds of formal talks involving senior trade and finance officials. Also, both sides have been in constant communication through other official and unofficial channels to find ways to end the trade dispute, but those efforts have failed to bear fruit. ( South China Morning Post)

Egypt witnessed a 10 percent rise in exports of readymade garments (RMG) during the first seven months of 2018 totaling U.S.$907 million. This is compared to over U.S. $824 million worth of goods exported over the same period in 2017. The Readymade Garments Export Council of Egypt is optimistic about scaling up exports by 15 percent to U.S. $1.7 billion by the year-end. Turkey was Egypt's top RMG importer with a value of U.S. $84 million, followed by Spain with U.S. $79 million. ( Fibre2Fashion)

The Central American Customs Union (CACU) has expanded into a three-country bloc, with El Salvador joining Guatemala and Honduras to forge a light border trading zone of more than 32 million people. This development has been welcomed by Honduran Manufacturers Association, citing that the new arrangement will aid in getting goods to customers faster. Now the bloc is looking to not only encourage trade between current member nations, but to continue growing its ranks. ( Just Style)
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Hong Kong
So far, developing a closed loop or circular economy as a long-term solution to the environmental impacts of the clothing industry and its supply chain has proven to be an arduous and slow task. Industry experts gathered at the Innovation and Technology Symposium at the Fashion Summit earlier this month in Hong Kong to discuss some of the challenges in closing the loop in the fashion industry, citing ongoing concerns about cost control as the primary factor in deterring brands from embracing sustainable practices. ( Just Style)
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According to a report released by banking giant HSBC, the Indian economy is projected to be worth U.S. $5.9 trillion by 2030 and barring anything unforeseen, will emerge as the world's third largest economy, surpassing Germany and Japan. India was seen as 'among the most striking' gainers in HSBC's long-term rankings, citing an economic growth rate of 8.2 percent during the April-June period this year, topping the pace of the previous quarter and beating analyst expectations. ( Fibre2Fashion)

The Southern India Mills' Association (SIMA) has sought textiles minister Smriti Irani's intervention for cleaner cotton and branding of Indian cotton items. In a letter to Irani, SIMA asked for the government to order the Cotton Corporation of India (CCI) to enforce certain regulations in order to curb poor practices that have been adopted by certain ginners. The poor behavior that has been adopted by some ginners has caused Indian cotton varieties to come under the list of top 10 highly contaminated and seed coat (trash) content in the world, as per the Annual Cotton Contamination Survey conducted by International Textile Manufacturers' Federation (ITMF). ( Fibre2Fashion)

No longer the realm of intangible "likes," social media is showing its clout as a platform where sentiment translates into sales, according to Dublin-based digital marketing agency Wolfgang Digital's E-Commerce KPI 2019 report. The report's review of Facebook Analytics data indicates the valuable role the social giant plays in nudging consumers from passive observers to engaged buyers. Data shows that someone's "like" on Facebook is worth three percent of a brand's average order value, and even more telling, three percent of those who click "like" on a brand's Facebook post will end up converting as a customer. ( Sourcing Journal)
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The World Bank reduced its forecast for economic growth in sub-Saharan Africa as the trade environment becomes less favorable amid mounting global trade risks and weakening demand for the area's products.  Gross domestic product (GDP) in the region will probably expand by 2.7 percent in 2018, the Washington-based lender said in an emailed copy of its Africa Pulse report on Wednesday. This is down from the World Bank's June forecast of 3.1 percent contained in the Global Economic Prospects publication. ( Bloomberg)

TurkIndustry heavyweights including Adidas, Gap Inc., H&M, Marks & Spencer, Nike, and VF Corporation are calling for an end to forced labor in the cotton fields of Turkmenistan. The announcement came as the Turkmen President Gurbangluy Berdimuhamedow addressed the United Nations General Assembly for the first time since 2015. This declaration is only the latest development in the ongoing efforts by the apparel sector to push back on unethically sourced cotton from central Asia ( Just Style)
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United Kingdom
Almost 23 percent of Londoner's wardrobes remain unworn, amounting to 123 million items of clothes stuck in closets, according to a recent report by Textile Reuse and International Development (TRAID), a charity working to stop clothes from being thrown away. TRAID's new '23% Campaign' aims to inspire, persuade and encourage Londoners to put these unworn clothes back into circulation. The new campaign is in line with the UN Sustainable Development Goal (SDG) Number 12, to ensure sustainable consumption and production. ( Fibre2Fashion)

United States
USMCAThe United States, Canada, and Mexico have agreed on the framework of the United States-Mexico-Canada Agreement (USMCA), the trade pact that will supersede the 24-year old North American Free Trade Agreement (NAFTA). The White House believes that the deal is a hallmark for trade within North America, stating that it should correct what the Trump Administration considers trade imbalances within North America along with protecting American workers from the offshoring of jobs. ( The Washington Post)

MorganU.S. based investment firm JP Morgan Chase & Co. believes that the trade war between the China and the United States could escalate to an unprecedented level, perhaps becoming what the firm titled as the "most devastating trade war in recorded history." To that end, JP Morgan elected to downgrade all Chinese stocks, and warned investors about making any substantial investments until trade tensions between the two nations cooled. ( Bloomberg)

U.S. apparel giant VF Corp is allowing consumers to track the supply chain footprint for ten of its brands most iconic products through a new online traceability tool. The tool enables users to examine the sourcing path for these goods, from the harvesting of the necessary materials to their assembly and eventual arrival on store shelves  (Just Style)
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U.S. consumers are expected to spend on average U.S. $658 on holiday shopping this year, up from the U.S. $632 last year, with older Millennials expected to spend U.S. $779 according to a study published by Accenture. The report also found that retailers' inclusion and diversity practices regarding age, gender, ethnicity, and disability are playing a role in Millennial shoppers' purchasing decisions. The findings indicate that if a retailer is not authentically committed to prioritizing inclusion and diversity, Millennials are likely to take their business to a competitor who is inclusive. ( Women's Wear Daily)
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To an American shopper, a leather belt is a simple, but vital accessory for any wardrobe. However, the 16,000-mile journey undertaken by this apparel staple from factory to shelves relies on a complex network of companies located all over the world. Now, with the trade war between the United States and China starting to impact apparel, American companies are going to forced to raise prices on a wide swath of items, including the ubiquitous leather belt.
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Consumer spending on clothing and footwear slowed in August, rising only 0.75 percent to U.S. $408.65 million. This compares to U.S. $405.65 million in July, representing an increase of 1.5 percent over June spending according to the U.S. Bureau of Economic Analysis (BEA). This follows a similar pattern found in the U.S. Census Bureau's monthly retail sales report where sales of clothing and clothing accessories stores were down 1.7 percent in August from July, even as they increased 6.2 percent year-over-year. Overall August retail sales, excluding automobiles, gasoline stations, and restaurants, rose 0.1 percent over July (seasonally adjusted) and 5 percent year-over-year. ( 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 .

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