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Articles Of Interest
CAFTA-DR Approved by Senate
Flooding Hurts Surat's Industry
WTO eal Ends US Cotton Subsidies
Burma Import Ban Renewed
Ethical Clothing Gaining
Interest in UK
Moss Named Best Dressed
Buyers' Best Sellers
Inditex Tough on Suppliers
New Way of Meeting Dates
Cost of a Spelling Error
Window Shopping Takes on New Meaning at Ralph Lauren
Underwire in Bra Attracted Lightning
July Retailers' Sales Review
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August 15, 2006
Women's Wear Journal
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Legislation to implement certain rules of origin changes for apparel
imported under the Central American Free Trade Agreement (CAFTA-DR) has taken its next step forward after being approved by the Senate.
The measure, which was attached to a pension bill, was passed by a Senate
vote of 93-5 on August 3, and will now be sent to President Bush who is expected to sign the bill into law.
Cass Johnson, president of the National Council of Textile Organizations
(NCTO), said: “It was important to the US textile industry that CAFTA
passed and we were glad that textile-state members provided the margin of
Under the new proposals, the material for pockets going into apparel made
in the CAFTA-DR region will have to be made in the US or CAFTA-DR countries
for the product to enter the US duty free. In the CAFTA-DR that was originally negotiated, this material for pockets could originate in third
In exchange for this revision in the CAFTA-DR rules of origin, the bill gives duty-free access through 2007 to imports of certain clothing from El
Salvador, Guatemala, Honduras and Nicaragua not included in the original agreement, including apparel made with fabric from third countries.
With respect to the TPL, Nicaragua has already agreed that it will increase its purchases of US trouser fabric equivalent to its use of the TPL for trouser fabric sourced outside the region.
The provisions in this legislation simply provide US Customs and Border
Protection with the necessary authority to enforce this arrangement.
Another ‘fix’ included in the pension legislation is a mechanism for
refunds of duties inadvertently imposed on companies during CAFTA
The provisions allow importers to apply for refunds for duties that were
paid, but were not required as countries joined CAFTA on a “rolling” basis
and thus became duty-free.
The duties have had a harmful effect on US apparel imports from the
Imports fell 17.3% in the first five months of 2006 versus the same period
in 2005, and US apparel imports from that region now account for only 15.9%
of total US apparel imports, compared to 18.7% during the same period last
US fabric exports to the CAFTA-DR region declined 13.1% in the first five
months of 2006 from the same period in 2005.
Flooding Hurts Surat's Industry
Industrial city Surat is expecting losses of more than INR20,000
(US$4.7bn) from recent flooding, with the textile industry one of the worst hit.
Textile units have been washed out, with thousands of tones of raw material and yarn turned into destroyed.
Dipankar Roy, Director of Federation of Indian Chambers of Commerce and Industry's Gujarat State Council, was reported as saying the effects were
beyond imagination. "Surat’s main industry is diamond cutting and
textiles. That is totally devastated," he said.
Large-scale companies like Reliance and Essar have been forced to completely shut down plants or reduce output.
The National Underwear Day celebration in Times
Square, New York City, Wednesday August 9, 2006.
Wal-Mart to Cooperate
With Chinese Unions
Wal-Mart announced that it will not prevent Chinese workers from
unionizing and denied suggestions that the world’s largest retailer adopts an
The retailer has said that it will cooperate with the All-China Federation
of Trade Unions (ACFTU), the official group that all Chinese unions must be
Wal-Mart employees have formed unions at stores in Quanzhou, Shenzhen and Nanjing in the past two weeks, increasing pressure on Wal-Mart to
recognize the union. Wal-Mart has also reportedly come under pressure from Beijing to
treat unionized workers equally.
In response, Wal-Mart has said it will seek negotiations with the ACFTU on
how to cooperate effectively.
Wal-Mart opened its first store in China in 1996 and recently revealed
expansion plans that would involve hiring an additional 150,000 employees in the country.
Venezuela's Textile Industry
Textile firms are switching from production to importing or selling Venezuela's textiles trade is starting to feel the pinch from soaring Asian
textile and apparel imports, an industry executive said, adding that if
nothing's done to change the situation, the textiles industry "is going to
disappear little by little."
Carlos Lira, general manager of Caracas-based apparel firm Ideas Textiles
Karli, said Asian imports soared over 70% in the first half of 2006 and that the government of Hugo Chavez has done nothing to slow the influx.
Douglas Montes de Oca, general manager for cotton maker Textilana said the
government policies to boost the value of Venezuela's Bolivar currency is fueling the problem.
"Imports from Asia as well as from Colombia and Peru are rising a lot and
this is a problem," Montes de Oca said, adding that he doesn't expect the
government to help improve the situation in the medium term, partly because
the textile industry plays a small role in the country's economy.
To adapt, "many companies are changing from being producers to importers or
sellers," said Montes de Oca. "In five to ten years, it's unlikely that we
will produce many textiles," he added.
Karli now makes up to 60,000 hats annually but starting next year, the
company will be making more industrial clothing and fewer hats, Lira noted.
Despite the Asian incursion, the textiles and apparel industry is expected
to grow up to 10% this year, Montes de Oca predicted.
Domestic apparel consumption is very strong as Venezuela's economy has benefited from strong oil prices and the government is increasing clothing purchases for social aid programs.
WTO Deal Ends US Cotton
Major subsidies to the US cotton export industry came to an end on August
1, fulfilling a promise made at World Trade Organization talks in December.
Support for US cotton growers was abolished in a new trade act signed by President George W Bush in February repealing the so-called Step 2
It means that US exporters and manufacturers will no longer receive an
incentive for buying higher-priced cotton from domestic farmers.
Brazil brought the case to the WTO, saying government help for American cotton farmers distorted the global market and gave US exporters an unfair
The system has been particularly damaging to cotton-producing nations in
West Africa, whose exports were hampered by depressed world prices.
Brazil is still considering the imposition of US$4bn in retaliatory duties
on the United States.
Burma Import Ban Renewed
On August 1, the US renewed import restrictions against the ruling military junta in Burma over ongoing concerns about human rights violations.
The import ban imposed in the Burmese Freedom and Democracy Act of 2003, had been set to expire at the end of July.
“Unfortunately, the ruling military junta in Burma has shown no willingness
to address the many problems that continue to make these sanctions
necessary,” commented American Apparel & Footwear Association president and
CEO Kevin M Burke.
He added calls for the world community to add its support by imposing
similar sanctions – particularly the United Nations’ Security Council and
the Association of South East Asian Nations.
5,000 Fake Goods Seized
Melbourne customs officers have seized a load of 5,000 fake designer items
bearing labels such as Gucci, Chanel and Hugo Boss.
Among the goods were about 1,000 pairs of jeans along with handbags,
wallets, perfume and watches.
The shipment was discovered at the Port of Melbourne and had traveled in sea freight from China, a country notorious for its trade in
SG Wicus Workers Riot
Thousands of workers from an SG Wicus textile factory have gone on the
rampage after the alleged confinement and beating of six women laborers.
The workers injured at least ten including the company's managing director and factory manager as they barricaded the building, which is in the Dhaka Export Processing Zone (DEPZ).
Officials from the Korean-owned company were accused of punishing the
female workers, claiming they had stolen BDT50,000 (US$723.59m) from a salary fund.
DEPZ and the factory's authority have denied the workers' claims.
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400 Jobs Saved
Almost 400 jobs have been saved at fabrics company Foss Manufacturing after
the 52-year-old firm recovered from bankruptcy.
Foss has gone from financial ruin to profitability in three months after
being bought by Alinian Capital Group on May 5, 2006.
The business had hit bankruptcy in September last year after poor
management and leadership caused its performance to suffer.
Alinian appointed AJ Nassar as the company's CEO, who went on to review costs and controls, concentrate on employee initiatives and morale and
repair customer and former customer relationships.
"Foss Manufacturing had not been performing to its potential and we took
steps to be more productive and profitable," said Nassar.
"Those steps have resulted in the retention of almost 400 jobs and 200 new
position offerings here at Foss. In addition, there has been a huge
collateral effect with direct and indirect suppliers in Hampton and
throughout the Northeast."
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