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Articles Of Interest

CAFTA-DR Approved by Senate
Page 1

Flooding Hurts Surat's Industry
Page 1

WTO eal Ends US Cotton Subsidies
Page 1

Burma Import Ban Renewed
Page 1

Ethical Clothing Gaining 
Interest in UK
Page 2

Moss Named Best Dressed
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Cost of a Spelling Error
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July Retailers' Sales Review
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The American Red Cross

August 15, 2006                                                 Issue #175


2/24

             McPete -Sez, 
    
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CAFTA-DR Approved 
         by Senate
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 victory.”
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 countries.
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 
implementation.
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 
CAFTA-DR region. 
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 year. 
US fabric exports to the CAFTA-DR region declined 13.1% in the first five months of 2006 from the same period in 2005.


15/24  

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.



22/24   
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 anti-union stance. 
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 affiliated with. 
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. 

               

12/12 
Venezuela's Textile Industry   
                 Hurting

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.


19/24   
WTO Deal Ends US Cotton 
           Subsidies
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 
program.
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 advantage. 
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.

              
11/12
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. 
                   

17/24
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 counterfeit 
fashion items.


3/24
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.

                    Reps Wanted
Lingerie distributor looking for US independent 
sales representatives for about 300 items. Contact 
Michael at (909)468-2705
www.sensualmystique.com

1/6
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." 

 
                             
( End of Page 1 of 5)