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December 15, 2007
Women's Wear Journal
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Senate Passes Peru TPA
The US Senate has passed the US/Peru Trade Promotion Agreement (TPA) by overwhelming majority, clearing the way for the final legislation to be signed and implemented by President Bush.
The trade pact, which was passed by a vote of 77 to 18, was previously negotiated by the Bush Administration and approved by the US House of Representatives in November.
It will eliminate duties on some 80% of US industrial exports, allowing US yarn and fabric makers to export their goods (under 'favorable' rule-of-origin rules) to Peruvian manufacturers who will then be able to sell apparel duty free to the US.
However, the American Apparel & Footwear Association (AAFA) points out that unless the legislation is implemented quickly, trade benefits are likely to be interrupted.
This is because the current Andean Trade Preference Act (ATPA) legislation expires on February 29, 2008 and, as it stands, there will be a gap before the new US/ Peru TPA comes into effect.
The APTA is a key trade initiative that allows Peru and other Andean nations duty-free access to the US market when US cotton, yarn and fabric inputs are used in the final product.
Representatives from the entire US textile and apparel supply chain - from cotton to consumer - are currently calling for an immediate renewal of the Andean Trade Preference Act.
"There will be a rude shock on March 1, 2008 if trade benefits are interrupted because Congress failed to pass an Andean renewal to bridge this gap," said AAFA president and CEO, Kevin Burke.
"We ultimately need permanent, comprehensive free trade agreements with countries in the region, like Peru, Panama and Colombia, to avoid this uncertainty."
The US is also negotiating FTA deals with Colombia, Panama and South Korea, but these pacts are unlikely to be agreed this year.
TJX Settles With Visa
The TJX Companies has agreed to a $40.9m settlement with Visa USA Inc and Visa Inc following an
unauthorized computer intrusion incident last year when millions of customer records were stolen by hackers.
Under the agreement, TJX will fund recovery payments to US Visa card issuers that may have been affected by the security breach.
TJX has agreed to fund up to a maximum of $40.9m pre-tax in alternative recovery payments.
The settlement is conditional on acceptance by December 19, 2007 by issuers of at least 80% of the eligible Visa payment card accounts.
Carol Meyrowitz, president and CEO of The TJX Companies, said: "We believe this settlement agreement provides a fair resolution of these issues, and look forward to a high issuer acceptance of the proposal.
"At TJX, we have learned a great deal about the risks of cyber attacks and have responded aggressively to take our own security to even higher levels.
"We also have learned about the heightened security risks that exist across the entire US retail and banking industries as a result of today's high tech criminals.
"We believe that cooperative action is required by all banks, payment card companies and merchants to better protect customer payment card data, and we look forward to working together with Visa to further this goal."
Once the settlement is completed, accepting issuers will be paid by December 27, the company said.
The TJX Companies first disclosed in mid-January that at least 45.7m of its customer records were stolen from databases in 2005 and 2006.
Customer data was thought to be at risk from its TJ Maxx, Marshalls, HomeGoods and AJ Wright divisions in the US and Puerto Rico, from its Winners and HomeSense chains in Canada and from its TK Maxx operation in the UK and Ireland.
Vietnam's Labor Issues
Having entered the world's top ten garment exporters, the Vietnamese textile industry is now facing mounting
labor issues, warned Le Quoc An, chairman of Vietnam Textile and Apparel Association.
An said that that Vietnam would surrender its competitive edge if labor costs continue to rise.
"At present, the labor cost in Vietnam is US$0.3-0.6 per hour and that is similar to other surrounding countries and competitors like China, Indonesia, Bangladesh and Cambodia etc. But we have been facing an annual 15% increasing in
labor cost," An said.
Additionally, Vietnam's textile and apparel industry has been subjected to more and more strikes at both domestic- and foreign-owned plants, notably Nike footwear supplier Tae Kwang Vina at the end of November.
Vietnam's textile and apparel exports are forecast to reach $9.5bn for 2008, up by 21.8%. However, such targets will be challenged by sharp growth of China, Bangladesh, India and Cambodia, added An.
by Lawrence O. Brown
EU's Chinese Imports
EU trade commissioner Peter Mandelson has promised to take action if there is a sudden upsurge in textile imports from China when clothing safeguard quotas are lifted on January 1, 2008.
His comments came during a debate on the future of Europe's textile industry on December 13, in which EU lawmakers and officials called on the Commission to study import trends in the first quarter 2008 and stop the market being swamped by cheap Chinese clothes.
Their concerns follow a decision by the European Commission in early October to lift existing temporary quotas on a range of imports from China - but to monitor incoming shipments for one year from January 1, 2008.
The monitoring measure does not limit how much China can export, but relies instead on a "joint import surveillance" scheme to track Chinese export licenses and European export permits in eight categories - T-shirts, pullovers, men's trousers, blouses, dresses, bras, bed linen and flax yarn.
However, while Europe hopes China will ensure the transition is as smooth as possible, Mandelson said: "In face of a sudden upsurge in Chinese textiles, the Commission stands ready to use all of [the] instruments at its disposal."
MEPs believe the double-checking surveillance system will be of little use unless it prevents the surge in imports from China to the EU that took place following the lifting of international quotas in 2005.
They also want new safeguard measures need to be enforced, covering product categories specified by Member States.
New trade barriers to slow textile and clothing imports include safeguard or anti-dumping measures if there is evidence of damage to the EU industry.
M&S Sells Swimwear in
Marks & Spencer is to sell its Per Una swimwear in January for the first time to meet demand from customers heading off to warmer climates on winter vacations.
The company, which unveiled its spring 2008 bikini and swimwear collection earlier this week, will launch the range on the M&S website in January.
Per Una is a women's fashion collection, created by designer George Davies and sold exclusively in M&S stores.
Factory Workers Still
One year after exposing what it described as "sweatshop" conditions in factories producing clothes for leading UK retailers, the charity War on Want claims workers in Bangladesh are still paid just GBP0.05 an hour for an 80-hour week.
Simon McRae, War on Want senior campaigns officer, said: "It is a scandal that Primark, Tesco and Asda have failed to tackle the poor wages and conditions of Bangladeshis making their clothes.
Khorshed Alam, a researcher who interviewed employees for the Fashion Victims report, said: "I have kept in touch with workers from the Bangladeshi factories. Their pay and conditions have not improved."
The report, published in December 2006, was based on research among workers in six unnamed factories in Bangladesh's capital Dhaka. The factories had a combined payroll of more than 5,000 and most of the employees were women.
Another War on Want report, Let's Clean Up Fashion calculated the GBP1.2bn dividend for Sir Philip Green, who owns UK retailer Topshop, was enough to double the salaries of Cambodia's whole garment workforce for eight years.
War on Want is now calling on the UK government to "step in and tackle this exploitation once and for all."
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