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US Senators Look to Ban Imported Sweatshop Products
Page 1

TJX's Security Breach
Page 1

 Still No Agreement Between South Korea & US
Page 1

Bangladesh's Exports to US & EU Up 24%
Page 1

ILG to Cut 186 Workers
Page 2

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Page 3


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The American Red Cross

 February 1, 2007                                            Issue #186


13/24

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  US Senators Look to 
      Ban Imported
  Sweatshop Products
A group of US senators have introduced legislation to ban the sale in the US of imported goods made in sweatshop factories.
The legislation would not only mean a US$10,000 fine for violating the ban but would also give sellers of legitimately produced products the right to sue for damages from those who disobey the ban. 
"This bill is very simple," Senator Byron Dorgan said. "It would make it illegal to bring the product of sweatshop factories - factories where workers are abused in violation of that country’s labor laws - into this country."
He added: "There is no reason for the United States of America to allow the sale of products made in slave labor-like conditions.
"This bill would help put an end to it. It would also stand up for American producers and American workers and tell them they don’t have to compete against those who cut corners at the cost of human health, dignity and even human lives."
Dorgan claimed that ‘free-trade agreements’ between the US and other countries have contributed to a growth in sweatshop manufacturing.
He pointed to an example in Jordan, where after a free-trade deal was signed workers were allegedly forced to work 20-hour days, often were not paid for months and were physically abused and even jailed when they complained. 
One worker was reportedly paid only $50 for five months of work.
"It’s all part of a global strategy by some corporations to find the cheapest possible labor and to exploit free-trade agreements," Dorgan said. 
"The best way to put a stop to it is to simply prohibit the sale of products sold in sweatshops, and make sure there are powerful incentives to see that the prohibition is respected and enforced."


2/24  

Cambodia Concerned Over
  Vietnam's WTO Entry
Cambodia’s garment manufacturers have voiced concern that Vietnam’s entry into the World Trade Organization could be devastating to their own textile and garment sectors. 
Ken Loo, secretary general of the Garment Manufacturers Association of Cambodia, was cited as saying Vietnam's WTO entry would mean overall lower costs for Vietnam and a better competitive edge against Cambodia. 
Moreover, Loo is concerned that Cambodia cannot offer many different services to Vietnam, restricting its ability to fight to keep its market share.
Labor-intensive sectors such as garment manufacturing are expected to be some of the first beneficiaries of the accession. 


9/24   
  
Still No Agreement Between
    South Korea & US
South Korea and the US held their sixth round of Free Trade Agreement negotiations in Seoul, but failed to hammer out deals on key sectors such as textiles, autos and pharmaceuticals.
Even though the two countries discussed textiles in the deputy cabinet-level talks, negotiators failed to narrow differences over key textile issues such as tariffs.
South Korea has proposed removing textile tariffs over five years while the US insists on ten years.
South Korea wants the US to ease the so-called ‘yarn-forward’ rule of origin, which allows textile products with only domestically-produced yarns to be sold in the US market duty-free. 
Most South Korean textile products are made of cheap Chinese yarns.
South Korea has also called on the US to count items such as shoes and garments made in North Korea’s Gaesung industrial complex as South Korean products. 
Many South Korean companies are trying to move their production base to the North complex to take advantage of the country’s cheap labor cost.
The seventh round of FTA negotiations between the two countries will be held in the US this month.




11/12 

Bangladesh's Exports to 
    US & EU Up 24%
Bangladesh has enjoyed a 24% jump in ready-made clothing exports to the US and the EU during this fiscal year so far.
Garment exports reportedly brought in earnings totaling US$2.6m in the four-month period.
"Ready-made garment export earnings from the US market may cross $3bn this fiscal, if we can continue the growth," said Abdus Salam 
Murshedy, the immediate past VP of the Bangladesh Garment Manufacturers and Exporters Association.
According to Murshedy, competitive pricing has helped boost recent exports. 



6/24              Photographed by Scott Johnson
US & Mexico Sign Customs
          Agreement
A new customs cooperation agreement that should help the US and Mexican textile industries compete with Asian exports has been signed by the US Trade Representative Susan C Schwab and the Mexican Secretary of Economy Eduardo Sojo at the World Economic Forum in Davos, Switzerland.
The agreement is a first step to implementing the textile provision of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), and means apparel produced in Central America incorporating certain fabric and other inputs from Mexico will qualify for duty-free treatment when exported to the US under CAFTA-DR.
The 2004 CAFTA-DR trade deal between the US, the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua specified that the upgraded customs cooperation agreement was one of several pacts that would have to be completed before the provisions could be implemented.
The agreement has been praised by the Mexican textile industry, with the head of the country’s textile and apparel federation saying he is “very pleased” it has finally been concluded.
“It means that producers in Central America and the Dominican Republic will be able to use high quality Mexican fabrics in apparel destined for the US market,” said Rafael Zaga, Chairman of Camara Nacional de la Industria Textil, which represents more than 400 manufacturers of yarns, fabrics, and garments in Mexico. 
“It brings us all a step closer to realizing the full promise of CAFTA,” he added. 
Under the agreement signed on January 26, Mexican and US customs authorities will work together to ensure proper verification of claims for preferential treatment under CAFTA-DR for apparel that contain inputs from Mexico. 
The treaty covers the sharing of information and documents, procedures for production verification including through unannounced plant visits, and penalties in the event of inaccurate claims. 
The provision is subject to annual limits on the quantity of apparel that will receive preferential treatment and covers a limited set of products. 
For provision to be effective with Mexico, Mexico must also amend each of its free trade agreements with the Central American countries to provide preferential treatment of Central American apparel goods containing US inputs that are exported to Mexico. 
Once these amendments are reached and implemented in the domestic law of Mexico and the CAFTA-DR countries, the provisions of CAFTA-DR will enter into force with respect to Mexico.
This provision should benefit US companies with investments in Mexico and help to integrate production in the region as a counterbalance to Asian producers.
The United States and Mexico began negotiations in the autumn of 2005 on the customs cooperation agreement and concluded negotiations on the agreement on November 16, 2006. 
The fiber, textile, and apparel sector accounts for 6% of Mexico’s manufacturing GDP and employs more than 600,000 Mexicans. 

              
10/12
 

Pakistan Factory Fire
          Kills Five
At least five people have been killed in Karachi after part of a four-storey clothing factory’s roof caved in during a fire.
Three fire-fighters and two factory workers were said to be among those killed by the collapse, which also injured 19 people on January 15, in the southern Pakistani city, which is the capital of the Sindh province. 
The fire reportedly started on the second floor of the garment export firm’s warehouse. 
Despite an evacuation, people became trapped under rubble after the roof fell. 
Factory fires are a relatively common occurrence in South Asian countries such as Pakistan and Bangladesh. Electrical faults are often to blame. 


4/24

The Seamless Consortium
An industry education group has been formed to encourage the design, development, production and marketing of seamless garments and help meet the growing demand for these products.
The Seamless Consortium represents manufacturers, suppliers, marketers and retailers of seamless products and hopes to help them take advantage of the opportunity to provide consumers with higher margin products that they value and demand.
“When given a choice, consumers absolutely prefer the comfort, appearance, durability, performance benefits, and ease of care that seamless technology affords,” says Diane Donahue, president of Acme-McCrary Seamless Division and chair of the Consortium.
Seamless technology creates clothing free from irritating side seams and has already been adopted by performance apparel brands including Champion, Nike, and Under Armour. 
In addition to the continued growth of the technology in intimate apparel, seamless products have also expanded into activewear, swimwear and ready-to-wear garments. 
“When all is said and done, the seamless technology presents an opportunity across multiple segments of apparel,” explains Donahue. 
However, she also adds that while consumers have benefited from seamless products and recognized its advantages, the industry as a whole has been slow to fully capitalize on the technology. 


14/24
TJX's Security Breach
The TJX Companies, an off-price apparel retailer in the US, is working with law enforcement officials, computer security experts and credit providers to get to the bottom of “unauthorised intrusions” into information in its computers covering transactions in 2003 and 2006.
TJX said it discovered the breach in December and immediately notified the US Department of Justice, US Secret Service and Royal Canadian Mounted Police but, at the request of law enforcement, kept the information confidential until yesterday mid January.
TJX didn’t say how many of its customers or transactions may have been compromised. However, it said it had ascertained that records from its TJ Maxx, Marshalls, HomeGoods and AJ Wright stores in the US and Puerto Rico and its Winners and HomeSense stores in Canada had been hacked. 
It is possible that information about TK Maxx in the UK and Ireland may also have been illegally accessed, and that, during the 2006 intrusions, data about Bob’s Stores transactions may have been obtained. 
Ben Cammarata, chairman and acting chief executive officer of TJX, said: “Since discovering this crime, we have been working diligently to further protect our customers and strengthen the security of our computer systems, and we believe customers should feel safe shopping in our stores. 
“Our first concern is the potential impact of this crime on our customers, and we strongly recommend that they carefully review their credit card and debit card statements and other account information for unauthorized use.”
Since contacting law enforcement officials, TJX has engaged General Dynamics Corp and IBM Corp to monitor and evaluate the breach and upgrade security systems. Major credit card companies have been contacted and provided with all available information. 
When TJX has been able to ascertain specific transactions and customers affected, this information has been given to its customers. The company has established toll-free numbers in the US, Canada and the UK for customers seeking additional information.
TJX hasn’t yet been able to estimate the financial consequences of the breach but expects to do so when it releases its January 2007 sales.



 5/6
China Expects Increase 
15%+ of 2007 Textile Exports

Chinese textile exports will grow 15-20% in 2007, said Sun Jiwen, deputy director of the Foreign Trade Department of the Ministry of Commerce.
Despite this, an increase in raw material costs could be problematic for the industry, he was reported saying to the China Textile Round Table Forum in Beijing.
The industry reportedly exported goods totaling US$174bn during 2006, marking 25% growth from the year before. 
The stability of the world economy and domestic income are both helping the industry retain its strength, Sun said. 

 
                             
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