Blog: Leonie BarriePolitical actions spoil sourcing plans

Leonie Barrie | 21 December 2009

Two cases last week illustrate all too clearly how exporters’ best efforts can be so easily unravelled by political actions.

In the first, the European Commission made its long-awaited decision to temporarily suspend preferential trade terms for Sri Lanka because of its government’s poor human-rights record. The withdrawal of the GSP+ benefits, which have given apparel exports zero duty access to the EU since 2005, could mean exporters now have to pay tens of millions of euros in additional duties.

Madagascar, too, has been threatened with removal from the list of African Growth and Opportunity Act (AGOA) beneficiary countries after the US issued it with an ultimatum last week. The State Department objects to the overthrow of the country's democratically elected President earlier this year, and has outlined four steps the country needs to take if it is to retain its duty-free concessions.

The British government has also taken steps that will see the UK fashion sector lose its dedicated lobbying voice on skills issues, after deciding not to renew Skillfast-UK's licence when comes to an end next March. But the industry's representation on skills won't disappear altogether, since a deal is about to be signed that will see the fashion and textile firms join Skillset – currently the Sector Skills Council for creative media industries – from April. 

Better-than-expected second-quarter profits and an uptick in futures orders at Nike were, not surprisingly, overshadowed by one word: Tiger. The sportswear giant appears to be standing by golf star Tiger Woods despite his spectacular fall from grace, and is looking forward to the prospect of a brighter 2010 after worldwide futures orders, for delivery between December and April, rose 4% to $7bn.

Retailers on both sides of the Atlantic, meanwhile, are waiting with baited breath after a flurry of surveys suggest shoppers are postponing their holiday shopping until the last minute in the hope of securing a better bargain.

With just a few more shopping days left before Christmas, US researchers say consumers want 60% to 70% off in order to buy – and that they're prepared to wait until 24 December to get more items on sale. Data also points to a late spike in shopping in the UK, with consumers saying they intend to increase their spending on clothes and shoes – although globally these items won’t be topping any present lists this year.

The standoff between stores and shoppers dims prospects of ending the year with a retail comeback, although retailers are still hoping there's time to get into the festive spirit and ring up unexpected gains.


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