Blog: Trade agreements get a major shake-up in August
Leonie Barrie | 8 September 2015
A number of proposed trade agreements got a major shake-up in August. TPP negotiators failed to clinch a deal, the free trade pact between the EU and Vietnam still needs to be ratified, India pulled out of talks with the EU, and the Regional Comprehensive Economic Partnership (RCEP) hailed “historic” progress.
But perhaps the biggest casualty will be India’s plans to increase textile and clothing exports by 20% a year and create an extra 35m jobs by 2024.
just-style’s latest management briefing also picks up on those trade agreements with the most significant implications for the clothing and textile industry – including the Trans-Pacific Partnership (TPP), and the renewed African Growth and Opportunity Act (AGOA). It also looks at the impact of deals already in place with the US and EU and their trading partners.
The latest data shows apparel imports into the US continued on their upward trajectory in July, with all but one of the top ten supplier countries booking year-on-year growth. While Vietnam led with pack, posting a solid double-digit rise for a fifth consecutive month, strong gains were also recorded by China, Bangladesh and Cambodia.
However, Vietnam's textile and apparel industry is calling for a lower minimum wage to be set after a consensus was reached for a 12.4% increase to take effect from January 2016.
And thousands of workers took part in demonstrations across Indonesia calling for higher wages and improved labour laws.
Meanwhile, Myanmar has approved the country's first minimum wage for garment workers of MMK3,600 (US$3.2) per day, setting it at the level first proposed two months ago.
And Hennes and Mauritz (H&M) is scaling up its fair living wage efforts with plans to add all of its strategic suppliers by 2018 – and is updating its purchasing practices to support them.
Australian surfwear company Billabong says it is “making good progress” in its turnaround efforts after posting its first full year profit since 2011 – and has now set its sights on yet more savings from supply chain improvements.
A new study suggests EU textile and clothing buyers should brace for higher prices, after the average price of imports jumped by 14.2% during the first four months of 2015 – and is set to continue to rise in 2015 and 2016.
But US consumer spending was hampered by international concerns and volatile equity markets in August, with the majority of clothing retailers reporting comparable store sales declines for the month.
And while it seems US consumers are more restrained when it comes to back-to-school shopping for the second year in a row, new fashions and a shift in spending away from electronics are prompting industry analysts to be cautiously optimistic for clothing retailers.
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