Predictions about future legislation can change from one month to the next

Predictions about future legislation can change from one month to the next

Don't believe those New Year forecasts, warns Mike Flanagan, as he debunks a few stories about four issues that are likely to be important in garment sourcing for some time.

What's the Christmas/New Year ritual that really exasperates you? My electronic intray always overflows with commentators' warnings about the year ahead – and this year they were exceptionally misplaced.

On 1 January I read about:

A non-existent law

India's labour minister, said a note dated 24 December, was going to submit new laws to the country's Parliament by 23 December, increasing labour flexibility, curbing union abuses and increasing minimum wages.

Only he didn't. Parliament has now broken up till late February – and far from having the proposed new law to discuss when it returns, it seems the government hasn't even agreed on its details. Unions and management don't agree on much except that they don't like the government proposals; and there's little chance a law will get through until there's more national support.

Followed on 4 January by:

The non-existent trade deal

We read that the ASEAN Economic Community (AEC), "launched on 31 December" will "ease labour movement across Vietnam, Cambodia, Laos, Thailand, Myanmar, Malaysia, Singapore, Brunei, Indonesia and the Philippines."

It won't. The AEC will certainly improve coordination between the ten major SE Asian economies, but none has a programme for allowing free labour movement from the others. A few members this year plan to recognise technical qualifications in five skilled professions, but there's not even an agreed timetable for allowing garment workers to move freely between ASEAN members.

By the beginning of January, an AEC plan had removed most import duty between ASEAN states. But Vietnam, for example, still charges duty on many – seemingly randomly chosen – varieties of cotton fabric. There has recently been good progress in creating common Customs procedures throughout ASEAN – but there is no plan for eliminating Customs or immigration barriers between each of them.

Then I read:

Absurdly exaggerated likelihoods of new ethical compliance laws

A report on 23 December described a new "in-consideration US regulation, the Business Supply Chain Transparency on Trafficking and Slavery Act of 2015 (HR 3226), [which] proposes public companies with global receipts of more than $100 million disclose their efforts to prevent modern slavery in their supply chain."

Meanwhile, the same report described a "Devoir de Vigilance" [duty of care] bill "currently under discussion in the French Parliament," threatening France's largest corporations with fines up to EUR10 million for "personal injury, environmental damage, health risks and corruption" anywhere in their, or their subcontractors', supply chains.

The French Senate had actually thrown the duty of care bill out a month earlier. In the US, a Congresswoman had presented a Supply Chain Transparency Bill to the House of Representatives in April 2014, but it got nowhere. Law-predicting website Govtrak.us gives her revised bill – which still hasn't been debated –  a 3% chance of making it into law.

Neither proposal is definitively dead: but neither looks remotely likely to pass.

And throughout early January, I kept reading how:

New trade alliances are redefining the global trade map

Mostly because of the Trans-Pacific Partnership (TPP), which apparel trade supporters believe the US will ratify this year.

President Obama has repeated his determination to see it through Congress before he leaves office on 20 January 2017. But with the front-running Democrat and Republican Presidential candidates opposing it, no-one in Washington seriously believes it's going to happen before the November elections.

Miracles happen, and Obama's team might find a clever plan for pushing it through. The big problem, though, is that the TPP isn't the only thing Obama's committed to getting through in the next 12 months. He has promised to normalise relations with Cuba, for example, and tighten controls on firearms, and is facing immense Republican opposition to his promises on fighting climate change.   

These commitments – and his agenda on other tough issues – are likely to alienate as many voters and Congress members as they please, and a President about to leave office has few resources to throw at his pet projects. There really is no likelihood Obama can make the progress on all of them in 12 months, with limited power, that he's failed to make in the past seven years. In 2016, there will be no re-drawing of any trade maps.

Are these stories wrong?

All these four issues are likely to be important in garment sourcing for some time.

India and SE Asia could become real alternatives to China. But India needs to upgrade its infrastructure and change its laws, and SE Asia needs to make it easier to move goods and people between countries.

In the West, public opinion and governments are going to push for greater supply chain transparency, and US buyers will remain desperate to find a significant duty-free apparel source if the TPP never materialises.

But all four require controversial changes, and in most of the countries involved – like India, the US and France – public opinion on everything is changing so fast, most voters don't agree with the President or Prime Minster they voted in only a couple of years ago. Outside China, these things can't just happen by a dictator's decree.

When laws don't change the way, or at the speed, commentators want them to, those commentators blame politicians for weak leadership.  

But public opinion no longer wants to be led, so politicians have to be fluid. Predictions about future legislation that look fine one month are often quite wrong a few weeks later. On all these four issues, the predictions floating round in early January would have been reasonable a few months earlier. Now, though, they merely demonstrate their writers hadn't checked the past month's news.

Our problem isn't weak leadership: it's sloppy commentators' unrealism about electorates that don't do followership any more. No doubt I'll make a similar mistake sooner or later.

My suggested New Year Resolution? Mistrust all commentators – even me – and don't believe any of these predictions without checking them for yourselves.

Mike Flanagan is chief executive of Clothesource Sourcing Intelligence, a UK-based consultancy that provides the western apparel buying community with objective information on apparel production, trade, price competitiveness, and apparel producers in over 100 countries.