2016 remained a mixed bag for many garment-making countries

2016 remained a mixed bag for many garment-making countries

2016 remained a mixed bag for many garment-making countries. While some saw higher exports along with improved labour rights and workplace conditions, others were burdened by political unrest, terrorism – and the surprise election of Donald Trump as the next US president.

WINNERS

Madagascar

Madagascar drew attention as an attractive sourcing hub and investment destination for predominantly private label production. Apparel exports from Madagascar to the US increased by a whopping 162% year-on-year to US$48.98m in 2015, almost doubling again in the first nine months of 2016 to reach US$90.16m. The island nation continues to benefit from trade preferences under the African Growth and Opportunity Act (AGOA).

Bangladesh 

Bangladesh overtook China this year as the world's biggest importer of cotton, according to data from the United States Department of Agriculture (USDA). A growth in spinning and production saw Bangladesh import 6.2m cotton bales in 2015-16, an increase of 500,00 bales year-on-year. The USDA expects this to increase by a further 400,000 bales this fiscal year. Demand for cotton originating from Uzbekistan was particularly strong, said analysts. China meanwhile nearly halved its cotton imports to 4.4m bales with imports forecast to hit 4.5m this year.

India

Indian garment exporters widely welcomed a series of long-overdue financial and labour reforms announced by the government in June, aimed at generating 10m jobs and boosting exports by $30bn over three years. The reforms will enable factories to take on temporary workers for core clothing manufacturing work, a right that was previously restricted to non-core tasks like security, cleaning, building maintenance, transport and loading/unloading. The cabinet also earmarked additional funding of US$880m for a duty drawback scheme, and increased subsidies provided to garment manufacturing units, under an amended Technology Upgradation Fund Scheme (TUFS).

Cambodia

There was a partial win for Cambodia's garment workers this year, as the Cambodian Labour Advisory Committee – comprising union, government and employer representatives – voted to increase the monthly minimum wage to US$153, effective from January 2017. Union officials, who had been pushing for a 30% increase to US$180, said the new wage was still a far cry from what was needed to cover the cost of living, while garment manufacturers complained the rise would see orders go to competitor countries with lower labour costs.

Myanmar

Myanmar's new democratic government, which took up office in March, is celebrating the country's reinstatement to the US's Generalised System of Preferences (GSP) programme after an absence of more than 25 years. While many categories of apparel are excluded from the GSP scheme, reinstatement is widely seen as endorsement of improving labour rights and workplace conditions. Apparel exports to the US from Myanmar increased by 160% last year. Since the EU removed sanctions in 2013, exports to the Euro bloc have also grown, reaching EUR423m (US$473m) in 2015.

LOSERS

Mexico

The election of Donald Trump as the next president of the United States could have a devastating effect on Mexico's apparel manufacturers, according to clothing industry trade association Canaive. Trump has claimed he not only wants to build a wall between the US and Mexico to stem illegal immigration, but that he also wants to rescind the NAFTA (North American Free Trade Agreement) and slap a 35% tariff on Mexican imports. Around US$1.6bn of Mexican exports could be at stake, according to the industry association.

Vietnam

Vietnam also faces uncertainty thanks to the election of Donald Trump. Many international brands have increased their footprint in the country in recent years, lured by the prospect of the Trans-Pacific Partnership (TPP), which was touted as a massive advantage for Vietnamese manufacturers. But Trump's promise to pull the US out of the TPP in his first week in office has tempered enthusiasm and investment plans. Analysts are now looking to the recently concluded Vietnam-EU (European Union) free trade agreement for more promising trade advantages.

Ethiopia

Political unrest in Ethiopia is causing concern for apparel manufacturers who have invested heavily in the country. Protests have been ongoing and at times violent: the Turkish-owned Saygin Dima textile mill, 35km from the capital, was attacked in October. After months of unrest the government declared a six-month state of emergency in the country that will last until April next year. Ethiopia has become popular in recent years with brands such as PVH Corp, Hennes & Mauritz (H&M), Asos and Calzedonia, but the recent unrest has raised doubts about long-term stability.

Turkey 

Turkey has struggled to manage the overwhelming overland refugee migration from the Middle East this year, with an estimated 3m Syrians crossing its borders. The ensuing unrest and political difficulties have disrupted supply chains to Europe, and BBC investigative programme Panorama revealed in October that vulnerable Syrian children are being employed in Turkish factories to sew clothes for European brands. Security sources in the country have also had to play down potential risks to textile and clothing firms following an attempted coup in July.

Bangladesh 

Bangladesh occupies a place in both the winners and losers this year, for although its garment industry continues to grow, terrorist attacks and labour rights issues have hampered progress for the apparel industry. The country was denied re-entry into the US Generalised System of Preferences (GSP) trade programme for a third year, with US officials citing lack of progress on labour rights as the fundamental reason. The announcement came as the country reeled from a July terrorist attack in the capital Dhaka: 28 people were killed, several of whom were foreigners connected to the country's garment industry.