Blog: Leonie BarrieSpotlight on Central America sourcing

Leonie Barrie | 6 August 2018

A worsening political and social crisis in Nicaragua is having a spillover effect in Central America, where the spectre of rising violence in Guatemala and El Salvador is threatening to undermine apparel sourcing and investment in the region. Ironically, the deteriorating situation comes as the region is poised to benefit from the US's escalating trade war with China, observers say.

Meanwhile, Mexico's textile and apparel industry is forecasting a sharp rise in exports and jobs under the $7.5bn spending package proposed by President-elect Andres Lopez Manuel Obrador – despite ongoing uncertainty around the key North American Free Trade Agreement (NAFTA).

And while violent protests in Haiti last month spared the country's $550m apparel supply chain, industry executives are now monitoring the situation ahead of a new decision on minimum wages.

Apparel exports from Rwanda to the United States last week lost their duty-free benefits under the African Growth and Opportunity Act (AGOA) after the country refused to lift a policy that effectively bans imports of used clothing. Here, we offer some insights into world used clothing trade – and why it deserves more attention.

And in his latest move to try to persuade China to change its trade practices, President Trump is considering increasing additional duties from 10% to 25% on $200bn of imports from China.

As the US trade war steps up, Myanmar is hoping to benefit from a shift of business away from China – but growth is slowing due to added political risk from the persecution and abuse against Rohingya Muslims on the border with Bangladesh.

While future growth in Jordan's garment sector depends on quality job creation, sustainable and inclusive growth, and the need for more women in leadership positions, industry leaders have said.

American companies importing products including apparel, textiles and footwear have been warned they could face fines or even criminal charges if they inadvertently source goods from North Korea, or if North Korean workers are found anywhere in their supply chains.

And after the publication of the UK government's Brexit White Paper, Mike Flanagan is more convinced than ever that Britain is going to stay in a Single Market with the European Union – and that Brexit will exist in name only.

Shares in HanesBrands took a hit last week after the basic apparel maker said department store retailer Target Corporation will not renew the contract for an exclusive activewear line when it expires in 18 months time.

And Spanish fashion retailer Inditex, owner of the Zara brand, is to pilot an at-home pick-up service in China for recycling garments – and is on track to deploy RFID technology across all brands by 2020.

In other news, Marks & Spencer is using consumer-driven predictive analytics to make design, buying and pricing decisions; value clothing retailer Primark has topped the list of Hot 100 Retailers in the US; the US is also mulling the removal of Uzbek cotton from a forced labour list; and the future of UK department store retailer House of Fraser looks doubtful.

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