Blog: Leonie BarrieThe implications of buyer purchasing practices

Leonie Barrie | 3 October 2017

New research has delved into one relatively underexplored aspect of global supply chains: how buyer purchasing practices impact wages and working conditions. Among the findings: 52% of textile and clothing suppliers are accepting orders below the cost of production; 29% of suppliers struggle to pay workers; and 40% of suppliers are likely to subcontract orders to other companies because of low order prices.

In Cambodia, tripartite talks that will set a new minimum wage limit for 2018 for the country's garment and textile sector opened last week, as Vietnam pay discussions are also moving ahead.

It has also emerged that Vietnam's textile and garment exports are expected to reach US$30.5bn in 2017, with the US market accounting for more than half.

There's no doubt the Trump administration has been very active on the trade front – but what exactly is its trade policy, what is it hoping to achieve, and what are the implications for the textile and apparel industry?

Ahead of the third round of discussions to renegotiate the North American Free Trade Agreement (NAFTA), ten business groups – representing companies from across the textile and apparel supply chain in Canada, the US, and Mexico – urged negotiators to preserve the pact’s Tariff Preference Levels (TPLs).

While despite the ongoing uncertainty over the UK's exit from the European Union (EU), fashion companies are being advised there are steps they can and should be taking to prepare for the impact Brexit may have on their businesses.

For US consumer goods and retail CEOs, speed-to-market has become the greatest strategic priority as they increase investment in key areas such as digital infrastructure in order to respond to disruption in their respective sectors.

Fashion retailer Hennes & Mauritz (H&M), meanwhile, has partnered with a global inspections group to develop a tool to help give apparel companies full visibility over their entire supply chains.

And the US Department of Labor has released a new app to help businesses reduce labour abuses in global supply chains – as a new report notes that 22 countries still use children in cotton and garment production.

A Brooklyn-based biotechnology startup is showcasing the first biofabricated leather materials that have been made in labs from living cells.

And apparel retailer Gap Inc is the latest to join the Cotton Leads programme to help meet its sustainability goals by using responsibly-produced cotton from Australia and the US.

Meanwhile, in other news, Nike reported flat sales and a decline in earnings during the first quarter; Levi Strauss has launched the first garment featuring Project Jacquard smart technology by Google; and Shandong Ruyi Group, the largest textile manufacturer in China, is to invest US$600m in a textile park in Nigeria.

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