Blog: Leonie BarrieTPP trade pact finally concluded

Leonie Barrie | 12 October 2015

After more than five years of negotiations, leaders of 12 Pacific Rim countries, including the US, Japan and Vietnam, have finally concluded negotiations on the Trans-Pacific Partnership (TPP). The move paves the way for what will be the world's largest free trade agreement, linking about 40% of the global economy.

While the full text of the TPP is still to be released, initial indications are that for textiles and apparel there will be specific rules of origin that require use of yarns and fabrics from the TPP nations, with a “short supply list” that allows use of certain yarns and fabrics not widely available in the region.

The deal also still needs to be ratified by the individual countries involved – a process that could take some time. Some estimates suggest the TPP could potentially go into force by late 2018 or early 2019, whereas others believe it is unlikely to take effect this decade.

Vietnam is expected to be one of the chief beneficiaries of the trade pact, and US apparel import data released last week confirms its continuing growth. Shipments from Vietnam grew 18.8% year-on-year in August, with strong gains also seen by China, Cambodia and Bangladesh.

Clothing workers in Cambodia are also set to benefit from a new minimum wage agreed from the beginning of next year. Set at US$140 per month – a 9.4% increase on the current wage of $128 – it is well below the $168 that unions had been seeking.

But hundreds of millions of children worldwide continue to be involved in child labour, with 18 countries named as using children in cotton production and nine in garment production,according to a new report.

As the world’s two largest fast fashion retailers, it’s no surprise that Inditex and H&M continue to outperform their peers with their market-leading supply chains – or that common themes unite all the top European supply chain leaders.

Offering opportunities for retailers to drive margin, differentiation and traceability, private label apparel is a growing category. But whereas last year all eyes were on cost as the key sourcing pressure, a new survey suggests a mix of issues has now come to the fore.

September proved to be another mixed month for US clothing retailers. While a later Labor Day weekend and the tail-end of back-to-school selling boosted sales for some, the holiday shift combined with unseasonably warm weather hampered others, leading to many chains posting comparable store sales declines.

The latest innovations in fibres and fabrics are driven by apparel industry demand for ecologically friendly solutions. Among the topics explored in this month’s management briefing are the latest in functional finishes, new outdoor wool and sportswear fabrics, and the challenges that persist in closed loop clothing.

Taking advantage of potential growth in e-textiles and smart garments is not without risk, according to a new report from just-style, and may also require a fundamental shift in core business practices.

And in other news, Gap Inc has revealed another decline in monthly comparable store sales and the departure of Banana Republic creative director Marissa Webb; Wal-Mart Stores has cut around 450 jobs at its head office; and Nike has launched a new fabric that adapts to changes inbody temperature.

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