Blog: Leonie BarrieTrade tremours continue to reverberate

Leonie Barrie | 8 October 2018

Following more than a year of talks, the United States, Canada and Mexico have reached agreement on a renegotiated North American Free Trade Agreement (NAFTA) – which will be called the United States-Mexico-Canada Agreement (USMCA). The new deal has been largely welcomed by apparel industry executives in the three countries.

The announcement is the latest development since President Donald Trump took office in January 2017, and tops our updated timeline of the US’s key trade milestones.

But on the other side of the Atlantic, the European Commission has begun the process of withdrawing Cambodia's access to the duty-free Everything But Arms (EBA) preferential trade programme, and is considering the same for Myanmar over human rights violations in both countries.

The action comes as business law experts in Myanmar have separately welcomed the liberalising impact of the country's new Companies Law, which is expected to increase transparency and improve corporate governance in the garment sector.

From January next year responsibility for collecting payroll taxes will pass from China’s local social security bureau to local authorities, who have the capability and corporate tax data to ensure much better levels of compliance. The move could also mean higher short-term labour costs for Chinese factories.

There's a lot of talk about the potential benefits of developing a closed loop or circular economy as a long-term solution to the environmental impacts of the clothing industry and its supply chain – yet delivering real change is proving to be slow. An expert panel at the Fashion Summit (Hong Kong) 2018 discussed some of the challenges of closing the loop in the fashion industry, and potential solutions for moving from hype to action.

In the UK, the government is stepping in to look at how the fashion industry can reduce its social and environmental impact – with ten fashion retailers asked to submit evidence on the steps they are taking to make the industry more sustainable.

The concerns come as separate research shows apparel suppliers continue to bear the brunt of poor purchasing practices. According to first findings from the next Better Buying report, a majority of apparel buyers are not paying for samples – and one in ten never broaches the issue of factory conditions.

And a new global survey has highlighted an “unprecedented” skills crisis in the fashion industry, creating a 'war for talent' across the supply chain. It also suggests the industry is not only dissatisfied with the current training being provided, but that it is also failing to address the need for new competencies heading into the future.

In other news, former Shopko Stores president Jill Soltau will join JC Penney as its new CEO; VF Corp is to sell its Reef surfwear brand to The Rockport Group, and has launched a new online traceability tool for its ten most iconic products; and the expansion of the Central American Customs Union into a three-country bloc should help speed apparel trade.

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