INTERNATIONAL
Helped by the government's special package and marketing plans, India's textiles and apparel exports are expected to touch $50 billion mark this fiscal from $38 billion in FY16, a senior official said. The Union Cabinet last week approved a Rs 6,000-crore package for the sector with an aim to create one crore new jobs in three years and attract investments of $11 billion while eyeing additional $30 billion in exports. "The government has announced a special package and taking elaborate marketing plans to boost exports. We are hopeful of achieving $50 billion in exports in the current fiscal as compared to $38 billion exports last year," Textile Secretary Rashmi Verma told reporters on the sidelines of a meeting of industry body Texprocil. "We are hopeful that our key markets like Europe and US will continue to grow. We are also looking at exploring new markets such as Iran, Russia and South America to expand reach and diversify products. With the opening of new markets, we are hopeful to achieve our export targets." She said the country is ready to capitalise on falling share of China in textile exports in the international market. The nation's market share has slipped to 38 per cent from 40 per cent due to high wage rate and its entry into high-end tech products.
Commenting on Britain's exit from the EU, Verma said, "We export $10 billion worth of textiles and apparels to European Union of which nearly 23 per cent ($2.5 billion) goes to Britain." "Now we are focusing on entering into PTA (preferential trade agreement) with Britain and it is right time to negotiate its terms." The draft of new textile policy is ready and the package announced last week was a part of it. The policy will go to the Cabinet next month for approval, she added. Meanwhile, The Cotton Textiles Export Promotion Council (Texprocil) today released an Ernst & Young report titled 'Textile industry as a vehicle of job creation for inclusive growth'. Texprocil Chairman R K Dalmia said it is important to finalise FTAs (free trade agreements) with EU, Australia and Canada in addition to negotiating concessional tariff with China to protect domestic suppliers. The report highlighted the employment potential of the textile sector, especially in rural India. The labour- intensive home textiles segment suffers from tariff disadvantages of 9.6 to 16 per cent in markets like EU and Canada.
SOURCE: The Economic Times
The new textiles policy could be taken up by the Cabinet within a month, is the word coming in from Textiles Secretary Rashmi Verma. Speaking to CNBC-TV18'S Priya Sheth from the sidelines of HGH India 2016, outlining the contours of the new policy, she says the government has recommended duty rationalization on man-made fibres. The government in June approved a special package for employment generation & promotion of exports in Textile & Apparel sector. The new policy aims to provide incentives to the sector and aid job creation, manufacturing and exports. The focus areas of the policy are value addition down the value chain from fibre to garmenting, increase in production at every stage from fabric to processing to garmenting, says Verma. There will also be a focus on investment in technical textile sector in India, she adds. Draft of new textile policy is ready and the new package which was announced last week was also a part of it. The policy will go to the Cabinet next month. Below is the transcript of Rashmi Verma’s interview to Reema Tendulkar Priya Sheth on CNBC-
TV18. Q: What do you hope to achieve with this new special package in place?
A: The idea being that we give a boost to the sector because looking at the immense employment potential in this sector and with very little investment, you can create a lot of jobs here. So, the idea is to create at least one crore jobs in the next three years and also give a boost to the export. We are expecting that the additional export will be there by USD 30 billion. And we also hope to attract about Rs 74,000 crore in terms of investment in this garmenting sector. So, if we look at the entire value chain, this package will go a long way in doing value addition, encouraging value addition within the country. So, we are moving towards Make in India.
Q: This USD 30 billion additional exports that you spoke about, can we expect to reach such a target because considering the global scenario, we are seeing a sort of slowdown in the overall textile space globally.
A: Yes, in fact, there has been a slowdown, but fortunately, even if you look at the exports last year, although there was a negative growth in all the sectors, textiles managed marginal positive growth and we are hopeful that even markets like Europe and US which are our key markets, we will continue to grow. We are also looking at new markets and we are looking to diversifying our market products also and our markets also. So, we are looking at South America, Russia is another area where we are focusing. So, with the opening of new markets, we are hopeful that we will be able to achieve our targets.
Q: The next thing that market is keenly watching out for is the new textile policy. Can you give us a timeline as to when we can expect this because there has been some expectation that it will possibly be released over the next week or so?
A: Not so soon. But the draft is ready. And this special package which we have announced was also part of the textile policy, but we thought that this we will announce, go ahead and get approved immediately. But the rest of it, the remaining part of it is also ready. We have circulated the draft asking for comments on different ministries and we are very hopeful that within a month, we will be taking it to Cabinet.
Q: But what would be the key focus areas of this policy? Can you run us through that please?
A: Focus is of course, value addition down the value chain. Textile what we find is that when we look at the entire value chain, it starts tapering from fibre to garmenting when we look, then the value addition at every stage goes on decreasing. So, the whole focus of this textile policy is to balance the value chain and increasing production at every stage, from fabric to processing to garmenting. So, we are focusing on balancing the value chain and giving a boost to the exports also, attracting a lot of investment. Our focus is also on technical textiles, that is a sunrise sector, so we are also taking special initiatives to promote the technical textile sector in India.
Q: Can we expect some duty cuts as far as manmade fibres are concerned? A: Yes, the textiles policy also focuses a lot on the manmade fibre and we are recommending that the duty on manmade fibres should be rationalised and we are hopeful that it will be accepted by government. Q: How much rationalisation has been suggested and what is the anticipation from the government?
A: You will have to wait for the textile policy to be out.
SOURCE: The MoneyControl
With the Textiles Minister Rashmi Verma today telling CNBC-TV18 that the Cabinet may take up the new textile policy within a month, Sanjay Lalbhai, CMD, Arvind said the policy is likely to increase competitiveness in the market. Moreover, he said with the 7th Pay Commission coming through and the likelihood of goods and services tax (GST) being passed in Parliament monsoon session, the consumer sentiment will improve significantly. The upcoming festival season could be a totally different picture in terms of sales. Historically, too, the Q2 and Q3 have been better than Q1 for the company, said Lalbhai in an interview to CNBC-TV18. The company currently is seeing a consistent growth of 20-25 percent but it would be a bit too early to comment on the future growth trajector, he added. He said all their retail formats (Aeropostale, Sephora, GAP etc) are going as per plans and the company is also focused on opening new stores. At the store level, profitability is good, like-to-like growth is healthy, too, he added. Going forward, the company would focus on garments, he said.
Below is the transcript of Sanjay Lalbhai’s interview to Mangalam Maloo and Reema Tendulkar on CNBC-TV18.
Mangalam: A couple of weeks ago, we got the new policy. How does that help the company? How much of your revenue comes from government exports and what kind of benefits can you see on the back of duty drawback on the states?
A: We are at around Rs 800 crore and we are growing very rapidly. So, with the kind of package which should have much more competitiveness compared to China and the Bangladesh which is eroding our market share, we should become competitive because it is not only the kind of duty drawback and refunding taxes which we are paying, but it is also a flexible labour policy.
Reema: Let me come in on the Seventh Pay Commission which was announced by the Cabinet. The monsoon is playing out well so far. Does this mean that demand for the company can improve in FY17? What should we expect?
A: As we all know that the consumption story was going through a little bit of a troubled times in India because there is not enough money in the hands of the consumer. So, this will go along way. A good monsoon, the pay commission now followed by the public sector units also rolling out the Seventh Pay Commission or the states rolling out the Seventh Pay Commission. So, there is going to be a substantial amount of money in the hands of consumers. And if goods and services tax (GST) is also to get ratified in the Rajya Sabha monsoon session, the sentiments will be all-time good. So we are really looking at a completely a different festival season, the next Diwali or the upcoming diwali.
Mangalam: Could you give a number to that optimism? How has Q1 fared so far? What is your outlook for Q2, Q3 which have Diwali that you just spoke about?
A: For me, second guessing as to how the demand, what kind of spurt and how much it will result into our topline, but usually, the second quarter and third quarters are much ahead of the first quarter because that is the slowest quarter as far as brands and retail is concerned. And we are growing at anywhere between 20 and 25 percent year in, year out. So, I do not know whether we will improve on that and there would be a huge spurt, it is very difficult to put a number there. All that I am saying is that for the first time, the consumer sentiment would be very positive.
Reema: If you could just give us the return on capital employed (ROCE) and the revenue outlook for the brands Gap, Sephora and Aeropostale?
A: I could only tell you that all these retail formats are going as per plan. We are opening many new stores. At the store level, the profitability is very healthy. The like to like growth is also healthy. So all of them have to reach a critical size to start giving us ROCEs and very good return on capital deployed. That is all planned out and in many of the analysts meetings, we have shared what kind of expectations which we have, but for me to give you all these numbers would be quite a difficult proposition.
Mangalam: We just had a conversation with Textile Secretary, who said that the government policy which has been announced last week and there is a new textile policy which is likely to be announced next week as well or rather next month. What are your key expectations from there?
A: The kind of things which we have been asking about is the similar kind of, the state taxes still not refunded, so we would very much wish that there is thought given to that. Labour flexibility which has been provided at the garment stage, if it can be provided for the entire value chain, it will be very encouraging. So, these kind of inputs would go a long way in making the entire value chain much more competitive than what it is today.
SOURCE: The MoneyControl
Members of the Haryana Chamber of Commerce and Industry, Panipat chapter, and the Handloom Exports Manufacturers’ Association (HEMA) have decided to boycott China for not supporting India’s entry to NSG. The exporters also decided to boycott the international summit on textile named “ITMA ASIA + CITME 2016” to be held in Shanghai in October. With an annual turnover of Rs 30,500 crore per annum in domestic and international markets of textile industry, Panipat has become a textile hub. “We are also getting consent from the state body to boycott China for business deals also,” said Pritam Singh Sachdeva, chairman, HCCI, Panipat chapter. “This is the mega show of all nine European Textile Machinery Associations, China Textile Machinery Association and Japan Textile Machinery Association ,” said Ramesh Verma, president, HEMA, Panipat. “Around 1,200 members are associated with the HEMA and they have decided to boycott China for not supporting our country in NSG. Our country is a major competitor of China in textile industry and they have decided to boycott the international summit,” he added.
SOURCE: The Tribune India
Indicating an improvement in industrial activity, the Nikkei India Manufacturing Purchasing Managers’ Index (PMI) jumped to a three-month high of 51.7 in June, against 50.7 in May. “The main contributing factors to the upward movement in the PMI were stronger rates of growth in new orders and output, both of which reached three-month highs in June,” said a Nikkei statement on Friday. A reading above 50 indicates expansion while one below means contraction. “Indian factories registered a welcome upturn in growth of both production and new orders mid-way through 2016, but producers clearly remain stuck in a low gear,” said Pollyanna De Lima, Economist at Markit and author of the report. However, Lima warned that the rate of expansion remained weak: the PMI average for the April-June quarter was lower than the figure for the prior quarter, signalling a softer contribution from manufacturing to the overall GDP. Among sectors, consumer goods performed the best in June. Incoming new work orders rose, although new export orders increased in June. The rate of inflation eased to the slowest since March, and was moderate overall. “This lack of inflationary pressure provides the Reserve Bank of India with further leeway to boost economic growth through cutting its benchmark rate,” Lima said. The RBI’s next policy review is on August 9. In the last review, RBI Governor Raghuram Rajan had cited inflationary pressures for maintaining the status quo on rates.
SOURCE: The Hindu Business Line
India and Cyprus have agreed to rework their tax treaty, bringing in a source-based taxation of capital gains on share sale that will allow India to tax such profits in the country. The development comes as a big success for India, after it managed to similarly rework its tax treaty with Mauritius. The new regime, which will give India the right to tax profits made on sale of shares in the country, will kick in from April 1, 2017. Investments made before that will be 'grandfathered', treated as per the current treaty terms. "It was agreed to provide for source based taxation of capital gains on transfer of shares. However, a grandfathering clause would be provided for investments made prior to 1.4.2017, in respect of which capital gains would be taxed in the country of which taxpayer is a resident," the government said in a statement. The finance ministry will seek cabinet approval for the new Double Taxation Avoidance Agreement before signing the treaty. The agreement was reached at an official level meeting between India and Cyprus in Delhi earlier this week. "The development on the India-Cyprus tax treaty is another welcome step towards providing certainty in tax. The intent to grandfather existing investments, which is in line with a similar change proposed in the treaty with Mauritius, should provide comfort to investors," said Gautam Mehra, leader-tax at PwC India.
India is in the process of reworking its tax treaties with other countries that had allowed investors to escape tax on investments routed through these countries. This has led to allegations of "round tripping", or Indian money going out to countries such as Mauritius and Cyprus to be invested in India to avoid capital gains tax. Mauritius is the biggest source of foreign direct investment in India, most of it third country money routed to take advantage of the tax treaty, which has now been reworked to provide for sourcebased taxation. Cyprus is the eighth biggest investor in India. In 2015-16 $508 million FDI came via Cyprus. India will also rescind the notification of Cyprus under section 94A of Income-tax Act, 1961 with effect from November 1, 2013. Through this notification, India had declared Cyprus a non-cooperative jurisdiction or a notified jurisdiction area (NJA) in India retrospectively from November 1, 2013 after it refused to provide information sought by tax authorities under the exchange of information provisions of the bilateral agreement of 1994. This tag meant a 30% withholding tax on all payments made to Cyprus and additional disclosure by Indian entities receiving funds from there including revealing the source of funds. On Thursday, Cyprus' finance ministry had issued a statement saying that India and Cyprus had "successfully" completed negotiations on the bilateral tax treaty in Delhi on June 29. "The amendment to the India-Cyprus tax treaty to the effect that India will have the right to tax capital gains earned by a Cyprus resident on sale of shares of an Indian company is on expected lines, especially after the recent announcement of a similar amendment made in the India-Mauritius tax treaty," said Pranav Sayta, tax partner at EY India. India had in May signed a revised tax treaty with Mauritius, which also provides for sourcebased taxation and capital gains.
SOURCE: The Economic Times
With Britain deciding to exit the European Union, there is a lot of "merit" in negotiating a separate free trade agreement with the UK, CII President Naushad Forbes said. "Now, we could do a probably very quick and easy free trade agreement (FTA) with the UK because our interests are very complementary, and the sectors which were considered sensitive (in India-EU FTA negotiations) are not sensitive in India-UK trade," he said. There are lot of export opportunities for Indian companies in sectors including garments and textiles in Britain, he added. "So, there is a lot of merit in India-UK FTA. It could probably happen faster than the India-EU free trade agreement," he said. However, India should also pursue the ongoing negotiations for a comprehensive free trade pact with the EU as it is in the country's interest, he added.
Launched in June 2007, the negotiations for the proposed Broad-based Trade and Investment Agreement (BTIA) between India and the EU have seen many hurdles with both sides having major differences on crucial issues like intellectual property rights, duty cut in automobile and spirits, and liberal visa regime. When asked whether Brexit has raised questions over India-EU FTA, Forbes said: "It has raised questions in a rather interesting way, which is that, we may end up with an Indo-UK FTA faster." Before starting formal negotiations for a free trade agreement, two trading partners normally carry out a feasibility study. The bilateral trade between the two countries stood at USD 14 billion in 2015-16, down from USD 14.33 billion in the previous fiscal. The UK is also the third largest investor in India. The country has received USD 23.10 billion foreign direct investments from the UK during April 2000 and March 2016. It is 8 per cent of India's total FDI during this period.
SOURCE: The Economic Times
The United Kingdom’s shock vote to leave the European Union has roiled global markets and raised deep economic and political questions about the future of globalisation. What are the lessons for India?
First, sometimes it helps to be somewhat peripheral, in times of turmoil. Just as in the case of the global financial crisis of the previous decade, India’s markets have suffered a relatively small blip, and the short-term impact on the economy may be negligible. But India is globally connected, and a further slowdown in global growth, as Europe and the United States struggle with the uncertainty and transition costs of Brexit mean that overall, India’s economic growth will face further global headwinds, making internal reforms even more urgent.
Second, the Brexit vote confirms the problems of Europe, not just its slow growth, but also its difficulties dealing with increasing economic inequality and social and ethnic diversity. This reinforces the need for a strong “Look East” economic policy for India. Of course, Europe is still wealthy, and will remain an important source of technology and potential buyer of whatever India can figure out how to make, but India’s future rapid growth has to involve greater economic integration with Pacific Asia.
Third, the outcome of the UK referendum highlights the importance of inclusive growth, which is more challenging to achieve in the current global environment than ever before. Citizens in rural areas, in depressed post-industrial areas, older people, and less educated people voted to leave, whereas the young, those with higher incomes and education, and those in more prosperous parts of the UK wanted to remain, on balance. Scotland voted to stay, but that reflects its subordinate status in the UK, which is mitigated by EU membership, and it may well now choose to leave the UK itself, reversing an earlier referendum that rejected independence. The border regions of Northern Ireland also voted to stay in the EU, a reminder of Ireland’s own complex history of divisions. For India, inclusive growth has to remain a priority, but the problems of the UK highlight the difficult challenge of preparing a workforce for the new century, even in a rich, well-educated nation, let alone one in India’s situation.
Fourth, dealing with ethnic diversity is as important as economic inclusiveness. The Brexit vote seemed to reverse much of the progress that the UK has made in recent decades toward becoming a multicultural and plural society. This process was neither smooth nor perfect, with many underlying tensions and issues remaining, but the vote to leave the EU has legitimised open expressions of xenophobia and racism. The US is facing the same problem with immigrants, thanks to the rhetoric of the Republican Party, of which Donald Trump only represents the most forthright expression. India doesn’t seem to need foreigners to exacerbate social tensions associated with diversity and pluralism in areas such as religion and ethnicity. Ironically, even members of the elite, such as South Indian Brahmins, can be labelled as foreign. The current government seems to keep playing with fire in this dimension, whereas India needs to opposite approach to grow rapidly, welcoming diversity and positive new influences and ideas.
Fifth, leadership matters. David Cameron made an opportunistic, if not cynical pledge to hold the referendum, to appease the right-wing of his party in the face of pressure from proto-fascists and nativists in the UK Independence Party (UKIP). He certainly did not expect this result. Surely, he has to be ranked as one of the worst British leaders ever. He also gave a platform to the UKIP leader, Nigel Farage, elevating him above previous British politicians of his ilk who have flourished from time to time in the UK. The quality of Farage’s own leadership is abysmal, including blatant falsehoods during the Brexit campaign, but the referendum gave him the spotlight and an undeserved political victory. The former mayor of London, Boris Johnson, and the Labour Party leader, Jeremy Corbyn, round out a quartet of incompetent and self-serving political leaders that have damaged their country. India has had leadership of varied quality over the decades, but clearly it is going to need high quality political leadership going forward, and not just one person.
Brexit was the outcome of a complex set of circumstances: major economic trends of technological change, a wave of globalisation that hit the wall of a severe financial and economic crisis, political instability in another region that was triggered by flawed US policy and spilled its human impacts across Europe, and myopic domestic political manoeuvring. The outcome is not economically disastrous—shooting oneself in the foot rather than in the head, but the political implications, if those who want narrow nationalism and fear diversity and pluralism have their way, could be much more severe. All of that gives India’s leaders and citizens much to reflect upon.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 47.24 per barrel (bbl) on 30.06.2016. This was higher than the price of US$ 46.80 per bbl on previous publishing day of 29.06.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3194.18 per bbl on 30.06.2016 as compared to Rs. 3170.21 per bbl on 29.06.2016. Rupee closed stronger at Rs. 67.62 per US$ on 30.06.2016 as against Rs. 67.74 per US$ on 29.06.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 30, 2016 (Previous trading day i.e. 29.06.2016) |
Pricing Fortnight for 01.07.2016 (June 14, 2016 to June 28, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
47.24 (46.80) |
46.34 |
|
(Rs/bbl |
3194.18 (3170.21) |
3127.02 |
|
|
Exchange Rate |
(Rs/$) |
67.62 (67.74) |
67.48 |
SOURCE: PIB
The Federal Government on Friday reaffirmed its commitment to revive the lost glory of the country’s Cotton, Textile and Garment industry for sustainable economic development. Mrs Aisha Abubakar, the Minister of State for Industry, Trade and Investment said this at the Textile and Garment Manufacturing Conference organised by Africa Fashion Week Nigeria (AFWN) 2016 in Lagos. Abubakar said that the government was passionate about promoting growth in the industry and across its value chain. The minister said that the government would continue to create an enabling environment to promote the ease of doing business and active participation of the private sector to boost production. According to her, SMEDAN and BOI have been repositioned to implement NEDEP goals to boost SME development in the country. She stressed that government initiatives toward stimulating growth in the industry included tax incentives, harmonised tax, infrastructural development and financing. Abubakar said that the government was looking at creating production hub for Cotton industry and Information, Communication and Technology (ICT) sector. She said: “Nurtured MSMEs can contribute to GDP, job creation and wealth for the citizens. “We urge all stakeholders to contribute to economic growth by giving their best so that we can have a Nigeria that we can all be proud of.” Mr Abiodun Akinkunmi, the Commissioner for Finance, Lagos State said that textile and garment industry had a strategic role to play in economic development. He said, “Africa is behind in terms of industrialisation because it has become over supplied with garments from China and used clothes from Europe and U.S. sold at give away prices.’’ “The low prices rather than boost the African market kills our cultural heritage. Our love for foreign clothes is destroying our economy.” He urged local manufacturers to improve the standards and quality of their products in order to discourage the dumping of foreign textiles and garments in the country.
Akinkunmi also urged manufacturers to encourage the use of local materials like adire, aso oke, animal skin, ankara as major designs that must not go into extinct in order to boost the country’s GDP. He urged the Federal Government to exploit opportunities inherent in the African Growth Opportunities Act (AGOA) to boost the revenue of the non-oil sector. Prince Dapo Adelegan, the President, Nigerian-British Chamber of Commerce (NBCC) said that increased investment was key to developing the textile and garment industry. Mr Joseph Babatunde, the Head, Large Enterprises, Bank of Industry, said that the BOI believed in the potential of the African textile industry hence it floated the N1 billion fashion industry fund. He urged fashion entrepreneurs to exploit the opportunity of the finance to promote the growth of the industry. “We need effective utilisation of the fund so that we can make the industry better. “Sam and Sara, United Textile Ltd. (UNTL) are some of the projects that the bank has supported and they are performing well in the industry,” Babatunde said. He urged the Federal Government to evolve more strategies that would expand and promote the textile industry.
SOURCE: The Daily Post
Tanzania government will give privatized industries which are not functioning to serious potential investors. The National Assembly are also making a survey to know if the privatized industries are honouring the contracts awarded when give the factories, failure of which the government will give them to other potential investors, said Mr. Charles Mwijage, the Minister for Industries, Trade and Investment. Those who have decided to change their use must be prepared to hand them back to the government so that other investors take them for improved productivity, said the minister. The measures taken by the government is to revamp the privatized industries which are not functioning thus denying people access to employment as well as markets for their agricultural products. Minister Mwijage said that his ministry, in collaboration with that of Agriculture, Livestock and Fisheries through the Supporting Indian Trade and Investment for Africa (SITA) is mobilizing investment in the processing and manufacturing industries set up in the areas of textile and other sectors. Mr Mwijage cited the example of Tabotex in Tabora region which stopped production in 2015 due to market challenges. The factory, which was privatized to Noble Azania Investment Limited and Rajani Industries in 2004 and was producing threads had to stop production last year after its major buyers of weaving and textile industries started their own division for the production of the materials.
For the time being, the government is reviewing and making an analysis to see if the industry can extend its activities to weaving and finishing of textiles so that they can be able to compete in the market and at the end of the day survive. Moreover, some of the textile industries which have been accused of selling the industries’ machinery for their own good, it has turned out to be the opposite since investigation shows that the old ones were replaced with the state of the art machinery for improved production. Mr Mwijage said that there are industries whose machines were set in the 1960s. After privatization, the investors had to come up with new innovations which in some cases have increased productivity.
SOURCE: Yarns&Fibers
Cecilia Malmstrom, trade commissioner of the European Commission, the executive body of the EU, in a speech at the Atlantic Council here said that the next round of negotiations of Transatlantic Trade and Investment Partnership trade deal (TTIP) with the U.S. will begin the week of July 11 in Brussels despite the turmoil surrounding the U.K.’s vote to leave the European Union. Malmstrom said that they are committed to this trade agenda. They are negotiating with a lot of other countries as well, not only TTIP. And they will do whatever need to make as much progress as possible in the coming months, and if possible conclude it before the end of the Obama administration. That is still plan A. And that has not changed, even if the referendum is there. The Brits are still with them and are negotiating with them. That was confirmed yesterday by member states. Also sooner or later the EU will have to make decisions about TTIP once the U.K. and its next prime minister define its trade relationship with the EU and rest of the world. But for now, negotiators will negotiate as a 28-member bloc with the U.K.
U.S. and EU negotiators have been negotiating TTIP for more than three years, seeking to forge a deal that would eliminate tariffs on imports, streamline regulations, remove burdensome technical barriers and eliminate redundancies in areas such as customs procedures, product safety testing and certification and labeling requirements. Malmstrom said that they can now — looking at all the different proposals and issues papers — begin to see the outlines of what TTIP will actually look like. To meet the year-end target of concluding the talks, negotiators will have to move fast and she gave an update on where things stand in different areas of the TTIP negotiations.
On market access, negotiators are looking for an ambitious outcome that removes almost all tariff protection. Here, they are relatively well-positioned, with ambitious offers on the table from both sides. The U.S. and EU have long touted the TTIP as an agreement that can bring regulatory cohesion to a thicket of diverse regulations that often impede trade across the Atlantic. U.S. and European fashion industry associations have pressed TTIP negotiators to streamline, simplify or eliminate duplicative and burdensome labeling and product safety requirements. There are several sticking points in the talks, including an investor-state dispute settlement mechanism that allows an investor the right to use dispute settlement proceedings against a foreign government. Differences in government procurement policies are also thorny. Those issues could slow down the talks if they move into high gear this summer. Malmstrom noted there was still “more work to do” on trade in services to address long-standing barriers and said negotiators are still trying to resolve differences over public procurement provisions, an area that the U.S. textile industry is keenly watching.
The National Council of Textile Organizations has said that it sees some challenges as the Obama administration accelerates negotiations with the EU on TTIP. The two biggest issues for the industry are that the EU favors a more liberal rule of origin, a fabric-forward rule, as opposed to the stricter yarn-forward rule that the U.S. supports. In addition, the EU is pressing for access to U.S. military contracts through the government procurement process, which currently only allows the Defense Department to purchase 100 percent U.S.-made products from the fiber forward under the Berry Amendment. Several textile companies rely on the U.S. government procurement business to grow and expand, and staunchly oppose opening it up to European bidding. Malmstrom argued the EU’s case, saying that the bloc is “looking for a level playing field.” When EU companies compete for contracts — with the federal government and in a critical mass of U.S. states — they should have the same advantages as U.S. firms have under their European system. As they have one set of rules, full transparency and a joint database for all levels of the European Union.
SOURCE: Yarns&Fibers
Rwandan has massively hiked import duties on secondhand clothes and shoes, coming mainly from Europe and North America, to help promote local manufacturers, officials said Friday. The measure "takes effect from July 1", Rwandan Revenue Agency manager Drocelle Mukashyaka told AFP. Import duty on each kilogram (2.2 pounds) of shoes and clothing was previously $0.2 (0.18 euro), but it has been raised to $2.5 for clothes and five dollars for shoes, she said. Second-hand clothing imported wholesale from the West is highly popular in Rwanda as in other African nations where these garments are sold at low prices. But the thriving market has "completely killed the textile industry" in developing countries, Trade Minister Francois Kanimba said in mid-June. Annual imports of second-hand clothes were worth a quarter of the $125 million spent on textiles, he explained. Last February, the five heads of state in the East African Community - Burundi, Kenya, Rwanda, Tanzania and Uganda - agreed to introduce a total ban on imports of second-hand clothes by 2019.
Rwandan Economy Minister Claver Gatete on Wednesday said that ending the trade was not just about industry, "it is just not even acceptable according to our dignity." "I don't know if there is any trade on second-hand clothes between any European countries among themselves," he told a press briefing. Patel Ritesh, the director of Utexrwa, one of the two textile factories in the small central African nation, hailed the new taxes as good for business in a sector hit hard by cheap competition. Chinese-run firm C&H Garment currently makes textiles only for export, but will in July launch products on the Rwandan domestic market. "Of course we're going to produce because demand will be higher," said management official Saidi Hitima. But ordinary Rwandans are less keen on the measure, fearing a rise in prices of imported clothing while local industry is not up to meeting demand. "I'm going to have difficulty dressing my children," said Clementine Icyitegetse, a mother of three who finds clothing too expensive. "This decision will only benefit the rich."
SOURCE: The Business Recorder
