The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 6 DEC, 2016

NATIONAL

 

INTERNATIONAL

 

Textile Raw Material Price 2016-12-05

Item

Price

Unit

Fluctuation

Date

PSF

1081.96

USD/Ton

1.22%

12/5/2016

VSF

2213.31

USD/Ton

0%

12/5/2016

ASF

1858.94

USD/Ton

0%

12/5/2016

Polyester POY

1123.35

USD/Ton

0.26%

12/5/2016

Nylon FDY

2599.62

USD/Ton

0%

12/5/2016

40D Spandex

4284.29

USD/Ton

0%

12/5/2016

Polyester DTY

1423.25

USD/Ton

1.03%

12/5/2016

Nylon POY

2773.89

USD/Ton

0%

12/5/2016

Acrylic Top 3D

5475.17

USD/Ton

0%

12/5/2016

Polyester FDY

1336.12

USD/Ton

0%

12/5/2016

Nylon DTY

2454.39

USD/Ton

0%

12/5/2016

Viscose Long Filament

2033.22

USD/Ton

0%

12/5/2016

30S Spun Rayon Yarn

2861.03

USD/Ton

0%

12/5/2016

32S Polyester Yarn

1725.33

USD/Ton

0.59%

12/5/2016

45S T/C Yarn

2585.09

USD/Ton

1.14%

12/5/2016

40S Rayon Yarn

1858.94

USD/Ton

0.79%

12/5/2016

T/R Yarn 65/35 32S

2207.50

USD/Ton

0%

12/5/2016

45S Polyester Yarn

3006.26

USD/Ton

0%

12/5/2016

T/C Yarn 65/35 32S

2251.07

USD/Ton

0%

12/5/2016

10S Denim Fabric

1.33

USD/Meter

0%

12/5/2016

32S Twill Fabric

0.82

USD/Meter

0%

12/5/2016

40S Combed Poplin

1.15

USD/Meter

0%

12/5/2016

30S Rayon Fabric

0.66

USD/Meter

0%

12/5/2016

45S T/C Fabric

0.64

USD/Meter

0%

12/5/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14523USD dtd. 5/12/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

Demonetisation: Textile firms lay off 10,000 workers

The textile industry has laid off over 10,000 workers and units were forced to stay shut for up to four days in a week due to the liquidity crunch following the demonetisation of Rs 500 and Rs 1,000 currency notes, according to the Amritsar Textile Processor Association (ATPA). The production at processing units in Amritsar reduced to 25 per cent. The textile sector was labour intensive, and close to 40 processing units in Amritsar help sustain over 700 warp knitting and textile weaving units in the region, said Krishna Kumar Sharma, president of ATPA, while addressing the media. The shortage of the new currency notes, so many days after demonetisation is a management failure on the part of the Centre, said Sharma. He urged the government to ease the limitations imposed on the withdrawals of money from savings and current accounts. Cash crunch has resulted in industries staying shut for four days a week and demonetisation has majorly affected MSME and small scale units by delivering their resourced to large-scale corporates, said Kamal Dalmia, president of Focal Point Industries Welfare Association. According to Dalmia, the execution of the demonetisation policy has been disastrous for the public.

SOURCE: Fibre2fashion

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GST to create level-playing field for bigger textile players

The introduction of GST will help create a level-playing field for the bigger textile manufacturers as smaller or unorganised sector will not be able to use some of the current practices to keep themselves competitive, a senior industry official said.  "The introduction of GST may not have any negative or positive impact for the textile industry in general. However, the consolidation of taxes will help create a level-playing field for the bigger textile manufacturers as smaller or unorganised sector will not be able to use some of the current practices to keep themselves competitive," Sintex Industries Group MD Rahul A Patel told reporters on the sidelines of India ITME 2016 event here.   Sintex aims to install one million spindles and has already become world's No 1 compact facility with over 3,00,000 spindles installed at their plant at Pipavav in Gujarat, Patel said.

 

The textile sector is one of the largest contributors to India's exports, accounting for approximately 11 per cent of the total outbound shipments. India's overall textile exports during FY 2015-2016 stood at USD 40 billion and the industry size is expected to reach $223 billion by 2021.  The ongoing six-day India ITME 2016 exhibition provides a platform for joint ventures and collaborations between the stakeholders of textile industry in India and overseas. Nearly 1,050 exhibitors from 38 countries are displaying state-of-the-art machines and technologies at the event.

 

SOURCE: The Economic Times

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Knitwear sector awaits credit policy

The monetary policy review by Reserve Bank of India this week, the first after demonetisation, is being eagerly awaited by the knitwear manufacturers. They want to know whether the interest rates for loans would come down as suggested by authorities. “The repurchase rate (the rate at which RBI lends to commercial banks) has to be brought down at least by 50 basis points to less than 5 per cent. More importantly, the RBI and other authorities should ensure that the commercial banks pass on such benefits to the end customers. On most of the earlier occasions, the rate cuts by RBI was not effectively transmitted to the loan borrowers,” said G.R. Senthilvel, secretary, Tirupur Exporters and Manufacturers Asociation. The capital-intensive knitwear sector is already reeling under the cascading effects of currency crunch after demonetisation. “Apparel manufacturers are facing lower demand in the market as the retailers have reduced the purchases due to currency crunch. So, loans with soft interests are essential for the apparel production units to maintain inventory of raw materials for future production requirements,” said S. Dhananjayan, a senior member of Institute of Chartered Accountants of India. The knitwear manufacturers feel that a reduction in repurchase rates would put the sector back into the growth trajectory.

 

SOURCE: The Hindu

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Cotton prices ruling high on subdued arrivals

Cotton prices across the country are ruling high on subdued arrivals. The lack of demand in the apparels industry has also impacted arrivals and although farmers are getting high prices, they are preferring to hold back because of the currency shortage in the market, top industry officials said. Although the country has contracted some 6 lakh bales for export to countries including Bangladesh and Vietnam, traders are finding it difficult to meet contractual obligations because there is no kapas in the market, MM Chokalingam, Director, Marketing, Cotton Corporation of India (CCI) said. “Prices are currently in the range of R5,200 per quintal while Minimum Support Prices are R4,160 per quintal. This is because some traders are still offering old currency notes to farmers. Some clarity will emerge by the month-end once the currency issue closes. Till then prices will continue to remain high,” he said.

 

According to him, cotton arrivals are presently in the range of 1.20 lakh bales across the country on a daily basis although there is no much consistency. Given the existing cotton prices, there is little need for the Corporation to go in for MSP operations, he said. The international rates are higher by 4-6 cents than the domestic market but traders do not stand to gain since they are unable to supply cotton as per the contract, he pointed out. Last year, Pakistan was the biggest exporter and had exported some 20 lakh bales from India. This time, however, because of the border tensions, cotton export to the country has been affected, industry people said. According to industry sources, Bangladesh has contracted some 2 lakh bales, China has contracted the same amount while Vietnam could export some 1 lakh bales from India. Concerns were expressed in the industry that the supply crunch had driven up prices higher than international prices and since the traders are unable to meet obligations, buyers could look to other markets.

 

Last month, Prime Minister Narendra Modi had scrapped R500 and R1,000 notes but the move disrupted trading of farm commodities like cotton, soya as most farmers prefer payments in cash. With expectations of a bumper crop of some 350 lakh bales, Indian traders had contracted exports for some 6 lakh bales so far to Bangladesh, China, Vietnam and Pakistan but just 6 lakh bales. Last year, the country shipped some 69 lakh bales in export.

India is the world’s largest producer of cotton and also the second largest exporter. The present cash crunch is leading to delays in sales of cotton and is creating shortages in the domestic market as well as reducing supplies to the global market, the International Cotton Advisory Committee (ICAC) said in its latest report.

 

SOURCE: The Financial Express

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Clean, affordable housing will reduce exploitation of Indian textile workers - campaigners

A proposed new township for garment industry workers in the southern Indian textile hub of Tiruppur will tackle the problem of exploitation of workers housed in hostels on factory sites, campaigners said on Monday. In a first, the Tiruppur Exporters' Association, a trade body, has asked the Indian government to give the go-ahead for the construction of 100,000 houses and 200,000 dormitories in and around Tiruppur to accommodate workers. In a proposal presented to Indian finance minister Arun Jaitley on Nov. 26, the association suggested a public-private partnership to build a satellite township near Tiruppur with schools, hospitals, shops and other amenities. It has also recommended the construction of hostels for single working men and women in the southern state of Tamil Nadu, where India's textile industry is concentrated. "We are not able to attract or retain labour because living conditions available to them at present are not sufficient or ideal. Housing is a big problem," the association secretary S Shakthivel told the Thomson Reuters Foundation.

The $40 billion Indian textile and garment industry, much of which operates in the informal sector and is poorly regulated, employs an estimated 45 million workers. According to the association, the industry in Tiruppur employs an estimated 800,000 workers, most of them migrant workers accommodated in cramped hostels run by the factories. Living in the workplace leads to exploitation, with workers being forced to toil for up to 12 hours a day, campaigners say. "Nobody has access inside these spaces and there are restrictions on the freedom of movement of workers," said Karuppu Samy, director of non-profit group the Rights Education and Development Centre that campaigns for labour rights. "They are not allowed to leave the premises unescorted, visits from family are not encouraged and there have been numerous complaints of sexual harassment in the confines of these rooms."

SOURCE: The Reuters

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Raymond shifts focus to product innovation to attract millennials, grow suitings segment

With a view to beat an overall slump in the fabrics market and resonate well with young consumers, especially millennials, fabric and apparel major Raymond Ltd has shifted its focus to bringing in a lot of innovation, in terms of product offering, into its suiting business. Raymond shifts focus to product innovation to attract millennials, grow suitings segment. While Raymond still has a near 60 per cent market share in the Rs. 18,000-crore suitings segment, the overall Indian suiting business has seen a slowdown over the years as people opted for more readymade garments

Suitings typically refer to fabrics used for making blazers, coats, jackets, suits and trousers. Apart from suitings, the other segments under textiles division include shirtings (fabrics for making shirts), made-to-measure garments and exports. While Raymond still has a near 60 per cent market share in the Rs. 18,000-crore suitings segment, the overall Indian suiting business has seen a slowdown over the years as people opted for more readymade garments. “Apparel as a category is anyway much bigger than suitings because of consumer preference. There has been a slowdown in the overall suiting market and it is same for us as well. Currently, our suiting business is growing in single digit, mainly due to sluggish economic growth, while apparel business growth is in double digits,” Vice President, Head Sales & Distribution – Textile, Raymond Ltd, Ram Bhatnagar, told Indiaretailing Bureau on the sidelines of Woolmark’s Wool Conclave. However, suitings are and will remain a significant division for Raymond added Bhatnagar. “So, while the overall suiting market is growing at 3-4 per cent, we are at 6-7 per cent. And this is mainly because we are doing a lot of innovation in the suitings space which is widening our consumers base and ultimately driving our growth.”

For instance, over the last one year, the company has launched and explored new offerings focussing on functionality. In March this year, it launched its ‘technosmart’ brand of fabrics which is targeted at corporate travelers and has features like UV protection, wrinkle resistance, and smooth touch, which are ideal for crafting trousers, suits, and jackets. Raymond now says that the response has been phenomenal and it is one of the greatest success stories for the company. “Over the years, we have realised that we can’t do much about the change in consumer preferences and mindsets but that we can certainly make our product even more appealing by adding features consumers love and that’s how we come up with our techno series,” Bhatnagar said. “Our techno series has been received so well by all the consumers, especially young user base. Over the last few months, we have acquired lot of new customers who got excited by the feature and has asked for trails. The range has already become a 150 crore category for us and it has now become a standalone brand for Raymond,” he added. The company is also looking to come up with the new product ranges in the techno series like techno stretch. “The idea is to make techno series as big a brand as The Complete Man,” Bhatnagar said.

The company which currently manufacture textiles from three manufacturing unit; Chhindwara in Central India, Vapi in Gujarat, near Mumbai and Jalgaon in Maharashtra is also ramping up its production capacity. It has in Feb this year invested Rs 450 crore in a new textile unit at Nandgaon Peth in Amravati district in Vidarbha. The plant will have an annual capacity of 20 million metres of cotton fabric. Raymond is also looking to strengthen its brand presence in the Middle East and South Asian countries as part of its overseas push. Raymond products already get acceptance in 55 countries and now it has opened an office in Dubai, which would look after the Middle Eastern markets.

SOURCE: The India Retailing

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CCI probes Grasim over unfair pricing

The Competition Commission has ordered a detailed probe against the Aditya Birla group firm, Grasim Industries, for alleged discriminatory pricing ways in the sale of viscose staple fibre.

It has been alleged that the company offered different discounts to different customers for the sale of viscose staple fibre (VSF). The watchdog has called for an probe by the director general (DG) — its investigation arm — after prima facie finding evidence of competition norms violations. Apart from allegations of the company selling VSF at higher rates to domestic customers compared to foreign ones, it was alleged that the firm controlled volume of VSF production in the local market as well as arbitrarily cut down production to increase prices. The CCI found that Grasim is a dominant player in the VSF market. The regulator said it “is of the prima facie view that OP 2 (Grasim Industries) appears to be imposing unfair and discriminatory pricing on the informant and certain other textile manufacturers and leveraging its dominant position in the relevant market of VSF in the downstream market of textile products”.

 

SOURCE: The Financial Express

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Nayaab exhibition celebrates the best of Indian weaves

Curators Rupa Sood and Sharan Apparao recently organised the second edition of Nayaab, an exhibition to showcase the finest textile traditions of India. The three-day exhibition, held in New Delhi, showcased the uniquely designed couture creations by nineteen talented designers who used traditional Indian textiles techniques in their creations. With this edition of the exhibition, the curators brought a wide selection of the Indian weaves paying tribute to the ancient textiles of the country. The exhibition encapsulated the aesthetic sensibilities of designers presenting their work of Indian textiles in modern fashion. “Nayaab is an effort to celebrate Indian textiles. As curators, our effort is to present the best of the designers for our customers. We do a thorough research of each designer before collaborating for the exhibition. However, in this initiative we ensure to present not just the Indian weaves, but even the traditional techniques and methods to craft the textiles. Designers use different crafts to enhance their designs and it is every core together - the embroidery, the weaves, the dyeing to create each piece that we exhibit at Nayaab,” Sood and Apparao told Fibre2Fashion.

The curators carried out a thorough research to select the designers for the exhibition and helped them understand the idea behind Nayaab. “The designers are chosen with thorough market research of their latest collections. In the process, we ensure the designers comprehend the quintessence of Nayaab as this helps them create the collection in sync with our exhibition. However, in terms of the techniques and the weaves, we always discuss and share inputs with each other but eventually we leave it to the designers to decide and present the final collection, as they understand the market well,” continued the curators.

Speaking about their plans of scaling up, the curators said, “We certainly want to take the concept forward into a more brilliant work that should come out of Nayaab as the whole idea of Nayaab is to bring out something really out of the ordinary. At the moment, we have no plans to scale up the event. We want to keep it small, keep it contained, so that we can maintain the quality we started with.”

SOURCE: Fibre2fashion

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Modi presses for stable crude oil price

Prime Minister Narendra Modi has pressed for a rationalised and stable crude oil price to allow developing countries to maximise benefits. In his inaugural address at Petrotech 2016 — 12th edition International Oil & Gas conference — Modi said: “Oil ministers from developing countries know the sensitivity of energy pricing,” adding that there is a need for a sustainable, stable and reasonably priced energy for economic development to reach the bottom of the pyramid. As per estimates, India is poised to account for one-fourth of the incremental global energy demand between 2013 and 2040. Modi said that India’s economy is expected to grow five-fold by 2040 and as per estimates “India is expected to consume more oil in 2040 than the whole of Europe”.

 

Transport infrastructure

Commenting on the increasing demand for energy, Modi said that the country’s transport infrastructure is expected to increase manifold. “The commercial vehicle population of 13 million is projected to reach 56 million by 2040. In civil aviation, India is currently the eighth largest market in the world and set to become the world’s third largest by 2034. Growth in the aviation sector is expected to raise demand for aviation fuel four times by 2040. All this will affect energy demand," he added. Modi said that his vision for India’s energy future has four pillars — energy access, energy efficiency, energy sustainability and energy security. He said that the government aims to extend piped natural gas to 10 million houses over the next five years and to ensure that every village in India has access to electricity by March 2018.

 

Commenting on the initiative to boost public transport, he said that his government has upped public capital investment in railways by more than 100 per cent between 2014-15 and 2016-17. He said, “We are completing dedicated freight corridors. We are constructing a high speed rail corridor between Mumbai and Ahmedabad which will be more energy-efficient than air travel. We have given a big thrust to waterways, both inland and coastal. Our Sagarmala project will connect the whole of India’s long coastline. We have also opened up new inland shipping routes on large rivers. These steps will improve energy efficiency.”

 

SOURCE: The Hindu Business Line

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GDP data show rising discrepancies

Discrepancies rose by Rs 41,205 crore whereas GDP expanded by a little over Rs 2 lakh crore in the second quarter year-on-year. In the first quarter, the respective figures were Rs 25,471 crore and Rs 1.93 lakh crore. GDP rose 7.3 per cent in the second quarter, slightly higher than 7.1 per cent in the first quarter. Discrepancies in the national accounts arise because data on the demand side is not actual data but it is derived from certain ratios. The actual data is supply-side – agriculture, industry and services. Adding indirect product taxes and subtracting give GDP data. Discrepancies emerge on the demand side and not on the supply side of the data. Chief statistician T C A Anant said: “I don’t have all accounts data... I have to provide for errors and omissions as the two sets of numbers are different. Production is actual data. On the demand side, at this stage, we make projection based on rates and ratios and output of certain segments based on the previous year’s estimates.”Growth pangs of GDP Growth pangs of GDP In the absence of the full accounting data, there would always be scope for statistical error, he noted. The actual data come 18 months down the line from the close of a financial year.  The problem could be rectified to an extent after the Central Statistics Office comes out with a supply use table (SUT). However, there is a lag of release in this table. The office has released SUT till 2014-15 and the work on 2014-15 is under progress.  “Once the flow of SUT annually becomes more stable, it may be possible for somebody to look at it more carefully and work out a mechanism of incorporating that understanding into the current computation as well,” said Anant.

 

At the moment, it is the last piece of information in the national accounts puzzle, he said, adding the reason why SUT takes so long to compute is that disaggregated information on which they are based  comes after a lag.  SUTs are like the input-output matrix but cover more data than the latter. These would cover both services and manufacturing, unlike the input-output matrix, which covers only factory production. The supply table describes the supply of goods and services, which are either produced in the domestic industry or imported. The use table shows where and how goods and services are used in the economy. However, SUTs could be used for annual accounts and not for quarterly numbers, former chief statistician Pronab Sen said. He said it is foolhardy to use SUTs for quarterly estimates even as some countries such as Australia and Canada do so. In quarterly data, it is important not to hide discrepancies, he said.  Discrepancies have been on the rise and their growth contributed to one-fifth of the gross domestic product expansion in the second quarter of the current financial year against 13 per cent in the previous quarter.

 

SOURCE: The Business Standard

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RCEP Member Countries to Put Pressure on Trade Protectionism     

The Ministry of Trade, Industry & Energy announced on December 5 that the 16th round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) is underway from December 6 to 10 in Tangerang, Indonesia. A total of 16 countries are to take part in the RCEP – 10 ASEAN member countries, South Korea, China, Japan, Australia, New Zealand and India. They have a total population of 3.5 billion or so along with a GDP of US$22.4 trillion, equivalent to 30.6% of the global total. The RCEP is led by China and China is trying to cope with the Trans-Pacific Partnership (TPP) led by the U.S. by means of the RCEP. The total GDP of the 12 TPP member countries including Japan, Mexico, Australia, New Zealand and Vietnam is US$27.4 trillion. The negotiations for the TPP were concluded in October last year and the agreement was signed in February this year. On the contrary, those for the RCEP have shown a very slow progress. The deadline has been extended by one year but the participants have reached an agreement in only one out of 14 fields of negotiations.

Things have drastically changed though with the election of Donald Trump as the President of the United States. He is regarding the TPP as a potential catastrophe and has declared that the U.S. would withdraw from it once he takes office in January 2017. This is an opportunity on the part of China. According to some experts, China is likely to mention a specific period for the conclusion of the negotiations in Tangerang and may suggest a higher degree of market opening for a rapid progress of the talks. “At the 16th round of talks, the member countries are expected to voice their discontent with Donald Trump’s trade protectionism,” said the Korea Institute for Industrial Economics & Trade. The South Korean government recently remarked, “The importance of the RCEP is on the rise as a mega FTA in the Asia-Pacific region with trade uncertainties mounting due to the spread of trade protectionism.”

SOURCE: The Business Korea

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India ready to resume BTIA talks with EU without preconditions

Government is committed to an early and balanced outcome of India-EU Bilateral Trade and Investment Agreement (BTIA) negotiations and is willing to resume talks without any preconditions, Parliament was informed. "The European Union (EU) has expressed willingness to re-engage with India in India-EU Broad based Bilateral Trade and Investment Agreement (BTIA) negotiations subject to certain conditions. "India is willing to resume the negotiations without any preconditions and awaiting a response from the EU side. India is committed to an early and balanced outcome of the India-EU BTIA negotiations," Commerce and Industry Minister Nirmala Sitharaman said in a written reply in the Lok Sabha.  The FTA partners are bound to comply with the provisions of the agreement.

Replying to another query, she said the share of EU in India's total trade has been consistent during recent years at around 13 per cent. India's share of exports to EU has also been stable during the recent years at around 16 per cent of the country's total exports. India-EU BTIA negotiations started in 2007 and 16 rounds of talks had been held till 2013, after which EU withdrew from the negotiations. Recently, four stock-taking meetings on India-EU BTIA have been held. India has expressed its willingness to resume negotiations in these meetings. As per European Union law, no member country now can go for bilateral trade and investment pact with India as the grouping is in negotiations for a EU-India Broad-based Trade and Investment Agreement (BTIA). By the end of 2017, India's trade and investment pacts with 23 countries are likely to expire, according to EU officials. The two sides are yet to iron out issues related to tariff and movement of professionals but the EU has shown an inclination to restart talks. Besides demanding significant duty cuts in automobiles, the EU wants tax reduction in wines, spirits and dairy products, and a strong intellectual property regime.

On the other hand, India is asking for 'data secure nation' status to be granted by the EU. The country is among the nations not considered data secure by the EU. The matter is crucial as it will have a bearing on Indian IT companies wanting market access.

SOURCE: The Business Standard

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Indonesian textile sector urges govt to regulate imports

The Indonesian textile industry urged its government to regulate imports of cheap textile products into the country, which are flooding the market and in the process, disrupting the domestic industry. The industry particularly pointed fingers towards China for the flood of textile imports, and requested the government to set an import reference price. Speaking to a leading Indonesian daily, Indonesian Textile Association (API) chairman Ade Sudrajat added that along with imports of cheap textiles from China, smuggling of used clothing also should be checked. A senior official in the Industry Ministry said that production capacity in the upstream textile sector was lying idle, so the government has plans to regulate and control textile imports. An Indonesian Industry Ministry data reveals that the domestic textile industry suffered losses of around $2.2 billion per annum due to illegal smuggling of textiles.

SOURCE: Fibre2fashion

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Pakistan textile bodies put off black day protest plan

Varying lobbying groups of the textile industry will hold a roundtable conference by the end of this week to deliberate on a single point – availability of electricity and gas to all provinces at regionally competitive prices without any disparity. All Pakistan Textile Mills Association (Aptma) Punjab Chapter Chairman Syed Ali Ahsan announced this on Monday. He also said textile bodies would delay their December 6 (Tuesday’s) black day plan following assurance from Punjab Chief Minister Shahbaz Sharif that he would take up industrial issues with the prime minister and get them resolved. A delegation of all textile associations will also call on Federal Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi on Dec 6 to outline the challenges faced by the industry. These decisions were taken in a meeting of leading textile associations at the Aptma Punjab office. Representatives of the All Pakistan Textile Processing Mills Association, Pakistan Textile Exporters Association, Council of Power Looms and other value-added industry groups were present in the meeting. Ahsan said 70% of spinning, 55% of weaving and 60% of processing industries were located in Punjab, but they had become unviable because of high cost of doing business.

Eventually, 35% capacity of the industry has remained unutilised with a 10% rise in the cost of doing business in Punjab compared to the industry running in other provinces. In the absence of a level playing field for Punjab’s textile industry, exports of yarn and fabrics had dropped 30% and 35% respectively in quantitative terms, he added. However, he was hopeful that industry issues would be addressed with intervention of the chief minister.

SOURCE: The Tribune

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1m sqm provided for development of textile industries in Badr city: Minister of Industry, Egypt

The Ministry of Trade and Industry will provide 1m sqm of land for textile and clothing industries in Badr City in December as part of the government plan to develop 10 industrial areas dedicated to textile and clothing manufacture over the next five years, minister Tarek Kabil announced. According to a press release from the ministry on Monday, the minister emphasised that the textile industry is one of four major fields of industry which the ministry has decided to develop through a strategy launched in November. Kabil said that Egypt has a competitive advantage in this field, and the government plans on increasing its competitive abilities in this industry. The minister added that the government aims to increase the value of textile and clothing exports to $6bn, and to create 1m jobs, adding that it is the second largest industry in Egypt. He added that the textile and clothing industry accounts for 30% of the total industrial production in Egypt; 16% of all its industrial exports; and 30% of all industrial employment with nearly 1.2 million people employed by 7,000 companies with investments totalling $5bn.

Kabil also added that the industry provides clothes and textiles to 70 million people, and that the ministry cares about implementing the agreements made in September between the Supreme Council for Textiles and the prime minister. “The government is working on developing the industry from planting cotton to the final product,” said Bahaa El-Adly, the head of Badr City Investors Association. El-Adly believes that the government is serious about developing the textile industry owing to its national importance. He added that it is important for textile industries to be grouped together so as to facilitate their improvement. Investors in Egypt and especially in Badr City want more industrial lands; he believes the time is right for Egypt to pursue new investments in all industrial fields. “The government must develop all industries at the same time because there is no such thing as an unimportant industry,” he said.

SOURCE: The Daily News Egypt

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Pakistan's 2016-17 cotton output surpasses last season

Cotton output in Pakistan during 2016-17 season has already surpassed the total amount produced in the previous season. Ginneries in Pakistan have received 9.778 million bales of cotton by December 1, 2016, compared to the total arrival of 9.768 million bales in the previous season, according to the Pakistan Cotton Ginners' Association (PCGA). By December 1, 2016, cotton received at ginneries in Pakistan show an 13.28 per cent year-on-year increase over arrival of 8.631 million bales during the corresponding period of last season, according to the fortnightly report on cotton arrivals, prepared by the PCGA, in joint cooperation with All Pakistan Textile Mills Association (APTMA) and the Karachi Cotton Association (KCA).

In the major cotton producing province of Punjab, total cotton arrivals increased by 20.69 per cent year-on-year to 6.158 million bales, according to the data. While in Sindh province, cotton arrivals increased 2.57 per cent to 3.619 million bales as on December 1 during the ongoing cotton season 2016-17. Of the total arrival of 9.778 million bales at various ginneries in Pakistan, 8.900 million bales were pressed by ginners, of which 7.868 million bales were sold, leaving an unsold stock of 1.031 million bales with the ginners, as on December 1. The textile mills in Pakistan consumed 7.683 million bales, while another 184,944 bales of cotton were sold to exporters, according to the data. The Trading Corporation of Pakistan (TCP) has not procured any bale of cotton so far this season. As of December 1, a total of 566 ginning factories were operational in Punjab compared to 691 ginneries that were operational during the same time last season. Similarly, 222 ginning units were operational in the Sindh region, compared to 228 operating units during the corresponding period last year. In 2015-16 cotton season, Pakistan's cotton output decreased by 34.28 per cent to 9.768 million bales, compared to the previous season's production of 14.871 million bales.

SOURCE: Fibre2fashion

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European Companies With Chinese Supply-Chains Brace for New Anti-Dumping Framework

An approaching World Trade Organization deadline makes higher prices likelier for European goods made with parts and materials imported from China. On Dec. 11, the European Union could grant China “market economy status,” making it harder under WTO rules for the EU to protect its industries from what it deems as unfair trade practices by Beijing. Or, the EU could draft new trade rules that do away with the distinction between market and nonmarket economies that the bloc has used in the past. The odds are against China getting the market title by the deadline, said Edwin Vermulst, a partner at Brussels-based law firm VVGB Advocaten. “There is simply too much pressure from southern EU states and industrial sectors with a protectionist agenda to maintain, or even increase, the high level of duties,” Mr. Vermulst said.

Based on a proposal made public last month, the European Commission, the EU’s executive arm, aims to tighten its rules against foreign-government subsidies and dumping—or exporting products at below domestic prices. A new slate of European rules is likely to punish those that benefit from Chinese subsidies and discourage Chinese companies from dumping. “What we have seen is that the instruments in our toolbox are not sufficient to deal with the huge overcapacities that result in dumped exports on the EU market,” said Daniel Rosario, a commission spokesman. The effort poses risks for companies that have outsourced parts of their supply chain to China, according to Stephen Adams, a partner at Global Counsel LLP, a London-based consulting firm. “When you have outsourced…to China, you see duties as a cost factor and not as protection,” he said. Europe’s automotive industry could take a beating from higher import duties on Chinese parts and intermediary products, such as aluminum wheels. Other industries might suffer too. Wacker Chemie AG, a German chemical company, exports polysilicon to China, where it is used to make solar panels, which are exported back to Europe. Wacker Chemie didn’t respond to a request for comment. Even before discussions of a new antidumping framework, exporting to the EU had already lost some of its luster for Chinese manufacturers.

When the European Commission imposed duties of 18.4%, Jiangyin Xicheng Steel Co. Ltd. stopped exporting to EU countries. “Our customers cannot afford the sale price in combination with the duty,” said Minnie Lu, sales manager of the closely held company. Still, the proposal needs to pass various EU legislative bodies before it is enacted, so the Dec. 11 deadline would most likely be missed. The proposal could be in place by spring, however. Manufacturers that directly compete with cheap finished products from China said the timing creates a good opportunity to lobby for higher duties on Chinese goods. “We are anxious to fight distortions in the market,” said Emmanuelle Butaud-Stubbs, director general of Union des Industries Textiles, the French textile association. If the EU doesn’t grant market-economy status to China, European companies could face retaliation, said Xu Bin, a finance professor at the China Europe International Business School in Shanghai. In a statement issued Nov. 10, a day after the EU proposal was announced, the Chinese trade ministry said the nation would retain “the right to take all necessary means, and resolutely safeguard their legitimate rights and interests.”

SOURCE: The Wall Street Journal

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Bangladesh urge Malaysian govt to award duty-free access for its products

Commerce Minister Tofail Ahmed, addressing the inaugural session of the Bangladesh Trade and Investment Summit 2016 in Kuala Lumpur requested the Malaysian government to award duty free market access for its products to boost trade ties between the two countries. As the trade balance between Bangladesh and Malaysia is always in favour of Malaysia. The Commerce Minister called upon the Malaysian investors to undertake new investment ventures in fast growing manufacturing, services and infrastructure sectors. Relocation of labour-intensive industries in the textile and accessories, agro-processing industries and other Small and Medium Industries from Malaysia might be the most promising options.

Malaysia and Bangladesh stand as natural allies. Closer cooperation in investment and trade between the two countries would bring immense impact on the development of their economies. The Commerce Minister said that the present government has undertaken an initiative to designate 100 Economic Zones throughout the country, where as of now 22 zones are selected where 19 are in the public sector and 3 are in the private sector. Malaysia can take the advantage of this opportunity and select an Economic Zone for Malaysian business.

Bangladesh is encouraging foreign investment and investors are welcomed to benefit from the incentives provided by Bangladesh. Bangladesh is becoming a regional hub where activities relating to assembling, manufacturing, trading and services are gaining prominence. The Board of Investment (BOI) and Bangladesh Export Processing Zones (BEPZA) are also providing institutional support services to the prospective investors. Bangladesh has also been moving fast to undertake restructured reforms to create most friendly business environment under a market driven economy, with the major thrust coming from the private sector. Tofail said that they strongly believe there are potential of more Bangladeshi products for Malaysian market. Bangladeshi Commodities like raw jute & jute sacking, leather & leather goods and other products have better market prospect in Malaysia. The Commerce Minister said Bangladesh is one of the most open economies in South Asia with an extensively liberalised trade and investment regime. "We've been vigorously pursuing a private sector driven export-led growth strategy."

The Malaysian Deputy Minister said that the proposed FTA would certainly add momentum to the current trade relations. It'll be mutually beneficial for more access to each other's markets for goods and services, and investment and removing barriers to doing business. High Commissioner Shahidul Islam said that Malaysia is Bangladesh's important partner and laid emphasis on working together. The event was supported by Bangladesh Economic Zones Authority (BEZA), Bangladesh Export Processing Zones Authority (BEPZA), Public Private Partnership Authority Bangladesh, Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) and High Commission of Malaysia in Bangladesh. In 2014-2015, export from Bangladesh to Malaysia was US$ 140 million while import from Malaysia to Bangladesh was US$ 1.2 billion. In 2015-2016, export from Bangladesh to Malaysia was US$ 190, which is an indication of a strong trade relation between the two countries.

SOURCE: Yarns&Fibers

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Technology to drive Bangladesh RMG sector's growth

The readymade garment (RMG) of Bangladesh will be driven by technology and will have competitive advantage over other regions, said speakers at a seminar recently held in Dhaka. New techniques of management and human resource development are also required to further improve the scope of the RMG sector, said Shahriar Alam, state minister of foreign affairs.

PricewaterhouseCoopers (PwC) Bangladesh Pvt. Ltd. organised the seminar titled 'Taking Bangladesh Apparel Sector Forward' and invited Alam as the chief guest. “All our factories have been made compliant in the recent past. The global market is expanding and Bangladesh needs to diversify our products and markets and lead the garments sector,” said Alam. “Achievements in the RMG sector of Bangladesh are example to many countries of the world and they have been trying to reach this position. Bangladesh RMG sector has scopes to improve further by applying new techniques of management, human resource development and using the latest technologies and these are essential for achieving the target of $50 billion export earnings from this sector by 2021,” continued Alam.

 

Industry leaders participating in the seminar opined that technology will be the key enabler to help increase productivity in Bangladesh's labour intensive RMG sector. It would need to innovate to remain competitive as countries like Africa and Myanmar enter the RMG mix. Access to finance and financial tools will also is the key to drive the sector's growth. Technology investments need to be increased in businesses as the sector is responsible for up to 80 per cent of the nation's overall export revenue and provides employment to over 4.5 million people. “The sector must focus on how business process reengineering and resource optimisation can create strategic efficiencies. As newer risks evolve, the RMG sector will have to look at ways to ensure the safety and long-term sustainability of this precious industry,” said Mamun Rashid, managing partner, PwC Bangladesh. Moinuddin Ahmed, acting president of Bangladesh garment manufacturers and exporters association (BGMEA), Atiqul Islam, immediate past president, BGMEA & director, Islam Garments Ltd., and Syed A Tanveer, director, Pacific Jeans Limited also participated in the seminar and shared their views and visions for the RMG sector of Bangladesh for a global success.

 

SOURCE: Fibre2fashion

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Italy favours FTA with Pakistan

Pakistan and Italy have identified areas of cooperation to have greater economic and commercial exchanges for mutual benefit. At the conclusion of a meeting of the Pakistan-Italy Joint Economic Commission on Monday, Italy’s Deputy Minister for Economic Development Ivan Scalfarotto told newsmen his country is in favour of free trade with Pakistan under the umbrella of the European Union (EU). He said Italy wants to increase bilateral trade with Pakistan, adding that the China-Pakistan Economic Corridor (CPEC) will enhance global connectivity. Italian companies involved in communications and construction have ample opportunities to take part in the CPEC, he said.

Parliamentary Secretary for Finance and Economic Affairs Rana Muhammad Afzal Khan stated that Italian companies can make investments in energy, agriculture, textile, marble and infrastructure projects. The volume of bilateral trade, which is currently $1.4 billion, will be enhanced to $1.8bn next year, he said, adding that Italy supported Pakistan in getting the GSP-Plus status. The joint commission meeting took place after 10 years. The last session was held in Rome in March 2006. Meanwhile, the Pakistan-Italy Business and Investment Forum will take place on Tuesday (today) to explore ways to enhance trade and economic relations between the two countries. Mr Scalfarotto will lead a delegation of businessmen for a meeting with the Pakistani business community.

Italy is a major trading partner of Pakistan. It is Pakistan’s largest export destination within the EU after the United Kingdom and Germany. Pakistani exports to Italy consist of textiles, clothing and leather apparel. Around 90 per cent of Pakistan’s exports to Italy are textile- and leather-related products and almost half of Italy’s exports to Pakistan fall in the category of machinery and equipment.

SOURCE: The Dawn

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Argentinean textile sector offers opportunities to Pakistani exporters

Ambassador of Argentine, Ivan Ivanissevich has said that 60 percent of Argentina's textile products were being imported and the remaining 40 percent were being produced locally whereas the textile clothing imports have also witnessed an upsurge of 27 percent in the first quarter of 2016, which is an opportunity for Pakistani textile producers to benefit from the situation.  Speaking at a meeting during his visit to the Karachi Chamber of Commerce & Industry, he said that Pakistani businessmen and industrialists should focus on penetrating into the Argentinian market by efficiently competing with their counterparts from India and China etc.  President KCCI Shamim Ahmed Firpo, Senior Vice President KCCI Asif Nisar, Vice President KCCI Muhammad Younus Soomro, Former President KCCI Majyd Aziz and KCCI Managing Committee members were present at the meeting.  The Argentinean Ambassador said that although Pakistan has been exporting various products including textile products, clothing, sports and leather goods etc. yet the exporters have to look for more possibilities of enhancing their share in the Argentinean market and they must also focus on branding which was very essential in all the fields.

 Commenting on President KCCI's comments about investment opportunities in Pakistan, he opined that there were opportunities for Argentinean farmers to invest and cooperate in the agriculture sector as Pakistan's agriculture sector was not as developed when compared with Argentina.  "We can share our know-how on how to improve yield and also assist in improving the irrigation which would result in more yield and less water consumption", he said, adding that the Embassy was also looking at the possibility of sending Pakistani farmers to Argentina so that they could learn from Argentinian expertise and improve their skills.  He stressed that the Argentinean Embassy and Karachi Chamber must maintain a working relationship in order to help identify different areas of cooperation which has to be done by keeping in mind the exact position in both countries.

Referring to the fire incident in a local hotel in Karachi, the Argentinean Ambassador expressed deep sympathies with the families of deceased and also to those who were injured in this tragic incident.  President KCCI Shamim Ahmed Firpo, in his welcome address, pointed out that since establishment of diplomatic relations between Pakistan and Argentina, both countries have been enjoying friendly and cordial relationship and understanding each other on all the major global and regional issues.  He noted that during FY15-16, Pakistan's exports to Argentina were recorded at around $52 million as against exports of $44 million in the previous year, showing an increase of 17 percent whereas, Pakistan's imports from Argentina stood at $194 million during FY15-16 as compared to $141 million in the same period last year, reflecting a rise of 37 percent "Although gradual improvements are taking place, which is a good sign but I believe lot more still needs to be done as huge potential exists to raise the current trade volume at a more rapid pace", he added.  He underscored that the Karachi Chamber of Commerce wants to promote business, mutual understanding and friendly relations between the business communities of Pakistan and Argentine.  "We also want to promote Argentinean investment in Pakistan and do everything for the development of Pakistan-Argentine business and investment cooperation", Shamim Firpo said, while stressing need to promote trade, commerce and economic cooperation between the two countries, advocate steps to foster and organize trade and investment delegations, trade fairs, exhibitions, seminars and meetings etc.

SOURCE: The Business Recorder

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Sourcing show Avantex Paris begins Feb 6

The show for sourcing innovative products to help create and design collections that blend fashion and high tech, Avantex Paris will be held February 6-9, 2017. In order to make it easy for buyers, the offers from exhibitors have been classified into four segments namely, Materials & Components; Garments & Accessories; Prototype Studio and Smart Retail. The organiser, Messe Frankfurt France is also organising various lectures and round tables, an innovation forum, experimental workshops and a fashion show. There will also be a conference titled Competitiveness Cluster for Textiles and Flexible Materials in the Rhône-Alpes Region' in partnership with the Austrian Manmade Fibers Institute and Techtera, which will provide delegates first-hand reports on global fashion and high-tech concepts. “Since Avantex Paris was launched in September 2015, Messe Frankfurt France has taken steps so that heads of collections and designers are offered solutions that are at the forefront of innovation for clothing and fashion accessories,” Michael Scherpe, president of Messe Frankfurt France said.

SOURCE: Fibre2fashion

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Nanowear’s SimplECG receives FDA nod

Nanowear is the leading developer of patented, textile-based nanosensor technology with applications in the cardiac, neurological, industrial, safety, government and sports medicine / performance diagnostics monitoring markets. The company receives US FDA approval for remote cardiac monitoring undergarment, SimplECG-its first product. SimplECG collects continuous multi-channel ECG, heart rate and respiratory rate data from the garment and transfers it to a web-based portal for review by a physician, by way of a mobile application. The initial version of the product is iPhone-based. This marks the company's first FDA clearance, and reflects Nanowear's strategy of differentiating itself in an otherwise crowded market for wearables, with an eye towards the future of the "Connected Self."

SimplECG will provide an easier and more patient-friendly means of capturing and transmitting diagnostic data via everyday garments in an effort to monitor heart behavior and prevent cardiac-related events. John Zimmerman M.D., Nanowear's chief medical officer, said that as healthcare continues to evolve and move beyond the walls of the hospital, easy-to-use and clinically validated solutions are essential to ensure patient compliance and actionable diagnostic insights for physicians and providers. Co-founder & CEO Venk Varadan remarked that it was a huge milestone for the company. He said that the FDA's decision not only positions them for commercial opportunities in remote cardiac monitoring, but more importantly, it provides accreditation of the company's one-of-a-kind, cloth-based sensor technology as medical-grade. The company has worked in close partnership with the FDA since early 2015 to understand the unique dynamics of this device, specifically the nanosensor technology. Their discussions were collaborative and interactive, culminating in the announcement. Having spent the last two years focused solely on product development and the regulatory process, Nanowear will now focus its near-term efforts on product commercialization, strategic partnerships and continued development of complementary products and applications for chronic disease states.

SOURCE: Yarns&Fibers

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China, South Korea, Japan meet on economic exchanges

China, South Korea and Japan have held their first trilateral economic and capacity forum in Tokyo, aiming to connect thinktanks, enterprises and governments from the three countries. There is no doubt that Beijing, Tokyo and Seoul place importance in the trilateral economic cooperation, in bilateral and multilateral capacity. However, it seems the scope of the trilateral cooperation is not restricted within the bounds the three nations.  Academia, Entrepreneurs and government officials from China Japan and Republic of Korea gathered in Tokyo, to discuss possibilities of trilateral cooperation’s in the Asian markets. China Japan and ROK account for 20.7 percent of global GDP and 18.4 percent of total global trade.  Experts say joint trilateral efforts can expand the market potential exponentially "The cooperation between Korea, Japan and China is very important in the Asian Pacific Region, because we three countries is most developed and the biggest nations. In actuality, cooperation among our three nations is test bed methodologically on one hand, and also it will reduce over competition between our three nations," Jung Whan-Woo, reserach fellow with Korea Trade-Investment Promotion Agency, said.

China is eager to play a supporting role in the collaboration effort. Experts say benefits of such joint efforts will go beyond economic benefits "If the three countries can take advantage of each, and cooperate in the economic sense, in the forth party or the other place of the world. We will turn competition among them into what we call “Coo-petiton” it’s a collaboration and competition together. So it will not only relax the tension among them but also create new opportunities," Tsinghua University vice president Yang Bin said. Participants hope that opportunities like this, exchanging ideas will assist future trade negotiations. "I think our three nations have considerable weight in global economy and importance in trade. We have a huge presence especially in East Asia. I hope that the three nations can united together, and accelerate the China, Japan ROK trilateral FTA, and the RCEP negotiations," Iwao Okamoto, president of Japan-China Econonic Association, said. This roundtable is the first of more forums that the organizers are hoping to organize in the future. Hoping to enhance trust and exchange ideas to boost the trilateral economic cooperation.

SOURCE: The CCTV

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Rethinking trade policy and protectionism in the Trump era

What kind of trade policy will the United States have under President Donald Trump? This is a hot issue, as Trump has made unorthodox pronouncements on trade issues during and after the election campaign. If he acts on even some of the positions he took, it will create a sea change in trade policy in the US and possibly the world. Trump has recently emphasised that he will take the US out of the Trans Pacific Partnership  Agreement (TPPA) on his first day of office, and renegotiate the North American Free Trade Agreement (NAFTA). He called them a disaster for the US.   He was probably referring to the claim that many of manufacturing jobs lost in the US in recent years were due to free trade agreements (FTAs) and the overseas relocation of US companies.  He is also probably blaming trade agreements for the US’ huge trade deficits. Most economists however have a different view.  They attribute US job losses mainly to technological change. There are legitimate fears that Trump’s “Put America First” slogan, when applied to trade, will lead to an increase in trade protectionism.

Trump has threatened to raise tariffs on products from China and Mexico by as much as 45%.   Trump in his campaign accused China of being a “currency manipulator”.  If a country is so labelled by the Treasury Department it could be grounds under US law to slap extra tariffs on its products. President Obama came under pressure from many Congress members and economists to do just that, but he smartly resisted as he realised it would trigger a very nasty trade war with China. It is possible Trump will also climb down from this populist stance once he is President.  For a start, China’s currency is not under-valued and currently its government is trying to prevent (not encourage) its currency from further sliding.

Secondly, taking trade action against China on currency grounds would be against the rules of WTO, and China should be able to successfully take a WTO case against the US for any such action. Finally, China has warned it will retaliate if the US were to take protectionist actions.  An article in the Beijing-based Global Times spelled out how the  country would cancel its orders of Boeing aircraft, restrict US auto and I-phone sales in China and halt US soybean and maize imports, while a number of US industries would be impaired. But if an across-the-board tariff hike is out of the question, the Trump administration is likely to consider taking more trade-remedy action on a range of products from China and other countries by claiming they are being dumped or unfairly subsidised. There are loopholes in the WTO rules on trade remedies which have made these a favourite protectionist tool.  A country can slap on high tariffs against an imported good from another country by claiming its price is artificially low because it has been “dumped” (exported at a price lower than the domestic price) or unfairly subsidised by the state. But if the exporting country complains and a WTO panel rules that the actions were wrongly taken, there is no penalty imposed against the offending country which is only asked to lift the tariff.  Meanwhile the aggrieved country has lost many years of export earnings.  Moreover, the same actions can again be taken against the same country, thus perpetuating the protection. We may see a rise in such trade-remedy actions under President Trump, especially if he is counselled against taking the more blatant route of imposing an all-out tariff wall. But we can also expect tit-for-tat counter-action of the same type by the affected countries, in a global spiral of protectionism.  That will be in nobody’s interest.

The new Trump presidency is also expected to usher in a major change in how the US (and eventually many other countries) will perceive free trade agreements.   Trump’s objection to the TTPA and NAFTA seems to be based on the issue of goods trade, that the template of these agreements seems to favour the exports of the partner countries at the expense of the US. Trump said he would instead “negotiate fair bilateral deals that bring jobs and industry back.”  This appears to be neo-mercantilist and against the free-trade principle, but it is this kind of “America-first” populism that helped propel him to power. If the new US policy moves in this direction, what is to prevent other countries from doing likewise?   “Free trade” or “fair trade” will be interpreted by each country in ways that favour it, and many of the present rules will have to be set aside. However the FTAs are much more than trade, and they became unpopular with the public in the US and elsewhere not only because of the threat of cheap imports taking over the market of local producers, but also because of the non-trade issues that are embedded in most recent FTAs, including FTAs between developed countries, and those between developed and developing countries. If the new US policy moves in this direction, what is to prevent other countries from doing likewise? “Free trade” or “fair trade” will be interpreted by each country in ways that favour it, and many of the present rules will have to be set aside.

One of these issues include investment rules aimed at liberalising foreign investment and financial flows, with an especially controversial section that gives rights to foreign investors to take cases and make claims against the host government in an international tribunal. Another issue is the strengthening of intellectual property rules that favour multinational companies at the expense of local consumers.  A most unpopular effect is a tremendous rise in the cost of some patented medicines through the additional curbing of competition from cheaper generic drugs. Other issues include the opening up government procurement to foreign firms on a national-treatment basis, thus reducing the share of local businesses in this huge sector;  the liberalisation of the services sectors, which for some countries may affect the cost of basic services that are normally performed by the public sector;  and, in the most recent FTAs, the establishment of new rules overseeing the policies and behaviour of state-owned enterprises.

The structure of this kind of North-South FTAs is mainly unfavourable to developing countries in general.  While a developing country can get some benefits on the trade component through better market access to the developed country, the non-trade issues are usually against their interests as the developed countries are far stronger and have the upper hand in the areas of investment, intellectual property, services and procurement. However, civil society groups in the developed countries also find the non-trade issues against the public interest.  For example, the investor-state dispute system undermines the ability of these countries to set their own environmental or health policies, and the tighter intellectual property rules impede access to medicines and knowledge in these advanced countries as well.

Through the recent FTAs, sensitive areas and issues that were previously under the purview of the national government are now subjected to new and intrusive rules that cramp the space that countries (whether in the South or North) normally have to set their own policies. Both the trade and non-trade issues have made the “trade agreements” highly controversial.  Civil society groups in developing countries have been expressing their concerns that the public interest and national sovereignty are being undermined. At the same time, the public in developed countries, including in the US, Europe, Canada, Australia, New Zealand and Japan, have become disillusioned and even outraged by the effects of the FTAs their governments signed or proposed.

The anti-FTA movement became so strong in the US that it helped boost the unexpectedly good showing by Bernie Sanders in the Democratic primaries, pressurised Hillary Clinton to pledge her opposition to the TPP, and enabled Trump to ride on and add to the “anti-trade” emotions in his  campaign. The heightened focus on trade policy during and after the US elections is a good time to review what works and what does not work for the public interest in trade agreements. It is becoming clear that trade agreements have become overloaded with many issues that do not  belong to an agreement originally designed for trade in goods. For example, there is a history and logic to the “non-discrimination” and “national treatment” principles established for trade in goods among countries, and even then there is a debate on the conditions under which the  application of these principles bring about mutual benefits  in trade. The same principles and template are often inappropriate when applied to non-trade issues for which they were not designed.  Creating rules based on these principles and including them in trade agreements can lead to imbalances and unequal outcomes among the partners, and even adverse consequences for all the partners. However in recent years the scope of trade agreements has grown to include more and more issues, to which the original trade principles have been applied, leading to more and more contention and unpopularity.

The overloaded agenda in FTAs gives trade a bad name, with people being confused between trade, trade policy and trade agreements.  Many people who are disgruntled with trade agreements also become unhappy with trade per se, and the benefits that trade can bring get mixed up with and overwhelmed by the contentious non-trade issues, and trade ends up being condemned as well. It is important, at this moment of an imminent Trump presidency, to clarify the difference between trade and trade agreements, and to review the whole issue of trade policy. A good outcome would be to design new agreements that are mutually beneficial in the trade aspect to all partners, whilst removing the controversial non-trade issues from the agenda.   And this could be part of a broader pro-development trade agenda. But this is not likely to be the new agreements being envisaged by the Trump team. The danger is that these may be even worse than the existing ones. We risk entering a new era where the US, and maybe some other developed countries as well,  are tempted to promote extreme trade protectionism, whilst retaining or expanding the unpopular non-trade issues in the trade agenda because it is in the interest of their corporations. We might end up with a new type of “America first” agreements, in which a Trump administration ensures that the US can curb imports whilst championing its exports, thus reducing the trade benefits to its partners; while at the same time strengthening the rules in non-trade issues like intellectual property and liberalising financial services that favour US corporations but are against the partners’ interests. That would be the worst of both worlds, at least for developing countries. It is thus crucial for policy makers and thinkers in developing countries to rethink what kind of trade is good for their economies, what kind of trade policy would correspond to that positive trade performance, and what kind of trade agreements would be good to have and which types should be avoided. It is also time to rethink the role of the World Trade Organisation and reaffirm the priority of developing a balanced and pro-development multilateral trading system.  If (and that is a big if) the WTO could evolve into such an ideal system, there would be no need or less need for bilateral trade agreements.

SOURCE: The IPS Agency

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