The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 16 FEB, 2019

NATIONAL

INTERNATIONAL

Cabinet approves continuation of Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) beyond 12th Plan for three years from 2017-18 to 2019-20

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved the Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) with a total outlay of Rs.2900 crore. This scheme aims at improving the competitiveness of MSMEs by integrating various ongoing schematic interventions aimed at up-grading technology through Credit Linked Capital Subsidy (CLCS), hand holding for zero defect zero effect manufacturing (ZED), increasing productivity through waste reduction (Lean), design intervention (Design), cloud computing (Digital MSMEs), facilitation of intellectual property (IPR) and nurturing new ideas (Incubation).Special provisions have been made in this scheme to promote entrepreneurship for SC/STs, women NER, Hill States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) Island Territories (Andaman & Nicobar and Lakshadweep) and the Aspirational Districts/ LWE Districts, as in these cases the subsidy shall be admissible also for investment in acquisition /replacement of plant & machinery / equipment & technology up-gradation of any kind. The scheme would be demand driven. But its coverage has been made more inclusive.In addition, the scheme through Zero Defect & Zero Effect, component will promote reduction in emission level of greenhouse gases and improve the competitiveness through reduction in defect / wastage during the manufacturing process of the products. It will also promote the innovation, digital empowerment of MSMEs, design interventions and support the protection of intellectual property of MSMEs.The scheme will facilitate technology up-gradation to MSEs, improvement in Quality of products by MSMEs, enhancement in productivity, reduction in waste and shall promote a culture of continuous improvement.

Source: PIB

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Cabinet to soon consider relaxing local sourcing norms for single brand retailers

The Cabinet is expected to soon consider a proposal of FDI-linked relaxation for mandatory 30 per cent local sourcing norms for foreign single brand retailers by allowing them more time to comply with regulations, sources said. The commerce and industry ministry have already circulated a draft cabinet note seeking views of different ministries including the department of economic affairs on the proposal, one of the sources said, adding that "after receiving the comments, the ministry would soon approach the cabinet for its consideration". With a view to attract big players such as iPhone maker Apple, as per the proposal, single-brand retail firms may be permitted to open online stores before setting up brickand-mortar shops if they bring in over USD 200 million foreign direct investment (FDI). But such firms would have to set up brick-and-mortar shops within two years of starting online sales. Currently, online sale by a single-brand retail player is allowed only after opening of physical outlet. Retail traders may also be allowed to adjust the incremental sourcing of goods from India for global operations during the initial 6-10 years, from the current five years (beginning April 1 of the year of the opening of first store), against the mandatory sourcing requirement of 30 per cent of purchases from India. These relaxations too would be subject to quantum of FDI one brings in India. While six years' time would be given to a retailer that invests USD 100 million in the sector, 8 years and 10 years’ time would be given to those who bring in USD 200 million and USD 300 million foreign inflows in the sector, respectively. In January 2018, the government allowed 100 per cent FDI in the sector, permitting foreign players in single-brand retail trade to set up own shops in India without government approval. That time, the government also relaxed mandatory local sourcing requirement of 30 per cent by stating that a foreign retailer would be able to get credit from incremental rise in sourcing for its global operations from India towards the mandatory 30 per cent local sourcing requirement for its business in the country. In 2016, Apple India had sought relaxation in the local sourcing norms to set up single brand retail stores in India. During April-September 2018-19, FDI in India declined by 11 per cent to USD 22.66 billion.

Source: Economic Times

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Measures soon to boost textiles exports: Official

The Centre will soon announce measures to boost exports of apparels and textiles which will be compliant with the World Trade Organization norms and help exporters meet competition from countries such as Bangladesh and Vietnam. “Our exporters of apparels and made-ups have been finding it difficult to compete with countries such as Bangladesh and Vietnam, which get zero-duty access to markets such as the EU. Over the last few months, we have held discussions with the Departments of Commerce and Revenue and we will shortly come up with some measures for the sector which would also be WTO-compliant,” Raghvendra Singh, Secretary, Ministry of Textiles, said at a press conference on Wednesday. Singh said ensuring that export schemes were WTO-compliant was an important issue now and the Ministry was working on the recommendations of the committees set up to examine WTO compatibility of schemes.The Textiles Secretary, however, did not clarify on how long the popular Merchandise Export from India Scheme (MEIS), which is one of the five schemes challenged by the US at the WTO, will continue. The US wants India to do away with the scheme as the country had crossed the average per capita income level of $1,000 some time back and was no longer eligible to give export sops.Singh also indicated that the Rebate of State Levies (RoSL) scheme could be expanded to increase the level of benefits to exporters. The RoSL does not flout global trade rules as it involves refund of taxes and levies paid by exporters and is not a subsidy. Cabinet approves continuation of Credit Linked Capital Subsidy and Technology Up-gradation Scheme (CLCS-TUS) beyond 12th Plan for three years from 2017-18 to 2019-20Indo-US talks: Jobs, tech transfer top agenda; ecommerce, tariffs skipped.

Source: Economic Times

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Scope for Indian companies to increase supplies to UN

India’s share as a supplier is over $900 million. Indian companies stood to benefit in more ways than one by becoming suppliers, of both products and services, to the United Nations and its agencies. The multi-million-dollar annual business opportunity that existed apart, what would benefit them eventually would be fine-tuning their operations to conform to the norms mandated by the UN for the suppliers. This was a message speaker sought to underscore at a seminar on ‘Business opportunities with the United Nations’ here on Thursday while pointing out that India’s share as a supplier was a little over $900 million of the over $18 billion total procurement by the UN and the agencies in 2017. Addressing the programme, organised by trade and industry body FTAPCCI, Senior Procurement Officer of the UN Procurement Division Bruno Maboja said the $900 million is the value of the products and services provided by the Indian companies. “Lot of Indian goods are supplied to the UN but not by companies from India. You have middlemen who come all the way from Europe, China, they come to India -- get the goods -- and supply to the UN,” he said. The reason we are here, he told the gathering comprising representatives of various companies, “is because you are capable of supplying goods to the UN directly for the benefit of the country. Why should somebody else come and get them from India and pay you very little and supply to the UN at a higher price? We are interested in getting them at a cheaper price from you directly… it is a fair deal to you also if we come to you directly,” Mr. Maboja said. Of the over $18 billion total procurement, the value of supplies made by UN Procurement Division was a little over $3 billion. Industries and IT Secretary Jayesh Ranjan urged the companies to educate themselves about the procedures involved in becoming suppliers to the UN and its agencies. “You need to be very ethical in your dealings,” he added. The Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry, he said, should set up a help desk or a cell to keep track of the UN tenders and procurement requirements and inform the prospective exporters. He suggested that the UN consider Hyderabad for setting up a regional procurement centre. Regional Passport Officer and Head of MEA Branch Secretariat in Hyderabad E.Vishnu Vardhan Reddy said India is the one the leading suppliers to UN and the major exports from the country are pharmaceuticals, contraceptives and vaccines.

Source: The Hindu Business Line

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Banks step up lending to corporates

Power, roads and ports, as well as services sectors get a fillip. India’s business environment appears to be turning positive with an increase in corporate loans being extended by major banks. The growth in corporate lending, which started from the beginning of the current financial year and has been described as ‘green shoots’ by experts, now appears to have gained ground, going by the third quarter numbers of major lenders. State Bank of India reported a 20.67 per cent growth in total corporate lending at ₹7.74 lakh crore as of December 31, 2018, against ₹6.42 lakh crore in the same period last year. In the third quarter of last fiscal, SBI’s corporate credit was muted compared to the previous fiscal. But this year, the scenario has improved. For the last couple of years, corporate loan growth has been almost flat for many banks. “The drivers for corporate growth are power, roads and ports, as well as services,” said a senior SBI executive. There was higher traction in government undertakings, he added. Corporate slippages for banks continued to decline, and slippages from the watch list are not significance any longer. Other banks also witnessed a similar increase in various segments of corporate advances. Punjab National Bank saw a 28 per cent growth in medium enterprise loans, while ICICI Bank witnessed “continued growth” at 10 per cent in domestic corporate lending, excluding restructured loans, among others. Canara Bank, too, posted over 7 per cent increase in corporate portfolio. The RBI’s data on sectoral deployment of bank credit, as of December 2018, also point to an increase in credit to industry. Credit to industry rose by 4.4 per cent in December 2018, compared to an increase of 2.1 per cent in December 2017. “Credit growth to infrastructure, chemical and chemical products, all engineering, vehicles and petroleum, coal products and nuclear fuels accelerated,” the RBI said in its report. However, credit growth to basic metal and metal products, textiles, food processing, and gem and jewellery saw deceleration.

Non-food credit

On a year-on-year basis, non-food bank credit increased by 12.8 per cent in December 2018, against an increase of 10.0 per cent in December 2017. The stabilisation of Goods and Services Tax (GST), waning of adverse impact of demonetisation, among others, have been positive for gross capital formation in the economy, and there is more propensity to investments in some sectors, say experts.

Source: The Hindu Business Line

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Textiles Ministry sets up Centres of Excellence for G.I. Products

The Ministry of Textiles, in close collaboration with state Governments and district administration, strove to achieve the targets in respect of various deliverables. Weavers’ Service Centres (Field Office for Handlooms) was designated as supervising agency for effective coordination with banks, district administration and weavers. Addressing a press conference in New Delhi, Secretary Textiles, Raghvendra Singh, said that special focus was deliverables in the districts of Arunachal Pradesh, Assam, Mizoram and Manipur. In several districts, the deliverables were substantial, for example coverage of almost cent percent in each district. Specially for the weavers, yarn-passbooks have been distributed which make available the required yarn to them at subsidies rates. The marketing events organised in these districts generated substantial sales during the 100-day period for the artisans and weavers.Raghvendra Singhtold mediapersons that quality certification is a requirement before e- commerce. Apart from the awareness campaign, around 53,000 labels were issued, applications received and registrations done under the Handloom Brand. Similarly, weavers and artisans were also enrolled under the social security insurance scheme. To increase the earnings of the weavers and artisans the Promotion Council for Handlooms and Handicrafts signed MOUs with Weavers’ Societies and artisans from amongst the focus district of MSME outreach programme for promoting exports through design, skill and such other interventions. Textiles Secretary informed that Centres of Excellence, comprising 55 display outlets have been set up in Varanasi for the sale of products which are G.I. tagged. Similarly, children have been facilitated in various districts to avail of the learning opportunities through IGNOU and NIOS wherein the Textile Ministry provide 75% of the cost for girls and children belonging to SC,ST and BPL categories. Tufting frames and carpet looms have been provided to Carpet weavers of Bhadohi in UP. The Secretary further told thatMinistry of Textiles has entered into agreement with prominent garmenting companies of India for placing orders with clusters of weavers through the handloom verticals of these companies. Orders are being placed with the Ministry catalysing these orders, handholding the weavers in terms of providing common facilities, tool kits and yarn at subsidised rates to cut down the cost of production which is impacting the income of weavers greatly, enhancing it substantially.

Source: PIB

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Ending MFN status for Pakistan an unprecedented move, say trade officials

Revoking the MFN status India granted to Pakistan back in 1996 has been argued as a plausible way of sending a strong message to the country. With India exploring every possible way to respond to Pakistan in the wake of the horrific terror attack in Pulwama in Jammu and Kashmir that claimed the lives of 40 CRPF personnel, Commerce Department officials said the country was within its rights to launch an economic offensive against its neighbour and revoke Pakistan’s Most Favoured Nation (MFN) status. India has considered revoking Pakistan’s MFN status twice — after the attacks at Uri and Pathankot. Now, New Delhi is also considering suspending trade ties with Pakistan, officials said. According to government officials, India is not even required to inform the World Trade Organisation (WTO) about its decision to revoke Pakistan’s MFN status, and that a notification to the effect would be out soon. Revoking the MFN status, which was granted to Pakistan in 1996, will allow India to put higher import duties on Pakistani goods. While India does not figure in the top 10 export destinations for Pakistani goods, it serves as a crucial channel for select goods such as leather hides and cheaper variants of fertilisers that are generally procured by importers at short notice. On the other hand, any decision to stop exports to Pakistan is likely to affect the neighbouring country’s cotton industry which relies on cotton bales from India. Pakistan has also come to depend upon cheaper varieties of Indian pharma products and machinery that are difficult to source from elsewhere. The MFN status is governed by the WTO’s General Agreement on Tariffs and Trade (GATT). Countries that are signatory to the agreement agree not to discriminate against each other and the rest of the WTO member countries. This means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services for all its trading partners. Ever since it was established, the MFN clause has worked as a bulwark against dubious and partial trade practices and promoted free trade. While economic sanctions are likely to have little effect on Pakistan owing to the small amount of bilateral trade between the two nations, revoking the MFN status has found more support. However, officials pointed out that the move was unprecedented since the measure is used to justify economic wrongs, and not political ones. "Revoking the MFN status is frowned upon in multilateral trade forums as countries tend not to revoke the MFN in cases other than economic hostility by a trade partner,” a senior Commerce Department official said. “Since India cannot complain of harmful trade practices by Pakistan in recent times, revoking the status may make it difficult to explain India’s position to the global community,” the official added. However, the fact that Pakistan has never reciprocated by granting India MFN status will strengthen India’s position, he said.

Other options

In fact, India is mulling the option of dragging Pakistan to the dispute settlement body of the WTO because of this. However, Islamabad could cite ‘security exceptions’ through which a member-country may not grant MFN to another member on grounds of security, a diplomatic source said. In 2017-18, bilateral trade between India and Pakistan stood at $2.4 billion, which is just 0.3 per cent of India’s overall merchandise trade. While India’s exports to Pakistan was $1.9 billion, or 0.63 per cent of its total exports, the imports from Pakistan amounted to $488 million, or 0.10 per cent of India’s total inward shipments. Indian exports to Pakistan include cotton, organic chemicals and plastics, among others, while mineral fuels, edible nuts and plastering materials account for its top imports from that country. Though India does not restrict imports from Pakistan, its exports across 1029 tariff lines and including textile, auto and agro products, have restricted entry into that country. Reacting to India striking down Pakistan’s MFN status, the PHD Chamber of Commerce and Industry said it was willing to sacrifice trade with Pakistan in the interest of the country. The chamber, which includes many exporters to Pakistan who trade through the overland Punjab routes, said exports can be increased, but only when the situation between the two countries normalises.

Source: Business Standard

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High Level Delegation to Visit Saudi Arabia

A High-level delegation, led by NITI Aayog CEO Shri Amitabh Kant, will be visiting Saudi Arabia from 16th to 17th February 2019 to participate in extensive discussions with the Saudi Centre for International Strategic Partnerships (SCISP) in Riyadh. The visit will serve as aprecursor to the forthcoming visit of HRH Mohammed bin Salman bin Abdulaziz Al Saud, the Crown Prince, Vice President of the Council of Ministers and Minister of Defence of the Kingdom of Saudi Arabia. The delegationwill comprise of senior officials from the Ministries of Housing and Urban Affairs, Electronics and Information Technology, Tourism, and Commerce and Industry. It will also include CEOs of leading Indian companies. The discussionswith the Saudi Arabian leadership will showcase the economic opportunities that Indiapresentsfor investment and explore pathways to further strengthen the economic pillar of the India – Saudi Arabia strategic partnership. India – Saudi Arabia bilateral trade during April to November 2018 reached USD 23.24 billion, and is poised to reach greater heights post the visit of the Crown Prince between 19-20th February, which follows the highly successful visit of Prime Minister Shri Narendra Modi to Saudi Arabia in April 2016. During his forthcoming visit, HRH the Crown Prince of Kingdom of Saudi Arabia will call on the President and Vice President, and also participate in bilateral talks on a wide range of issues of mutual interest.

Source: PIB

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Global Textile Raw Material Price 2019-02-14

Item

Price

Unit

Fluctuation

Date

PSF

1324.74

USD/Ton

0%

2/14/2019

VSF

1993.02

USD/Ton

0%

2/14/2019

ASF

2381.86

USD/Ton

0%

2/14/2019

Polyester POY

1261.90

USD/Ton

0%

2/14/2019

Nylon FDY

2750.01

USD/Ton

0.54%

2/14/2019

40D Spandex

4731.20

USD/Ton

0%

2/14/2019

Nylon POY

2528.24

USD/Ton

0%

2/14/2019

Acrylic Top 3D

1463.72

USD/Ton

0%

2/14/2019

Polyester FDY

3001.36

USD/Ton

0%

2/14/2019

Nylon DTY

5573.95

USD/Ton

0%

2/14/2019

Viscose Long Filament

1537.64

USD/Ton

0%

2/14/2019

Polyester DTY

2557.81

USD/Ton

0%

2/14/2019

30S Spun Rayon Yarn

2720.44

USD/Ton

0%

2/14/2019

32S Polyester Yarn

2003.37

USD/Ton

0%

2/14/2019

45S T/C Yarn

2853.51

USD/Ton

0%

2/14/2019

40S Rayon Yarn

2513.45

USD/Ton

0%

2/14/2019

T/R Yarn 65/35 32S

2158.61

USD/Ton

0.69%

2/14/2019

45S Polyester Yarn

2528.24

USD/Ton

0%

2/14/2019

T/C Yarn 65/35 32S

3016.14

USD/Ton

0%

2/14/2019

10S Denim Fabric

1.36

USD/Meter

0%

2/14/2019

32S Twill Fabric

0.83

USD/Meter

0%

2/14/2019

40S Combed Poplin

1.11

USD/Meter

0%

2/14/2019

30S Rayon Fabric

0.65

USD/Meter

0%

2/14/2019

45S T/C Fabric

0.70

USD/Meter

0%

2/14/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14785 USD dtd. 14/2/2019). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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European Parliament endorses free trade agreement with Singapore

The European Parliament approved on Wednesday (13 February) the EU-Singapore Free Trade Agreement (EUSTFA), the bloc’s first bilateral trade agreement with a southeast Asian country. The trade deal removes all existing tariffs on goods from the EU, removes trade barriers by recognizing EU safety tests and will make the business environment more predictable, according to the European Commission. The trade agreement provides new opportunities for Europeans in sectors such as telecommunications, environmental services, engineering, computing and maritime transport. It will also make the business environment more predictable. Singapore also agreed to remove obstacles to trade besides tariffs in key sectors, for instance by recognising the EU’s safety tests for cars and many electronic appliances or accepting labels that EU companies use for textiles. In addition, the investment protection agreement will include an Investment Court System for resolving investment disputes. There are more than 10,000 European companies in Singapore with total bilateral trade in goods of over €53 billion and €51 billion-worth of trade in services. Singapore is the number one location for European investment in Asia, according to the Commission. Besides the Free Trade agreement, there is the EU-Singapore Investment Protection agreement, which replaces already standing treaties, and the EU-Singapore Partnership and Cooperation agreement which is designed to reinforce the existing relationship between the two governments. The Investment treaties will be replaced by a modern common investment protection framework and the Partnership agreement sets sustainability and trade standards. “This is yet another win-win trade agreement negotiated by the European Union, an agreement that will create new opportunities for European producers, workers, farmers and consumers, while at the same time promoting cooperation and multilateralism,” Commission President Jean-Claude Juncker said in a press release. This new agreement was praised by EuroCommerce which noted the quick evolution and development of Singapore resulting from free trade. “The European Parliament’s approval today opens a further avenue for mutual benefit through open and free markets, and confirms the EU as a promoter of the world trading system where important partners seem to be turning away from it,” said Director-General of EuroCommerce, ChristianVerschueren. The Greens/EFA party was less enthusiastic, saying that the Commission was putting profit over people. “The EU is relying on old mistakes around investment protection and prioritising large foreign investors, while small and medium-sized enterprises are left behind in Singapore,” said Heidi Hautala, Vice-President of the Greens/EFA Group. “It’s very regrettable that the European Commission has pushed through privileged investor protection.” After the vote today, the EU member states need to ratify the agreement and is also waiting for Singapore’s procedures to conclude for the deal to go into force. The Singapore Embassy in Brussels was not immediately available for comment. The EU had signed trade agreements with South Korea, Canada, Mexico and Vietnam, and is currently negotiating with Australia, New Zealand and Mercosur countries.

Source: Euractiv

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UK, Switzerland sign trade continuity agreement

The United Kingdom and Switzerland recently signed in Bern an agreement to simplify trade and allow businesses to continue trading freely without additional tariffs. It continues the elimination of duties on most goods traded. Liam Fox, British secretary of state for international trade, signed the agreement with Swiss federal councillor Guy Parmelin. British businesses and consumers will benefit from continued trade with Switzerland after the United Kingdom leaves the European Union, according to a UK Government press release. Business groups, including the British Swiss Chamber of Commerce (BSCC), have welcomed the development, saying it will help support jobs and ensure businesses can keep trading without disruption. Trading on these preferential terms rather than on World Trade Organization terms will deliver significant savings and help to safeguard British jobs, the UK Government feels. Trade between both the countries was worth £32.1 billion in 2017. British consumers will continue to benefit from more choice and lower prices on goods imported from Switzerland, such as clocks, watches, and pharmaceutical products.

Source: Fibre2Fashion

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Indonesia, Australia to sign trade deal in March: trade minister

Indonesia is to sign a trade and investment partnership deal with Australia in March, Indonesia's trade minister said on Thursday, three months later than expected and following diplomatic friction between them over Middle East policy. Trade Minister Enggartiasto Lukita told reporters that the Indonesia-Australia Comprehensive Economic Partnership Agreement would be signed at an Indonesia-Australia business conference. Negotiations on the deal were concluded last August and it had been due to be signed by the end of 2018. But Australia's recognition of West Jerusalem as Israel's capital strained relations with Indonesia, which is the world's biggest Muslim-majority country and supports a two-state solution to the Middle East dispute. Australia's trade minister, Simon Birmingham, had played down the issue and cited translation glitches as cause of the delay in signing the deal. The neighbours have been in talks on trade since early in the decade, with diplomatic tension occasionally stalling the process. Though neighbours, the two are not top trade partners. Australia valued trade between them at A$11.2 billion ($7.96 billion) in 2017-2018, with Indonesia being its eighth largest source of imports, while Australia is Indonesia's 14th largest export destination.

($1 = 1.4075 Australian dollars)

Source: Business Standard

Brexit could be good news for textile industry, says Eastwood firm

A successful textile business in Eastwood has told the town’s MP that Brexit could be good news for its ‘back British’ message. Shane Fitzgerald, joint boss of Fitzmark Cutting Services, believes the UK’s exit from the European Un might provide an opportunity for the textile industry to return to the Nottinghamshire area from overseas. As MP Gloria De Piero visited Fitzmark’s headquarters, he said: “We are keen to win more business from British companies, so that we can grow and train more textile cutters. “We have the knowledge and the skills here to go back to manufacturing if we get the work. “We have about 80 years’ worth of textile-cutting knowledge, handling a wide range of fabrics and ma and we don’t want to lose those skills.” Fitzmark, based on Nottingham Road, oers specialist textile-cutting services for children’s clothing, sportswear, knitwear, military body armour, dancewear, hosiery and other garments. Ms De Piero made her visit to nd out more about the work the company does and to learn about th owners’ hopes for the future. Shane and his business partner, Mark Skull, have vast experience in textiles, which was once one of Nottinghamshire’s biggest industries but has now all but disappeared. The MP said: “It was really interesting to look round Fitzmark and to see what the company does. “I had no idea that this textile-cutting business even existed, given that it is hidden behind the Fitzma Workwear shop, which is also owned by Shane and Mark. “It would be great to see British clothing companies coming to Fitzmark and wanting to work with the use their expertise. “I, and they, would love to see young people being trained in textile cutting before it becomes a lost this area.” Fitzmark already has strong links to British firms. It cuts the fabric for baby clothes that are sold in Selfridges stores across the country and for sportswear for Scottish football champions Celtic and other sports clubs. It is also part of the Made In Britain Collective, which showcases the excellence of British craftsmanship.

Source: Eastwood Advertiser

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Cambodia will not die if EU withdraws EBA trade preferences: PM

Cambodian Prime Minister Samdech Techo Hun Sen said on Thursday that the country will not die if the European Union suspends the Everything But Arms (EBA) trade preferences for the kingdom. "No matter whether it is suspended or not, the suspension of the EBA trade preferences, that will be known in 18 months, will not lead us to die," he said during the closing ceremony of the Interior Ministry's annual conference. "We must not exchange our sovereignty for any aid," the Cambodian prime minister said. Meanwhile, Hun Sen unveiled a series of "sharp and deep" reforms to strengthen economic independence and support businesses in case the EU withdrew the EBA from the country. He said the measures included cancellation of certificates of origin (CO), pullout of Cambodia Import Export Inspection and Fraud Repression (CamControl) unit from all border checkpoints, removal of the Kampuchea Shipping Agency and Brokers (Kamsab) officers from all ports, reduction of fees on inspection of cargo containers by scanning machines, and cut of the fees for getting customs papers stamped. He added that the government will also provide fiscal incentives for small- and medium-sized enterprises. "With our ongoing sharp and deep reforms, we believe that investment environment in Cambodia will be better and more attractive to local and foreign investors and business people," Hun Sen said. He added he will meet with business leaders in March during a government-private sector forum to discuss these issues. According to Hun Sen, Cambodia's economic growth was 7.5 percent in 2018, the highest rate in the last decade. His remarks came after the EU began on Tuesday the 18-month process that could lead to the temporary suspension of Cambodia's duty-free trading access to the EU market under the EBA scheme due to concerns over human rights and labor rights. EU is a major trading partner for Cambodia, especially for textiles and footwear sector. As a Least Developed Country, Cambodia has enjoyed exports of all products, except arms and ammunition, to the EU market with zero percent tariff since 2001. According to an EU data, the Southeast Asian nation exported products to the bloc worth about 4.9 billion euros in 2018. The Garment Manufacturers Association in Cambodia (GMAC) said on Monday that a suspension of EBA would increase tariffs by 12 percent in the garment sector and by 8 to 17 percent for footwear.

Source: Xinhua

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