INTERNATIONAL
Textile Raw Material Price 2015-05-18
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1284.42 |
RMB/Ton |
-1.26% |
5/18/2015 |
|
VSF |
2045.25 |
RMB/Ton |
0% |
5/18/2015 |
|
ASF |
2499.30 |
RMB/Ton |
0% |
5/18/2015 |
|
Polyester POY |
1333.50 |
RMB/Ton |
-2.98% |
5/18/2015 |
|
Nylon FDY |
3141.50 |
RMB/Ton |
0% |
5/18/2015 |
|
40D Spandex |
6544.80 |
RMB/Ton |
0% |
5/18/2015 |
|
Nylon DTY |
3386.93 |
RMB/Ton |
0% |
5/18/2015 |
|
Viscose Long Filament |
5939.41 |
RMB/Ton |
0% |
5/18/2015 |
|
Polyester DTY |
1628.02 |
RMB/Ton |
-1.49% |
5/18/2015 |
|
Nylon POY |
2945.16 |
RMB/Ton |
0% |
5/18/2015 |
|
Acrylic Top 3D |
2694.82 |
RMB/Ton |
0% |
5/18/2015 |
|
Polyester FDY |
1554.39 |
RMB/Ton |
-2.06% |
5/18/2015 |
|
30S Spun Rayon Yarn |
2732.45 |
RMB/Ton |
0% |
5/18/2015 |
|
32S Polyester Yarn |
2061.61 |
RMB/Ton |
0% |
5/18/2015 |
|
45S T/C Yarn |
2994.25 |
RMB/Ton |
0% |
5/18/2015 |
|
45S Polyester Yarn |
2208.87 |
RMB/Ton |
0% |
5/18/2015 |
|
T/C Yarn 65/35 32S |
2568.83 |
RMB/Ton |
0% |
5/18/2015 |
|
40S Rayon Yarn |
2896.07 |
RMB/Ton |
0% |
5/18/2015 |
|
T/R Yarn 65/35 32S |
2765.18 |
RMB/Ton |
0% |
5/18/2015 |
|
10S Denim Fabric |
1.15 |
RMB/Meter |
0% |
5/18/2015 |
|
32S Twill Fabric |
1.00 |
RMB/Meter |
0% |
5/18/2015 |
|
40S Combed Poplin |
1.36 |
RMB/Meter |
0% |
5/18/2015 |
|
30S Rayon Fabric |
0.78 |
RMB/Meter |
0% |
5/18/2015 |
|
45S T/C Fabric |
0.79 |
RMB/Meter |
0% |
5/18/2015 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16362 USD dtd. 18/05/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The country’s largest polyester manufacturer Indo Rama Synthetics posted a net profit of ₹30.84 crore for the quarter ended March 2015, but in fiscal 2014-15 it suffered a net loss of ₹21.53 crore. The company’s annual net loss in 2014-15 was more than double the net loss of ₹8.18 crore suffered in the previous fiscal. In the fourth quarter of 2013-14, Indo Rama had posted a net loss of ₹14.17 crore. According to the company, things are now turning around for the polyester industry which has been fighting raw material shortage, inventory losses due to fall in crude prices and an adverse global market situation for the past many months. “With the lower prices for raw material and finished goods and [an] increase in demand, we are achieving higher capacity utilisation. We are quite buoyant that the overall positivity in the market sentiment and demand will help the company get back on the growth trajectory in the current financial year,” OP Lohia, Chairman and Managing Director, Indo Rama Synthetics (India) Ltd, said in a release. The company’s net revenue in the fourth quarter of 2014-15 stood at ₹650.73 crore against ₹695.46 crore in the fourth quarter of the previous year. The operational EBIDTA (earnings before interest, taxes, depreciation, and amortisation) for the period stood at ₹51.40 crore compared to a loss of ₹0.24 crore for the corresponding quarter in the previous year. The cash profit for the fourth quarter of 2014-15 was ₹68.61 crore against ₹43.68 crore in the corresponding quarter of the previous year. For the fiscal ended March 31, 2015, the net revenue was ₹2,761.38 crore against ₹2,637.45 crore in the previous year.
SOURCE: The Hindu Business Line
Industry body Assocham has launched its US Chapter to strengthen trade and business ties. Based in New York, the US Chapter has been set up under the aegis of the recently-formed Assocham Global Investors’ India Forum. On the occasion of the US Chapter’s launch, Assocham President Rana Kapoor made a presentation on ‘Make in India – Pressing the Pedal’. The Chapter seeks to strengthen the India-US trade and investment corridor and establish a strong relationship with US-based investors and companies.
SOURCE: The Hindu Business Line
China’s Guizhou International Investment Corporation will invest $500 million to develop an industrial park at the Kakinada SEZ, a subsidiary of GMR Infrastructure Ltd. Kakinada SEZ President Challa Prasanna and senior officials of GIIC signed an MoU in the presence of the Prime Minister during Narendra Modi’s China tour. A consortium of leading Chinese manufacturing companies, GIIC plans to bring to the 2,000-acre industrial park a number of Chinese manufacturers of power equipment, electronics items, wind and and solar energy gear. These Chinese companies are expected to invest $2-3 billion over the next five years. “Through this MoU with GIIC, we were not only able to attract investments, but also provide economic development to the region and the State. As a leading infrastructure company, we were able to foster global partnerships,” said BVN Rao, Business Chairman (Transportation & Urban Infrastructure), GMR Infrastructure Ltd. This industrial park is expected to ensure development around Kakinada and generate more than 5,000 jobs for both skilled and unskilled workers. Apart from infrastructure, the Chinese companies will also be able to benefit from the Prime Minister’s ‘Make in India’ campaign and the Andhra Pradesh Government’s investment incentives in the ‘Sun-rise State’. The multi-product Kakinada SEZ is spread over 10,500 acres, and is located in an area rich in oil and natural gas deposits.
SOURCE: The Hindu Business Line
Government of India would establish a Korea Plus channel to facilitate South Korean investment and operations in India. This was disclosed by visiting Indian Prime Minister Narendra Modi at a joint press briefing with Korean President Park Geun-hye. “We had extensive discussions on our economic relations,” and “President Park and I see vast opportunities for Korean companies to participate in our ‘Make in India’ mission,” said Modi. Stating that many Korean brands are household names in India, Modi said Korean companies have the edge to succeed in India. Both leaders shared the view that India-Korea bilateral trade is modest and well below its potential. They agreed to review the Comprehensive Economic Partnership Agreement and other market access related issues. Later, speaking at the India-Republic of Korea CEOs Forum, Modi said Korea Plus will be a dedicated mechanism for hand holding of Korean investors. Modi also assured the CEOs of his personal attention if there are any issues.
During the visit, both nations signed 7 agreements/MoUs in various areas. These include an agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. Under this, India-Republic of Korea Double Taxation Avoidance Convention, signed in 1985, has been revised with a view to avoiding the burden of double taxation on taxpayers in the two countries.
SOURCE: Yarns&Fibers
India and South Korea today signed a revised double taxation avoidance pact and agreed to begin talks from mid next year to widen the scope of free trade pact to boost bilateral economic cooperation. Prime Minister Narendra Modi held a summit meeting here with South Korean President Park Geun-hye. The two leaders also called upon the business community from India and Korea to leverage the enormous synergies between their economies for mutual prosperity. They welcomed "commencement of negotiations to amend the India-Korea CEPA by June 2016 with a view to achieving qualitative and quantitative increase of trade through an agreed roadmap," a joint statement issued after the meeting said.
India and South Korea had implemented the free trade pact, Comprehensive Economic Partnership Agreement (CEPA), in January 2010. The statement further said the leaders also welcomed "signing of the revised Double Taxation Avoidance Agreement (DTAA)". The existing DTAA came into effect in 1986. Modi in his remarks said "we will also establish a channel - Korea Plus - to facilitate their investment and operations in India". Both the leaders shared the view that the trade between the two nations is well below potential. "We agreed to review the Comprehensive Economic Partnership Agreement and other market access related issues. I conveyed our desire to see a balanced and broad-based growth in bilateral trade," Modi added.
The bilateral trade is in favour of South Korea. Trade deficit increased from USD 5.1 billion in 2009-10 to USD 8.27 billion in 2013-14. The Ministry of Strategy and Finance and the Export- Import Bank of Korea expressed their intention to provide USD 10 billion for mutual cooperation in infrastructure, the statement said. Of the USD 10 billion, USD 9 billion would come as export credit for priority sectors, including smart cities, railways, while USD 1 billion would be Economic Development Cooperation Fund. The statement further said that the two governments and the EXIM Banks of the two countries will hold consultations to chalk out a roadmap in order to materialise the envisioned financial support for priority sectors.
Companies of the two countries have interest in cooperation in the area of ship-building, including construction of Indian vessels such as LNG carriers. "The Indian government expressed its hope to discuss partnership with Korea with an aim to modernise the Indian shipbuilding industry," the joint statement said. The two governments decided to provide support for facilitating private sector discussion on ways to co-operate in this area. A Joint Working Group that includes the government and private sectors of the two countries will be established to facilitate co-operation in the shipbuilding sector. The leaders also discussed the progress made in establishing Korean Industrial Park in Rajasthan. "They agreed that the Industrial Park will help Korean small and medium enterprises to benefit from 'Make in India' initiative," the statement said. The leaders shared the same view that it is desirable to establish more offices of both countries' respective trade agencies to facilitate trade, investment and industrial cooperation between the two countries. The first meeting of the Korea-India CEO Forum will be held in Seoul on May 19, 2015.
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 64.79 per barrel (bbl) on 18.05.2015. This was higher than the price of US$ 64.45 per bbl on previous publishing day of 15.05.2015.
In rupee terms, the price of Indian Basket increased to Rs 4117.40 per bbl on 18.05.2015 as compared to Rs 4097.73 per bbl on 15.05.2015. Rupee closed stronger at Rs 63.55 per US$ on 18.05.2015 as against Rs 63.58 per US$ on 15.05.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on May 18, 2015(Previous trading day i.e. 15.05.2015) |
Pricing Fortnight for 16.05.2015 (April 29 to May 13, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
64.79 (64.45) |
64.51 |
|
(Rs/bbl |
4117.40 (4097.73) |
4115.09 |
|
|
Exchange Rate |
(Rs/$) |
63.55 (63.58) |
63.79 |
SOURCE: PIB
Developing countries in Asia became the world’s largest source of foreign direct investment (FDI) last year, overtaking the United States which remained the biggest single investor country. Developing countries in Asia invested $440 billion abroad last year, eclipsing North American outward investment of $390 billion and $286 billion coming from Europe, a survey by the UN trade and economic thinktank UNCTAD showed on Monday. Global FDI outflows were estimated at $1.341 trillion last year, a 6.2 per cent increase from 2013. FDI includes mergers and acquisitions abroad and foreign start-up projects, as well as money pumped into or out of such projects by owners overseas. FDI flows can signal economic confidence and may be a precursor to greater trade. US firms invested $337 billion in 2014, 3 per cent more than in 2013. Hong Kong and China were second and third largest investors, spending $150 billion and $116 billion respectively.
China overtook the United States to become the top destination for FDI in 2014, according to UNCTAD’s survey of FDI inflows, published in January. FDI inflows into China reached $128 billion last year, while net US inflows fell by two-thirds to $86 billion, dragged down by a deal between US firm Verizon Communications Inc and its British partner Vodafone that reversed $130 billion of FDI out of the United States. Chinese firms now invest almost as much overseas as foreign firms do in China, marking a huge shift over the past decade. In 2004, FDI inflows into China were 11 times greater than outflows. But the complexion of FDI investments by firms from China, Hong Kong and other developing economies was very different to US or European FDI, the survey showed.
Most of the FDI coming from developing countries went into mergers and acquisitions, whereas 81 per cent of the FDI from developed countries consisted of earnings reinvested in existing investments. In 2014, China’s FDI spend was just ahead of Japan’s $114 billion and Germany’s $112 billion. Japanese investments fell after a three-year increase, continuing in North America but declining sharply in Asia and Europe, UNCTAD said.
SOURCE: The Hindu Business Line
Foreign textile and garment firms to enjoy a zero percent import tax rate under the commitments of free trade agreements (FTA) such as the Trans-Pacific Partnership Agreement, the EU-Vietnam FTA, and the South Korea-Vietnam FTA are moving is full swing with plans to build production facilities in ahead of FTAs in Vietnam. Nguyen Duc Tiep, deputy head of the Quang Ninh Provincial Investment Promotion Agency’s Investment Promotion Division, said that Hong Kong’s Texhong Group is nearing completion of its second production factory worth over $200 million located within the $953.6 million, 3,300 hectare Hai Ha Industrial Park,. It is also under the group’s construction. With the park and factory likely to come into operation within the coming months. Texhong is calling upon many fabric and textile investors from Hong Kong to invest into the park and supply materials for its two factories, Tiep said. Texhong’s first textile factory was worth over $200 million, has already been operating at the province’s Hai Yen Industrial Park for several years. The Group plans to build a power plant at the park to supply sufficient power to the textile and garment factories there. Another Hong Kong-backed firm, Black Peony, is plans to build a $100 million worth jean cloth production facility in this park.
Under the Trans-Pacific Partnership agreement (TPP), apparel tariffs are likely to be eliminated over the course of five to eight years. However, some tariffs will be eliminated immediately. In addition, Hong Kong’s Luenthai has also co-operated with Vietnam National Textile and Garment Group and China’s Jialida to build a $400 million industrial textile and garment park in the northern province of Nam Dinh on a 1,500ha site. Last month, Hong Kong-backed Huafa’s $136 million project to build a 20ha textile factory was approved by the Mekong Delta province of Long An. In the meantime, Singapore’s Huntsman will inaugurate a new bonded warehouse with the capacity of 250 tonnes of dyes and chemicals near Ho Chi Minh City later this month. Paul Hulme, president of Huntsman Textile Effects said that Vietnam’s market is moving fast and there are a lot of investments being made in anticipation of the potential TPP. The company has a vision to thrive within the market, making Vietnam one of their biggest investments and an important market in their global business plan.
Another major investor in this sector is Hyosung Dongnai Company, which was granted an investment certificate last week to develop a $600 million fibre production project in the southern province of Dong Nai’s Nhon Trach 5 Industrial Zone. The facility will be built on a 22ha site, bringing the company’s total area up to 90ha. Hyosung has been operating in Dong Nai for over seven years with two projects worth $995 million, namely Hyosung Dong Nai and Hyosung Vietnam. Nguyen Viet Ha, managing director of US-backed investment consultant BowerGroupAsia Inc, said that many South Korean and Thai enterprises were also eagerly scampering for a share in Vietnam’s textile and garment industry, thanks to upcoming benefits from the FTAs.
Thailand, one of the region’s garment and textile leaders, with its main export markets in Europe and North America. The Thailand Garment Manufacturers’ Association in March this year sent a business mission both Hanoi and Ho Chi Minh City, Ha said. South Korea’s Nobland recently announced that it would invest additional $18 million in its $61 million garment factory in Ho Chi Minh City’s Tan Thoi Hiep Industrial Park. Nobland has grown in leaps and bounds since its arrival in Vietnam in 2002 when it started out with a $3-million garment plant equipped with 15 production lines.
According to the Ministry of Industry and Trade, this year Vietnam’s garment and textile export is likely to reach $28.36 billion. This year’s four-month figure was $6.55 billion, up 10.2 per cent on-year. Last year the garment and textile exports turnover hit $24.5 billion, up 19 percent on-year. The textiles, clothing, and footwear sectors is likely to benefit immensely from the EU-Vietnam FTA when the import tariff is reduced to zero percent, down from the existing 10 percent. They currently comprise 30 percent of Vietnam’s overall merchandise exports, and a massive 50 per cent of Vietnam’s overall exports to the EU.
SOURCE: Yarns&Fibers
Federation of Indian Micro and Small & Medium Enterprises (FISME) jointly with the SME Foundation of Bangladesh, an autonomous organization of the Government of Bangladesh engaged in development of MSME sector conducted a workshop to promote Regional Value Chain of Textiles within SAARC Countries in Dhaka recently. The workshop was presided by Syed Md Ihsanul Karim, Managing Director, SME Foundation. International experts on Textiles value chains made presentations at the programme and explained the need, scope and tools for dovetailing the textiles/ready - made garments value chains of SAARC region. The workshop was attended by Entrepreneurs of the RMG sector who also participated in the discussions. The workshop was part of a series of such programme organized in SAARC countries under a project for Promoting Intra- regional value chain being implemented by FISME with sponsorship from SAARC Trade Promotion Network, an initiative of GIZ, the International Development Agency of German Government. The workshop will be followed by handholding of SMEs in textiles trade within SAARC region to graduate to intra- regional trade and actual matchmaking of the enabled SMEs.
SOURCE: Yarns&Fibers
Cotton yarn market again lost ground, and participants were holding bearish expectations over the future trends amid sluggish sales. In the week ended 15 May 2015, cotton yarn markets showed signs of weakness. In China, sale/ production ratios reported fell at some spinning mills in China while outlook turned even gloomier given the increase in inventory levels. Prices were unchanged due to a lack of demand from downward processors. In Shengze, 32s cotton yarn was pegged in the range of US$3.37-3.44 a kg, while 21s was at US$3.29-3.36 a kg. Prices in India were seen easing in line with cotton fibre prices while the same in Pakistan moved up. In India, 30s combed for knitting was down INR2 a kg on the Ludhiana market. 30s carded cotton yarn for weaving in Pakistan was priced at US$2.82 a kg while combed was pegged at US$3.16 a kg. The sluggish demand in further downstream has started taking its toll on polyester market sentiment. Polyester spun yarn prices were stable to firm in China, and deals were concluded in small volumes due to lack of substantial demand. While most yarn makers kept running at stable rate, demand remained was sluggish as inventory with fabric makers piled up. In Shengze, offers for 32s spun polyester were around US$2.06 a kg, while 45s was at US$2.21 a kg. In Qianqing, 32s offers were hiked US cents 4 from last week to US$2.10-2.13 a kg.
In Pakistan, polyester yarn prices mostly rolled over on stable raw material pricing with 30s pegged at US$2.12 a kg. Prices in India reflected the recent hike in PSF prices at the beginning of this month. 30s yarn for knitting were up INR0.50 a kg in Ludhiana market while they were up INR2 in Indore market. Viscose spun yarn prices were flat in China and volume off-take was slower than expected, exerting downward pressure on market sentiment. Yarn makers did not support the recent hike in VSF prices and kept their offers flat. In Jiangsu, compact siro-spun 40s yarn was traded steady at US$3.44 a kg while weaving yarn 30s in Xiaoshan was pegged at US$2.75 a kg. Viscose yarn price in India rose in local currency reflecting the recent hike producers’ prices for VSF early this month. 30s viscose spun prices inched up INR1 a kg in Indore market while the same for weaving in Bhiwandi was pegged at INR193 a kg.
SOURCE: Yarns&Fibers
Pakistan Yarn Merchants Association (PYMA) has demanded substantial rate cut in sales tax and income tax in the forthcoming federal budget, to enhance business activities as well as exports with a view to strengthen and push forward the economy of the country. These views were expressed by PYMA Central Chairman Qaisar Shamas Guccha, Zonal Chairman Muhammad Akram Pasha and Zonal Vice Chairman Adnan Zahid here on Monday. They stated that the taxes rate in Pakistan is quite high as compared to regional countries particularly GST is 17 percent whereas in India it is 12.36 percent, in Indonesia 10 percent, in Japan eight percent, in Singapore seven percent, in Malaysia six percent and in Taiwan it is five percent. Moreover the rate of income tax in Pakistan is comparatively higher than regional countries. This has generated tax evasion tendencies in the country. PYMA leaders pointed out that with the reduction in tax rates not only the industrial and business activities will be promoted but also country's exports will be enhanced.
SOURCE: The Business Recoreder
Chairman All Pakistan Textile Mills Association, S M Tanveer has said that the situation arising out of the Supreme Court verdict on Gas Infrastructure Development Cess (GIDC) has panicked the textile industry across the value chain. The statement was made in an emergent meeting held at APTMA Office Karachi to discuss implications of GIDC on the industry, which was also attended by Amanullah Kassim Sr. Vice Chairman APTMA, Nadeem Maqbool, Asif Inam, Imran Maqbool, Jamil Qasim, Saleem Shakoor, Naveed Ahmed, Khurram Inam and others. He said the textile industry is already facing a crisis like situation because of the high cost of doing business and liquidity constraints. The emerging situation on GIDC and its implications would add salt to the injury and the industry would be burdened further in the absence of liquidity flow. He said the textile industry refunds worth Rs 160 billion are already lying pending with the government. The textile industry has further been burdened by Rs 120 billion in terms of electricity tariff since August 2013 to date. He said the textile industry exports have registered a decline of 16 percent in March 2015 month on month basis.
Furthermore, he said, some 30 percent capacity of the industry has already been closed down because of the liquidity crunch and energy constraints. He said the textile industry is not in a position to pay the GIDC with retrospective effect. Therefore, the Government Economic Managers should come forward to take the industry stakeholders into confidence across the value chain and save the industry from such a severe blow. He said any further capacity closure would lead to massive unemployment and further drop in textile exports hence the government should take the industry on board before any further step on the issue of GIDC.
SOURCE: The Business Recorder
As this week marks the third anniversary of the U.S.-Colombia Free Trade Agreement (FTA), Procolombia today announced 1,908 Colombian companies have exported to the United States for the first time, helping to bring 434 new non-mining and non-coffee products to market. Colombian small-to-medium enterprises (SMEs) have experienced the most gains since 2012, as nearly all of the new businesses comprise SMEs within the manufacturing, clothing and agribusiness industries. By regions of the country, Bogotá has emerged as a hot spot for international trade. The Colombian capital has registered the most new exporters to the United States with more than 1,000 businesses, followed by Antioquia, known for its exports of bathing suits. "The Free Trade Agreement has opened the door for new business opportunities that support economic growth in both Colombia and the U.S.," said Maria Claudia Lacouture, President of Procolombia, the government agency in charge of promoting trade, investment, tourism and country brand . "Colombian companies, in particular small and medium sized businesses, have established themselves in the U.S. market with innovative, high-value products and are becoming top suppliers for large retail stores."The U.S.-Colombia FTA took effect on May 15, 2012, eliminating trade barriers and allowing billions of dollars of exports to flow between the two counties. While the overall monetary amount of exports from Colombia to the U.S. has decreased since the FTA's implementation, the increase in the number of companies exporting, the types of products and the number of destination markets has significantly benefited the Colombian economy.
According to Procolombia, during the last year, non-mining exports grew by 10,85% percent, from US$3.425 million in 2013 to US$3.796 million in 2014. Agricultural exports increased by 7 percent from 2013 to 2014, with a total of 62 new products. Items such as sugar and honey and fresh flowers have seen the greatest sales during this time period, with net growth of US$39.5 million and US$26.9 million, respectively. Other popular exports include: dairy – which has increased by 37 percent since the FTA – fresh and processed fruits and vegetables and oils, among others. Within the manufacturing industry, exports increased by 8.9 percent from 2013 to 2014, with a total of 317 new products. The aluminum sector reported a net growth of US$28.1 million year over year. Other main exports include truck parts, batteries, centrifuges, and more. At the end of 2014, more than 320 clothing companies exported for the first time, offering 52 new products, such as rugs and upholstery items, kneepads and anklet socks, and steel-tip shoes. The United States was the main destination for Colombian clothing exports in 2014. Overall, the U.S. market accounted for nearly 26 percent of Colombia's total exports in 2014, resulting in US$54.8 million in sales. Since the signing of the FTA, more than 40 North American cities have purchased Colombian products. American cities that purchased the largest number of products exported by Colombia include Miami, Fla., Houston Texas, and New York, N.Y.
SOURCE: The Investor Ideas
President Barack Obama and his associates have responded to every attack on their trade agenda from Senator Elizabeth Warren by claiming she throws around empty rhetoric, disconnected to the realities of the world. Monday morning, Warren’s office released a report that reverses the positions. In Warren’s view, the president is the one spinning the facts. The report from the Massachusetts Democrat, “Broken Promises,” looks at labor standards in two decades’ worth of free trade agreements (FTAs). Almost all of them were touted as granting unique protections to workers abroad. And all of them failed to live up to those commitments because the high standards went unenforced and ignored. The report shows that the sad legacy is this: Our trade partners employ child workers and forced labor, threaten and even kill people for wanting to join a union, and let virtually every perpetrator of worker violence and abuse get away with it.
Warren’s report doesn’t suggest any alternatives to the current broken process. But it’s implicit from the evidence. There’s no way currently for workers to challenge FTA violations in a legitimate way. This directly impairs efforts to balance trade and ensure equal competition. A company that can’t exploit workers in America can move their capital to a trade partner and employ child labor or slaves while still exporting their goods with no tariffs. The lack of enforcement creates a race to the bottom. Politically, the report speaks directly to a question of trust that has plagued the administration on trade. They have been damaged by the sense that they want to push through a largely secret agreement on the Trans-Pacific Partnership (TPP), and this report suggests the claims made to sell it are unreliable. This likely won’t impact the vote in the Senate, but in the House, where Warren’s opinion matters, it could sway Democrats on the fence who hold the key to passage of the Obama trade agenda. Lyndon Johnson was done in on Vietnam by a credibility gap between his pronouncements and the facts. With this report, Warren has widened the White House’s economic credibility gap.
As I wrote for TNR last month, since NAFTA, leaders pushing trade deals highlighted robust labor safeguards, bringing competition between domestic and foreign workers onto more equal footing. Warren’s staff assembled a collection of eerily similar quotes boasting about labor standards. “The first agreement that ever really got any teeth in what another country had to do with its own workers,” President Bill Clinton said about NAFTA in 1993. “The strongest labor and environmental protections ever negotiated,” said then-U.S. Trade Representative Rob Portman about the Central American Free Trade Agreement (CAFTA) in 2005. President George W. Bush negotiated, and Obama signed FTAs with Peru, Colombia, Panama, and South Korea that had “unprecedented,” “strong,” and “groundbreaking” protections.
Three administrations—Clinton, George W. Bush, and Obama—used this identical language. And three administrations have done little to fulfill these assurances. “Again and again, proponents of free trade agreements claim that this time, a new trade agreement has strong and meaningful protections; again and again, these protections prove unable to stop the worst abuses,” the report states. The Warren report uses case studies of countries under active FTAs whose workers still face brutality and mistreatment. In Peru, the beneficiary of a bilateral FTA with the U.S. in 2007, bricks, cocoa, fireworks, and fish are harvested and manufactured by children; Brazil nuts, timber, and gold are produced by slave labor. Guatemala, signatory to CAFTA, was cited as “the most dangerous country in the world” for trade unionists, with numerous instances of “murder, torture, kidnapping, break-ins, and death threats.” El Salvador, another CAFTA partner, features both child labor and intimidation of union activists, with employers paying off labor federations to stop independent organizing and using gang members to threaten workers, according to a January report from the Center for Global Worker’s Rights and the Worker Rights Consortium.
Colombia’s experience with worker violence exemplifies how spin gets valued above substance in labor standards enforcement. The Colombia FTA included a “Labor Action Plan,” outlining specific steps for the Colombian government to follow to stop worker violence and bring perpetrators to justice. But since implementation began in 2011, the National Union School in Colombia finds 105 union activist deaths and 1,337 death threats. Fines imposed by the Labor Ministry go uncollected, new rules from the government are “largely ignored,” and investigations into prior killings languish. Out of 110 labor-related homicides since 2010, the Colombian government has secured only four convictions.
The U.S. Trade Representative (USTR) has responded to this by explaining that the killing of one Colombian trade unionist every other week is better than before. Not only is this misleading on the facts (USTR had to add in years with hundreds of unionist murders to make it look like dramatic improvement; in reality, the murder rate has scarcely changed), but irrelevant to the goal of prevention and morally dubious. Data about failed labor standards does not only come from advocacy reports, but U.S. government studies. A 2014 report from the Government Accountability Office shows only minimal progress in honoring labor standards in FTAs. Most trade partners had no capacity to enforce labor laws, GAO found, and weak court systems made accountability nearly impossible. And the Department of Labor and USTR “do not systematically monitor and enforce compliance with free trade agreement labor provisions.” For example, when Peru rolled back workplace health, safety, and environmental laws presented in direct violation of the FTA, USTR only agreed to “monitor” the situation.
Recent Labor Department and State Department reports paint a similarly grim picture. Of the 20 FTA partners around the world, ten countries continue to use forced or child labor and 17 violated human rights laws directly related to labor rights. This includes abuse of foreign domestic workers in Jordan, exploitation of child labor in Mexico, and impunity for labor crimes in Honduras. The Warren report shows the stark difference in FTA priorities. Corporations worried about violations of the agreement get an extra-judicial tribunal, known as the investor-state dispute settlement process, to win monetary penalties based on “expected future profits” lost. But abused workers have no such appeals process. They must rely on governments to enforce the trade agreement. And the report shows that the United States has failed on this count.
The Labor Department, which processes formal complaints about trade agreement violations, has not resolved any in the 22 years since NAFTA. The only labor enforcement case under any FTA, which sprung from an AFL-CIO complaint against Guatemala in 2008, doesn’t have its first hearing until next month. Many union representatives in partner countries are not even aware how to submit a complaint. And here's where the Warren Report fails to offer a remedy. The answer is to give workers the same benefit afforded to corporations: their own dispute settlement process to directly enforce trade agreements. This would enforce global labor standards to uplift workers around the world. It turns out that labor groups asked for a variation on this in the TPP, which is currently being negotiated. Shane Larson, legislative director of the Communications Workers of America, said unions asked for the ability to directly press charges against serial FTA violators. “USTR said you don’t understand how the system works,” Larson said. Perhaps they understand all too well. Corporations get their own court system to protect their investments; workers get no real protections but a lot of words on paper and outsized promises. The Warren report shows systematically how those promises have been broken with grave consequences, not only for workers exploited abroad, but those in America impossibly competing with cheap labor.
SOURCE: The New Republic
