|
Item |
Price |
Unit |
Fluctuation |
|
PSF |
1142.89 |
USD/Ton |
-0.71% |
|
VSF |
2155.16 |
USD/Ton |
0% |
|
ASF |
2510.28 |
USD/Ton |
0% |
|
Polyester POY |
1118.40 |
USD/Ton |
-0.72% |
|
Nylon FDY |
2906.21 |
USD/Ton |
0% |
|
40D Spandex |
6040.99 |
USD/Ton |
0% |
|
Nylon DTY |
1346.98 |
USD/Ton |
-0.60% |
|
Viscose Long Filament |
3151.11 |
USD/Ton |
-1.03% |
|
Polyester DTY |
6032.83 |
USD/Ton |
0% |
|
Nylon POY |
1404.12 |
USD/Ton |
0% |
|
Acrylic Top 3D |
2710.28 |
USD/Ton |
0% |
|
Polyester FDY |
2706.20 |
USD/Ton |
0% |
|
30S Spun Rayon Yarn |
2759.26 |
USD/Ton |
0% |
|
32S Polyester Yarn |
1844.95 |
USD/Ton |
-0.88% |
|
45S T/C Yarn |
2938.86 |
USD/Ton |
0% |
|
45S Polyester Yarn |
2024.55 |
USD/Ton |
-0.80% |
|
T/C Yarn 65/35 32S |
2481.70 |
USD/Ton |
0% |
|
40S Rayon Yarn |
2906.21 |
USD/Ton |
0% |
|
T/R Yarn 65/35 32S |
2661.30 |
USD/Ton |
-0.61% |
|
10S Denim Fabric |
1.14 |
USD/Meter |
0% |
|
32S Twill Fabric |
0.96 |
USD/Meter |
0% |
|
40S Combed Poplin |
1.06 |
USD/Meter |
0% |
|
30S Rayon Fabric |
0.77 |
USD/Meter |
0% |
|
45S T/C Fabric |
4.8 |
USD/Meter |
0% |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16327 USD dtd. 27/07/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Ichalkaranji-based textile units producing grey cloth are facing a major problem as its client units in Rajasthan have shut down since May for allegedly violating pollution norms. At least 30-40% cloth produced in Ichalkaranji is supplied to Rajasthan-based Balotra area where it is processed in a particular way. As many as 739 textile units in Balotra were shut down following the National Green Tribunal's (NGT) orders. This has created a major problem for Ichalkaranji-based units that produce one crore meter cloth every day. Satish Koshti, president of Ichalkaranji Powerloom Weavers' Association, said, "We have the capacity to produce one crore meter cloth daily and we were doing so till April. Then in May, the NGT ordered to shut down over 700 textile processing and other units in Balotra, which are clients of Ichalkaranji-based powerloom units. The cloth texture depends on its processing, drying procedure and printing. Now, almost 30-40% of the cloth produced in Ichalkaranji has no takers since then."
On this backdrop, the production activity in these units has been lowered by 30%. Now, the powerloom industry has sent a letter to the local BJP MLA Suresh Halwakar urging him to look into the matter and provide some solution, as the party is in power in the state as well as the Centre. Koshti said, "We have expressed our concerns to Halwankar. We are hopeful that he will find some solution. We cannot produce the cloth just to be stored in our godowns and await lifting of the ban on the textile units in Rajasthan. We don't have that much financial stability. Hence, we have scaled down the production. However, running a factory below its production capacity is a costly affair as well." The cloth produced in Ichalkaranji is supplied to Balotra, Bhiwandi (Maharashtra), Ahmedabad (Gujarat) and Kanpur (Uttar Pradesh) for further processing. Each area processes the cloth in a different way that lends variety to the final product. The quality also depends on the weather conditions of those areas, Koshti said.
Vinay Mahajan, a senior trader from Ichalkaranji, said, "The cloth made in Ichalkaranji is being supplied to these areas since the last 50 years. Now, the business is suffering because of unsold long pieces of cloth. We are in a dilemma whether to continue production. Even if Balotra-based units start operating, they will not process more cloth than their capacity. The major challenge is to deal with low market for the finished products. The garment and apparel market is sluggish at present. Hence, there is no growing demand." When asked about the estimated cost of blocking the supply and distribution chain, he said, "The amount is in crores. We have produced the cloth but the traders have not purchased it; their purchased cloth is not being accepted by the Balotra-based units. As these big payments are stuck, the companies are also facing problems to make employee payments and carry out maintenance works."
On May 16, the Jodhpur circuit bench of the NGT ordered closure of 739 textile units in Balotra and its surrounding areas. As per the joint inspection report of the Central Pollution Control Board and Rajasthan Pollution Control Board submitted in the court, the common effluent treatment plant (CETP) has not been functioning in adherence to the norms. The NGT also ordered the trust operating the CETP to renew the consent to operate the plant and obtain hazardous waste disposal authorization from the Rajasthan Pollution Control Board. The next hearing of the case is scheduled on July 31.
Production activity
SOURCE: The Times of India
People have been allured towards Khadi after Prime Minister Narendra Modi's clarion call last October to adopt the fabric. A year-on-year comparison of the April-June quarter shows that retails sales of Khadi has increased by 30.37 percent. Micro Small and Medium Enterprises (MSME) Minister Kalraj Mishra at the launch for an exclusive exhibition cum sales of products from Jammu & Kashmir and Khadi T Shirts said that Khadi sales have doubled. They want the supply to match the rising demand for which they are looking for ways to increase Khadi production. An analysis of the data revealed that during the April-June quarter, retail sales of readymade Khadi rose 50.68 percent as against the same period last year. Similarly, woolen Khadi sales increased 68.10 percent, silk Khadi sales increased by 33.75 percent, polyvastra Khadi sales rose 59.51 percent, while handicraft sales by 3.03 percent. Mishra also said that the amendments to the Micro, Small and Medium Enterprises Development (MSMED) Act are aimed at enhancing the investment limits for MSMEs. It has gone to the Standing Committee. The Standing Committee will present its report during the current session. The investment limits in plant and machinery for the micro enterprises is proposed to be raised to Rs 50 lakh, of small enterprise to Rs 10 crore and medium enterprise to Rs 30 crore. The existing limit are Rs 25 lakh, Rs 5 and Rs 10 crore respectively. Narendra Modi, while talking about more use of Khadi in his Mann ki Baat radio address in October said that if you buy Khadi, you light the lamp of prosperity in the house of a poor person.
SOURCE: Yarns&Fibers
Chief Economic Advisor (CEA) Arvind Subramanian today said India can grow at 8-10 per cent, provided exports put up a strong show. I believe very strongly that if we are to grow at 8-10 per cent, we have to have very very strongly performing exports. I don’t think there is one historical experience in the last 50-60 years where countries have rapid rate of growth without having strongly performing exports,” Subramanian said at an award function here. He, in fact, made a case for exporting labour-intensive goods. International economic environment on exports is not in India’s favour as Europe, Japan and China are slowing, the CEA said.
Taking note of loose monetary policy followed by some countries, Subramanian said: “(It) is going to impact our growth performance.” He was apprehensive that India might lose its biggest market of the world, with big countries increasingly negotiating preferential trade agreements. “If you look at what’s happening across the world, more and more number of big countries are negotiating preferential trade agreements. The US is close to completing an agreement with a number of Asian countries and the European Union. “China is also is soon going to be part of trans-Atlantic trade agreement. There is a real risk that we (India) are going to be excluded from the biggest market of the world. We are going to be a victim of trade diversion,” Subramanian said. “Non-tariff barriers will also be disadvantageous for us. I think that these are really huge challenges for the external trade environment that we have to reflect very carefully.” The CEA stressed on need for a competitive exchange rate and better local infrastructure to boost exports growth. “We have to have a competitive exchange rate. We need to upgrade infrastructure to boost exports growth,” he said. Subramanian expressed hope that the government’s Make in India initiative will help strengthen the economy.
SOURCE: The Financial Express
The Indian basket of crude oil price has plummeted to $54.41 per barrel, its lowest in four months, on the back of multiple factors, including a contraction in the manufacturing sector in China, the world’s second-largest consumer of crude after the US. A stronger US dollar has also made non-US investors to sell commodities, pressuring prices already impacted by the global oversupply concerns from the just-concluded Iranian nuclear deal. The Indian basket represents the average price of Oman and Dubai sour grade crude and the sweet Brent crude oil processed in Indian refineries in the ratio of 72:28. It stood at $54.41 per barrel on the last trading day of July 24, falling from a peak of $66.54 per barrel on May 6, and the lowest since April 2 price of $54.77 per barrel. “The government had budgeted for an average crude price of $70 per barrel for this financial year. If the average price of $60 per barrel in the first four months (April-July) is sustained, we are looking at Rs 65,000 crore savings in import bill for companies, and around Rs 9,000 crore savings in the subsidy bill for the government,” said K Ravichandran, senior vice-president at research and ratings agency ICRA.
Currently, every $1 decrease in crude prices pulls down import bill by Rs 6,500 crore and the government’s subsidy burden by Rs 900 crore. However, the benefit would be limited by the ongoing depreciation in rupee value. The Indian currency on Monday fell to a six-week low closing at Rs 64.17 against the dollar. Currently, every Rs 1 increase in the exchange rate of dollar increases oil import bill by Rs 7,455 crore, according to Petroleum Planning and Analysis Cell (PPAC), an arm of the oil ministry. Ravichandran also said the decline in crude prices is positive for Indian refiners — Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) — as their working capital requirements would reduce due to lower crude oil and product prices and lower gross under-recoveries (GURs) or loss suffered on subsidised sales of petroleum products like liquefied petroleum gas (LPG) and kerosene. “Lower GURs for refiners would also mean reduced subsidy burden sharing for upstream companies like Oil and Natural Gas Corp (ONGC). The government has already exempted upstream firms from LPG subsidy sharing and limited the kerosene subsidy sharing to Rs 12 per litre for them. However, reduced crude prices would also expose ONGC’s overseas arm ONGC Videsh (OVL) and impact realisations from value-added products for ONGC,” Ravichandran said.
The oil marketing companies (OMCs) under-recoveries came down from Rs 139,869 crore in 2013-14 to Rs 72,314 crore last financial year, thanks to diesel deregulation and the roll out of Direct Benefit Transfer in LPG (DBTL) scheme. In the current financial year, the government is budgeting for a petroleum subsidy bill of Rs 30,000 crore, including Rs 22,000 crore on LPG sales, and the rest on kerosene. The government may now be able to save Rs 9,000 crore of this thanks to the decline in crude rates. India imported 189 million tonne (MT) of crude oil at a cost of $112 billion last financial year (2014-15). With lower crude rates slated to create Rs 65,000 crore cushion for importers, OMCs could pass on the benefit to consumers by reducing retail prices of petrol and diesel to be announced by OMCs soon. In Delhi, the retail prices were last revised on 15 July through Rs 2.43 per litre cut in petrol and Rs 2.25 per litre cut in diesel. However, petrol prices increased by 28 paisa while diesel prices decreased by a minor 50 paisa after the state government raised Value Added Tax (VAT) rates.
SOURCE: The Business Standard
After committing to develop Chabahar port in Iran, India Government has set its eyes on developing the Payra port in Bangladesh. Building foreign ports is part of a new manoeuvre, for thwarting China’s growing influence in the region. The Payra port is located in Patuakhali district of Southern Bangladesh, on the Bay of Bengal. Over $ 3 billion investment would be required for the port project. HR Wallingford, a UK based marine consultancy company, has been mandated to prepare a master plan for the port development. A senior Shipping ministry official told BusinessLine after Prime Minister’s Narendra Modi’s early June visit to Bangladesh, initial studies have been commenced for Payra port in the ministry. The Bangladeshi officials are likely to submit the port survey data and technical studies by September or October. The decision to develop the port is based on strategic considerations and not economic ones, the official said. It has a potential to be developed into a deep-water port handling large vessels but the perennial silt from the local rivers is a cause of worry.
The official said that Bangladesh has Chittagong and Mongla ports but Chittagong sufferers due to excessive traffic and shallow draft. The Mongla has problems of inadequate road and rail connectivity, Therefore Payra is seen as way out this logjam. Since independence in 1971, Bangladesh has not built a new port and desperately wants to build one, as it has a booming export oriented garment export industry. The port will also be able to get a lot of container traffic bound for the North-East region of India, the official said. The official pointed that previous government lacked a doctrine and a strategy for developing ports in other countries. A number of East African countries including Malawi had approached UPA government for port development in their countries but such opportunities were ignored. Under Modi Government port related developments in East Africa would be given a priority, for which an international conference would be held in September.
SOURCE: The Hindu Business Line
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$ 53.71 per barrel (bbl) on 27.07.2015. This was lower than the price of US$ 54.41 per bbl on previous publishing day of 24.07.2015.
In rupee terms, the price of Indian Basket decreased to Rs 3437.44 per bbl on 27.07.2015 as compared to Rs 3476.25 per bbl on 24.07.2015. Rupee closed weaker at Rs 64.00 per US$ on 27.07.2015 as against Rs 63.89 per US$ on 24.07.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on July 27, 2015 (Previous trading day i.e. 24.07.2015) |
Pricing Fortnight for 16.07.2015 (June 27 to July 13, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
53.71 (54.41) |
58.69 |
|
(Rs/bbl |
3437.44 (3476.25) |
3730.34 |
|
|
Exchange Rate |
(Rs/$) |
64.00 (63.89) |
63.56 |
SOURCE: PIB
Pakistan’s exports of value-added textile products rose 7.5 per cent to $4.517 billion in 2014-15 from $4.202bn a year ago, the Pakistan Bureau of Statistics said on Monday. Exports of readymade garments grew 10.5pc to $2.101bn from $1.909bn, and of knitwear rose 5.37pc to $2.416bn compared to $2.293bn during the previous year. Official figures show that the government held out support of Rs6bn, mostly to the value-added textile sector, during FY15 as against Rs3bn over the previous year. This clearly shows the government’s intention to remove imbalance in the exports sector to create jobs for the youth.
Another reason behind the rise in the exports of value-added textile products is preferential access to the 28-nation European Union under GSP+ scheme. The government has also implemented an incentives-laden, five-year textile policy to promote the segment. A textile package of Rs40.6bn would require an ongoing firm commitment from the finance ministry and other relevant authorities. However, another Rs23bn development infrastructure projects envisaged in the policy will need a nod from the Planning Commission, which is not an easy task. The government announced Rs188bn for the previous textile policy (2009-2014), but actually released Rs28bn. Similarly, the announcement of deemed import basis for PSF (Polyester Staple Fibre) will enhance man-made fibre content in export products, as the world is continuously shifting from cotton to man-made fibre, and the ratio has reversed from 60-40 to 40-60 within 10 years. In Pakistan, the ratio is 86-14, which is quite low as per international demands.
The import of textile machinery fell by around 20pc year-on-year during FY15, which suggests that there is little interest for investment in diversification or improving the quality of products. As a result of these and international factors, the exports of primary commodities like raw cotton and cotton yarn dropped 28.29pc and 7.76pc during previous year. Cotton yarn exports were $1.842bn in 2014-15 as against $1.997bn during the preceding year. Similarly, exports of cotton cloth declined by 11.38pc to $2.454bn from $2.769bn.
Trade analysts believe that this way Pakistan is exporting jobs to other countries by encouraging and facilitating exports of raw materials or semi-finished products. Exports of bed-wear also declined during 2014-15 by 1.97pc. However, exports of towels rose by 1.78pc and made-ups by 0.26pc during the year. The strong price effect over quantity effect is the major reason for exports growth of these items. Contrary to this, exports of cotton carded dipped by 10.38pc and yarn (other than cotton) by 2.31pc. However, exports of tents and canvas were up by 74pc in FY15. The value of overall textile and clothing products fell to $13.476bn in 2014-15 as against $13.720bn, reflecting a decline of 1.78pc.
SOURCE: The Dawn
Pakistan Businessmen and Intellectuals Forum's (PBIF) president Mian Zahid Hussain has demanded of the government to review exchange and monetary policies. He also highlighted the problems being faced textile sector, saying around 30 per cent textile mills have been closed and if the situation remained unchanged more bad news will follow. The PBIF chief, who was talking to textile mill owners, regretted that the textile industry despite playing a crucial role for the country's economy was crumbling under host of issues. He demanded of the government to intervene into the matter and help resolve the issues being confronted by the textile sector.
He also deplored that the sector which was providing employment to 3.5 people was not only facing energy crisis, but other issues such as incoherent policies, regional competition, were also creating hindrances its development. He said that 57 per cent exports are linked to the textile industry, its share in manufacturing stood at 46pc whereas 38pc urban labourers are associated with it. The PBIF chief apprehended that the textile sector's 9pc share in the GDP will shrink, creating problems for millions of farmers depending on cotton crop.
He said that other countries with a view to giving boost to their textile sectors were not only providing subsidies but were also devaluing currency. He said that the textile sector's huge amount under the head of refund must be cleared without any further delay as the issue which had been lingering since long was now creating serious liquidity problems for the sector. Hussain also called for giving preference to value-added items like fibre and cloth over cotton to generate extra foreign exchange. He said that the textile ministry should be empowered to take all decisions concerning the textile sector.
SOURCE: The Business Recorder
Ambassador of Denmark, Jesper Mollar Sorensen addressing a dinner hosted in his honour by Pakistan Hosiery Manufacturers and Exporters Association (PHMA) said that many Danish companies have completed their home work and are expected to establish their offices in Pakistan following visible improvement in governance and law and order situation. Mr Jasper Molar said that Denmark is a small country with a population of only 5.1 million, however in view of the economic importance of Pakistan a commercial section was created in its embassy in Islamabad. It is now working vigorously to strength bilateral trade ties between the two countries, he added. Pakistan is presenting facing a daunting challenge of energy crises. Just four years ago Denmark was also dependent on others for its energy needs however they worked hard and now they are fully self-reliant and are also exporting surplus electricity to the neighbouring countries.
Danish ambassador said that today Denmark is producing 40% of electricity from renewable energy resources including solar, wind, solid waste and biomass etc he said that Pakistan is blessed with unlimited wind and solar resources. Sindh has potential to produce 15000 megawatt of electricity from wind turbines; he said and added that four areas in Punjab have also been identified to produce 1000 Megawatt of electricity from wind. Jesper also underlining the importance of agriculture said that Pakistan and Denmark could launch joint ventures in these fields for the benefit of the two countries. He told that a Danish delegation will soon visit Pakistan to discuss feasible projects in addition to exploring the possibilities of cooperation with Pakistani counterparts.
Commenting on GSP-Plus status for Pakistan, he said that it has played a positive role in enhancing Pakistani exports to EU countries up to the tune of 20 Percent during 2014. He also appreciated of the performance of Pakistani experts in IT section and told that and IT delegation from Pakistan will also visit Denmark in 2016 to increase export of IT related software to that country. He said that Danish companies are known for their expertise in water treatment, he was convincing these companies to come to Pakistan and help Pakistan in addition to promoting their own business. However, the major bottleneck in this regard is negative perception of Pakistan. He said that his 70-80% time in Denmark is consumed while explaining to the Danish businessmen that Faisalabad and other parts of Pakistan are safe for businesses excluding FATA, KPK and Baluchistan. He said that he will also encourage a delegation of textile exporters from Pakistan to visit Denmark in near future. He also disclosed that a study was being conducted for the treatment of industrial and domestic water effluent. It will help local industry to fulfil its environment related international obligations in addition to offering new opportunities to Danish companies to do business with Pakistan. Earlier, in his address of welcome, Muhammad Amjad Khawaja of PHMA said that he was very much impressed by the dynamism and positive approach of Jesper Mollar Sorensen who conducted series of seminars and meetings to identify the untapped potential of Pakistan in different segments of economy. He also congratulated Jesper on his new assignment as director political affairs at Copenhagen and hoped that he will continue his efforts for the promotion of bilateral trade ties between the two countries.
SOURCE: Yarns&Fibers
Preparations for ITMA 2015 are in full swing at German knitting machine manufacture Karl Mayer, which is showcasing seven new warp knitting innovations in Milan. “Alongside, Karl Mayer will also display warp-knitted textiles, ideas for the after-sales sector and innovative warp preparation solutions,” a press release from Karl Mayer informed. “All our innovative customers worldwide have said that they intend to visit our stand,” Oliver Mathews, sales director at the Warp Knitting Business Unit said. Karl Mayer is displaying its knitting machines in hall 5, stand C101, on an area covering 1,400 sq. metres where it will be presenting impressive and groundbreaking innovations. “Our visitors can expect some technical systems that will definitely give them the edge in their business fields and emphasise our position as a market and technology leader,” Mathews added. “The market experts at Karl Mayer are looking forward to having some interesting conversations with their global business partners,” the German company informed.
The European edition of the world's biggest textile machinery show will take place from November 12-19, 2015 in Italy on an area covering some 200,000 sq. metres. In keeping with and committed to the requirements of forward-looking production, the motto of this huge machine show is 'Source Sustainable Solutions'. ITMA 2015 will showcase the latest machine technology and services that take into account the aspects of environmental protection and social responsibility. Roughly 1,500 exhibitors from more than 40 countries will be showing products and the organisers expect that more than 100,000 visitors from 140 countries will attend the trade show.
SOURCE: Fibre2fashion
Touted as a “21st century trade agreement,” the TPP would bring together 12 nations, including the United States and Japan, encompassing 40% of global trade under a progressive, far-reaching free trade deal. Environmental groups, labor unions, and anti-trade activists, have vociferously opposed the “fast track” bill. In contrast, foreign policy analysts in Washington have generally been in favour of the TPP. They argue that failure to reach a free trade agreement with Asian economies would allow China to set the global norms, fearing China’s mercantilist foreign policy would neglect environmental standards, labour rights, and intellectual property rights, and set a low bar for global standards. Few have paused to consider what the TPP means for the four Southeast Asian nations in negotiations: Vietnam, Malaysia, Singapore and Brunei. A range of issues are at stake, from currency manipulation to regulation of state-owned enterprises (SOEs), which have particular relevance for Southeast Asia’s state-centric economies. The TPP could bring about significant financial and social reforms to these countries, opening the playing field to foreign investors while introducing progressive labor standards and environmental protections.
Many of the rising “tigers”, as Asian economic powers like Singapore came to be known following rapid growth in the last half-century, benefited from protectionist policies and high tariffs reducing foreign competition. Vietnam and Malaysia in particular maintain some of the world’s highest tariffs and non-tariff barriers (NTBs) against foreign businesses. So why would these economies want to open their doors to change now? According to a study by Peterson Institute, Vietnam may stand to gain the most under the TPP framework. Jack Sheehan, a partner at DFDL specialising in cross-border legal services, argues the same: “In 2012, Vietnam exported almost US$7 billion worth of apparel to the US, which accounted for 34% of US apparel imports. Vietnam also exported US$2.4 billion worth of footwear… The TPP will allow Vietnam to export apparel to the US at a 0% tariff rate, which will make Vietnamese exports even more competitive.” However, the Communist Party of Vietnam (CPV) will have to continue unrolling privatisation of its bloated SOE sector and pass progressive legislation strengthening labor rights in order to meet TPP criteria. SOEs make up roughly one-third of Vietnam’s GDP and are a huge drag on the economy, inflating national debt. Vinatex, a state-owned textile manufacturer, produces 40% of Vietnamese apparel and 60% of all textiles. Tom Malinowski, Assistant Secretary of State for Democracy, Human Rights, and Labor in the US government, has argued that joining the TPP will force Vietnam’s government to continue fundamental political and economic reforms by granting Vietnamese labourers freedom of association and the right to form labor unions. Phasing out high tariffs will expose domestic industries to increased competition from overseas investors, but ultimately these structural reforms will set Vietnam’s economy on stronger ground and promote innovation in local firms.
Malaysia will also have to get its house in order if it is to accede to TPP standards. The US State Department downgraded Malaysia from Tier 2 to Tier 3 on the Trafficking in Persons (TIP) Report last year, having granted Kuala Lumpur waivers in 2012 and 2013 on promises that the country would make serious efforts to combat human trafficking. The regime of Datuk Seri Najib Razak vowed to tackle sex trafficking and indentured servitude but has made little progress; in fact, things have gotten worse. TPP standards could force Malaysia to comply with global norms of human rights and improve labour conditions and the rule of law. Currently, Malaysia’s Tier 3 status jeopardises the trade deal. While the White House could simply exercise executive authority to reinstate Malaysia’s Tier 2 status, a last-minute provision in TPP legislation introduced by Senator Bob Menendez (D-NJ), former Chairman of the Senate Foreign Relations Committee, aims to hold Malaysia accountable by denying Kuala Lumpur membership if it does not make improvements on human trafficking. In April, American Ambassador Joe Yun urged the government of Malaysia to do more to prosecute human traffickers. Yun’s outspoken remarks on the outdated Sedition Act, which criminalises speech critical of the government, have provoked ire in Kuala Lumpur. In December, the government of Malaysia summoned Yun to explain remarks he made in an interview with an online Malay news site. As a city state and a major port, Singapore’s economy is perhaps the most trade-dependent of all. While Singapore already has free trade agreements (FTAs) with the US, Japan, Australia, New Zealand, and Peru (all TPP negotiating partners), its market depends on maritime trade and security, particularly cross-border labour, goods and services exchange with Malaysia, with which it shares a land border, and cross-strait trade with Indonesia. The Malacca Strait, a narrow maritime pass between Malaysia, Singapore, and Indonesia, make Singapore a vital economic and strategic link for Middle East oil imports flowing to the large economies of China and East Asia, as well as a major hub for international exports.
Not far away to Indonesia’s north, the tiny country of Brunei has recently introduced conservative, Islamic laws clamping down on gay rights and pregnancy outside of marriage. Representative Mark Pocan (D-WI), along with other House members, signed a letter urging US Trade Representative Ambassador Michael Froman and Secretary of State John Kerry to play a heavier hand with regards to Brunei: “We… insist that Brunei address these human rights violations as a condition of the United States participating with them in any further Trans-Pacific Partnership trade negotiations.” It remains to be seen whether negotiators wield enough influence to convince the government of Brunei to repeal repressive laws ahead of a final deal. TPP negotiating partners could bar Brunei from membership if it fails to meet certain TPP expectations. Brunei is the smallest economy of the 12 nations in talks (its nominal GDP was US$16.11 billion in 2013, according to the World Bank). Therefore the leverage is on the side of the negotiating partners.
The US government has championed the Trans-Pacific Partnership as “a 21st century trade agreement”, one that will set high standards for international trade, protecting the environment, labour and human rights worldwide. The TPP is an opportunity to advance progressive reforms in Southeast Asia by making sure that the benefits of preferential trade status are contingent on domestic guarantees of freedom of association, strong environmental protections, and high labour standards. The nations of Brunei, Singapore, Malaysia, and Vietnam have more to gain from membership in this progressive trade deal than from abstaining and stalling modern social and economic reforms.
SOURCE: The Malaysian Insider
