Fashion Intel & Analysis

A new report released by the Uzbek-German Forum for Human Rights (UGF) documents that forced labor persisted during Uzbekistan’s 2018 cotton harvest despite the efforts made by the Uzbek government. The report is based on 70 in-depth interviews, 300 field visits, and the monitoring of more than 100 farms. It highlights the progress made by the Uzbek government, as well as the ongoing forced labor in the cotton sector. “UGF documented evidence that systemic forced labor persists because the structural causes remain in place. The top-down quota system in particular led officials to send people to pick cotton,” Umida Niyazova, Director of UGF said. “We urge the government to accelerate reforms to build on its successes to finally bring an end to these practices,” he continues. The full report is available here.

Watch for more updates about the situation in Uzbekistan.  In the upcoming weeks, the Cotton Campaign will release a roadmap for reforms in Uzbekistan that will focus on three main areas: ending systemic forced labor; advancing structural reforms to address root causes; and enabling civil society.

Today, President Trump retreated from his threats to immediately close the southern border and issued a one-year warning to the Mexican government that they must reduce the flow of drugs and migrants traveling through the border. “If the drugs don’t stop, or largely stop, we’re going to put tariffs on Mexico and products, in particular cars. The whole ballgame is cars. And if that doesn’t stop the drugs, we close the border,” Trump told reporters this afternoon.  

Even with the border remaining open, U.S. Customs and Border Protection (CBP) says that cargo wait times will significantly increase for the foreseeable future. In the scheduled trade call this afternoon, Bradley Hayes, Executive Director at the Office of Trade Relations at CBP, announced CBP has redeployed 545 officers to date from the southwest border ports of entry to assist the Border Patrol for an initial 30 days. If there is a need to extend beyond the 545 officers, the next group of officers will be pulled from U.S. airports. 

The redeployment of officers has resulted in increased wait times along the southwest border consistently at every major crossing. The hardest hit areas are in South Texas and the Rio Grande Valley, West Texas and El Paso, and Yuma, Arizona. He noted that yesterday for cargo operations in El Paso, the peak wait time was seven hours for trucks to cross the border. At the end of the day when cargo hours shut down there were trucks waiting in the queue that could not be processed during the day and sat overnight, meaning at the start of the next morning CBP was already behind in cargo waiting to be processed. 

Hayes said there is the option to redirect cargo to other ports, but explained they are seeing extended wait times across the southwest border at every major crossing. He noted the situation will continue as long as CBP needs to assist Border Patrol. CBP is well aware of the potential economic impact this has on many industries and communities, but because of the security crisis CBP must respond. 

This week, President Trump signed a Presidential Memorandum on Combating Trafficking in Counterfeit and Pirated Goods.  The objective is to expand government efforts to deter online trafficking in counterfeits.  A report is required in 210 days that will analyze the data and "develop a deeper understanding of the extent to which online third-party marketplaces and other third party intermediaries are used to facilitate the importation and sale of counterfeit and pirated goods ...."   The report also will evaluate the policies and procedures that are most effective to curb these imports and make policy recommendations.   The Administration describes third-party intermediaries as "online third party marketplaces, carriers, customs brokers, payment providers, vendors and others involved in international transactions."  

In an op-ed in Wall Street Journal, the assistant to the president for trade and manufacturing policy, Peter Navarro, says "when you purchase brand-name goods through online third-party marketplaces like Alibaba, Amazon and eBay, there's a good chance you'll end up with a counterfeit." Both the op-ed and the Memorandum cite a 2018 GAO study that examined four types of frequently counterfeited products -- shoes, cosmetics, travel mugs, and phone chargers.  While the report found none of the shoes were counterfeits, all of the cosmetics and most of the travel mugs were.    

USFIA joined the Coalition for GSP’s letter to the House Ways and Means and Senate Finance Committees expressing the concerns of removing GSP benefits for India and Turkey, as well as the pending country practice reviews, and explains the benefits of preserving a GSP program that works for American companies. The letter says one-third of GSP savings for American importers result from the inclusion of India and Turkey in the program, and another third result from eligibility for other countries under review, such as Indonesia and Thailand. Read the full letter here.

This week U.S. Customs and Border Protection (CBP) released a summary of their findings from the foreign factory visits of Textile Production Verification Teams (TPVTs) conducted from October 1, 2017 through September 30, 2018. CBP officials inspected factories in nine countries and visited 138 factories. The TPVTs traveled to Nicaragua in April 2018, Guatemala in May 2018, El Salvador in June 2018, Peru and Colombia in July 2018, Madagascar and Mauritius in August 2018, and Kenya and the Dominican Republic in September 2018.

CBP officials conducted on–site inspections in order verify country of origin claims and to investigate compliance with claims for preferential treatment under the African Growth and Opportunity Act (AGOA), the U.S.–Central America Free Trade Agreement (CAFTA), the U.S.-Peru Trade Promotion Agreement (PTPA), and the U.S. – Colombia Trade Promotion Agreement (Colombia TPA).

The TPVTs continue to show that the major problems are with factories maintaining sufficient documents to support the Free Trade Agreement or trade preference program claims for duty-free access.  The key findings are:

  • The TPVTs did not find any evidence of illegal transshipments.
  • While factory names are not made public, CBP found factories considered “high risk” for transshipment activity in Colombia, Dominican Republic, Madagascar, Mauritius, Nicaragua, and Peru. 
  • CBP visited 3 AGOA countries and found no factories that were violating AGOA .  There were factories in Kenya, Madagascar, and Mauritius that had insufficient documents to support AGOA claims.
  • CBP visited four CAFTA countries. All the factories visited in Guatemala were in compliance. Nine factories in the Dominican Republic and Nicaragua were found to be violating CAFTA. Seventeen factories in the Dominican Republic, El Salvador and Nicaragua had insufficient documents to support CAFTA claims.  
  • CBP visited Peru and found ten factories with insufficient documents to support FTA claims.
  • CBP visited Colombia and found four factories with insufficient documents to support FTA claims. 

The shared results from CBP are available here.