Fashion Intel & Analysis

On Wednesday, the Responsible Sourcing Network released the YESS: Yarn Ethically & Sustainably Sourced Standard and YESS workbook. The documents provide guidance for spinners to avoid purchasing cotton that has a high production risk of forced labor.  The YESS Standard is a specific framework that applies the Organization for Economic Co-operation and Development’s (OECD) “Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector.”

“After years of engaging brands on the issue of forced labor in the cotton sector, it was clear to me that a robust industry-wide initiative was needed to identify and address the harm of forced labor in the upstream cotton supply chain,” says Patricia Jurewicz, Vice President of the Responsible Sourcing Network. “Not only has there been huge success with a similar approach for conflict minerals, but companies are now being required by law to address forced labor in their supply chains,” she continues.

Yesterday, President Trump met with Brazilian President Jair Bolsonaro at the White House and, as expected, trade was a key issue. Trump and Bolsonaro agreed to build a “Prosperity Partnership to increase jobs and reduce barriers to trade and investment,” according to the joint statement released after the meeting. The two leaders announced a plan of first steps to remove barriers to agricultural trade. 

In addition, President Trump said he would formally support Brazil’s accession to the Organization for Economic Cooperation and Development (OECD) and, in return, President Bolsonaro agreed that Brazil would forgo any special and differential treatment in World Trade Organization negotiations, corresponding with the United States’ efforts to implement new rules that make it harder for larger economies to self-designate as developing countries entitling them to preferential treatment.

Following the announcement by the Trump Administration that they will eliminate GSP (Generalized System of Preferences) duty-free benefits for India and Turkey, the Coalition for GSP has released a new survey on GSP termination impacts and potential steps companies might be willing to take to preserve GSP. 

According to the Coalition, during 2018 GSP saved American companies $1.03 billion in duties, with imports from India and Turkey representing more than $330 million. Termination of GSP benefits for India and Turkey could take effect as early as May and the decisions about GSP eligibility for key countries such as Thailand and Indonesia could be announced at any time.  If your company uses GSP, we encourage you to participate in the survey. The GSP Coalition is dedicated to educating policy makers about the benefits the GSP program provides as well as preserving a GSP program that works for American companies. 

Footwear and clothing lead the list of goods making up the biggest share of seizures in dollar terms of counterfeit goods, according to a new report released Monday by the Organization for Economic Cooperation & Development (OECD) and the European Union Intellectual Property Office (EUIPO). 

Trends in Trade in Counterfeit and Pirated Goods puts the value of imported fake goods worldwide based on 2016 customs seizure data at $509 billion, representing 3.3 percent of world trade and rising, up from $461 billion, 2.5 percent of world trade, in 2013, according to OECD.  

The next most common industries affected by counterfeit goods were leather goods, electrical equipment, watches, medical equipment, perfumes, toys, jewelry, and pharmaceuticals. 

“Counterfeit trade takes away revenues from firms and governments and feeds other criminal actives. It can also jeopardize consumers’ health and safety,” said OECD Public Governance Director Marcos Bonturi who launched the report in conjunction with Paul Maier, the Director of the EU Observatory on IPR infringements at the EUIPO, and Rupert Schlegelmilch, the EU Ambassador to the OECD. “Counterfeiters thrive where there is poor governance. It is vital that we do more to protect intellectual property and address corruption,” Bonturi continues. 

India and Turkey out of GSP

Yesterday, President Trump announced he plans to remove India and Turkey from the Generalized System of Preferences program because they no longer comply with the statutory eligibility criteria. Removing the two countries from GSP means their eligible products won’t receive duty-free access to the U.S. market.

India has failed “to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors”, says USTR’s press release. “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take necessary steps to meet the GSP criterion”, the announcement continues. Turkey’s removal from GSP “follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market.”

Modifications to the GSP list typically take effect on July 1 after the next annual review is launched but may also be announced and effective 60 days after Congress and the government of the country is notified. According to the USTR announcement, “by statute, these changes may not take effect until at least 60 days after the notifications to Congress and the governments of India and Turkey, and will be enacted by a Presidential Proclamation.” We will wait on the proclamation to have a better understanding of the timeline.