Below is a collection of stories related to trade and government that may impact the sewn products industry around the world.
Hong Kong Country of Origin Rule Change
In an August 11th Federal Register Notice, U.S. Customs and Border Protection (CBP) announced that imported goods produced in Hong Kong will now be required to be labeled as made in China. The ruling is part of President Trump’s July 14th Executive Order on Hong Kong Normalization. Importers have until September 25, 2020, to comply.
The trade experts at Sandler, Travis & Rosenberg have pointed out that this could raise concerns that goods produced in Hong Kong will now be subject to the Section 301 tariffs the U.S. currently levies against Chinese goods.
Federal Register Notice | Sourcing Journal Article on the Topic
Phase One Trade Deal Review Delayed Speaking of China, the United States and China have delayed a review of their Phase One trade deal originally planned for this week. The postponement is reportedly due to conflicting schedules between both parties and wanting to give China more time to fulfill commitments to buy certain amounts of U.S. goods. Read more from Business Insider.
India Considers Non-Tariff Trade Barriers Meanwhile, the Indian government is considering a variety of non-tariff measures aimed at preventing neighboring countries from rerouting Chinese goods (including textiles) to India with little added value. The measures include quantity restrictions, more frequent checks at ports of entry, and raising the value-addition requirement. Read more from Reuters.
German Human Rights Law The German government is exploring a new human rights due diligence law that would require German companies to take measures to prevent human rights violations in their supply chains. If companies fail to comply with the law, they could face civil liability for damages and risk sanctions. The law has sparked significant debate over its practicality and potential impact on German small and medium-sized enterprises. Just-Style reports that The Association of the German Textile and Fashion Industry called the proposal “a slap in the face for the German economy.”
The law will most likely be proposed to the German Parliament sometime after it reconvenes this September. Some useful background information is available here. The Financial Times does a good job explaining the arguments for and against the law here.
Mali Is Now Eligible for AGOA
The Office of the United States Trade Representative (USTR) recently announced that imports of eligible products from Mali qualify for the textile and apparel benefits under the African Growth Opportunity Act (AGOA) beginning August 4, 2020. Mali has reportedly adopted an effective visa system as well as procedures to prevent the unlawful trans-shipment of textiles and apparel. The country has also made substantial progress towards implementing the customs procedures required under AGOA.
Bangladesh Gains Preferential Treatment
The Chinese government recently reduced tariffs on nearly all products imported from Bangladesh under its Preferential Tariff Program. The move could present a promising opportunity for Bangladeshi apparel exporters. Read more from Sourcing Journal.
Cambodia Loses Preferential Treatment Effective August 12, 2020, the European Commission has partially withdrawn Cambodia's duty-free quota-free access to the EU market under “Everything But Arms” (EBA) – the EU's trade arrangement for Least Developed Countries. Cambodian exports of garments, footwear, and travel goods will now be subject to the European Union's customs duties. The decision was made due to “serious and systematic concerns related to human rights ascertained in the country”.
European Commission Press Release | Just-Style analysis on the impact to the Cambodian apparel industry
And if all of this wasn’t enough, check out this piece from Just-Style describing Five Ways World Textile and Apparel Trade is Changing.