We are a little light on trade and policy news this month, so it seemed like a good time to ask: should we continue doing these updates? And, if so, are there any specific topics (tariffs, pending legislation, EU initiatives, trade agreements, etc.) that you would like us to focus on more? Email email@example.com and firstname.lastname@example.org with recommendations.
In the meantime, below is a collection of stories related to trade and government policy that may impact the sewn products industry around the world.
UK Cuts Tariffs for Developing Countries
On August 15, 2022, the United Kingdom announced the launch of the Developing Countries Trading Scheme (DCTS), which will cut tariffs on hundreds of products, including apparel, imported into the UK from developing countries. As noted in the UK Government press release, the new scheme will be implemented in addition to the thousands of products which developing countries can already export to the UK duty-free and will mean 99% of goods imported from Africa under the scheme will enter the UK duty free.
So Does China…
Similarly, the Chinese Government recently announced the country will extend zero tariff benefits on approximately 98% of taxable items from 16 least developed countries (LDCs) including Cambodia, Rwanda, Togo, and Djibouti. The policy will come into effect on September 1, 2022, and the benefits will gradually be extended to all LDCs that have diplomatic relations with China. Read more.
Somewhat Related: Speaking of Togo, the country’s government recently announced plans to adopt a textile and clothing policy covering the period 2022 to 2030 that would focus on increasing cotton processing capacity. Read more.
New CTPAT Requirements
U.S. Customs and Border Protection recently announced new minimum security criteria related to forced labor with which members of the Customs Trade Partnership Against Terrorism (CTPAT) will be required to comply. The new requirements, which must be implemented by August 1, 2023, include:
Code of conduct;
Evidence of implementation;
Due diligence and training;
Shared best practices.
Learn more in this brief from trade firm Sandler, Travis & Rosenberg P.A.
New U.S. Strategy for Africa
Last week, the White House released the new “U.S. Strategy Toward Sub-Saharan Africa.” The new plan represents a reframing of Africa’s importance to U.S. national security interests, and includes strategic objectives such as climate adaptation and post-pandemic economic recovery efforts, alongside long-standing goals of transparent governance, democracy, and security priorities. As explained by the Carnegie Endowment for International Peace, African countries and stakeholders will now be on the lookout for how this vision will be implemented and how it might intersect with U.S. congressional initiatives on Africa, including existing legislation such as the African Growth and Opportunity Act (AGOA). We will continue to watch for developments.
Calls to Ban Turkmen Cotton The Cotton Campaign, along with several apparel brands and manufacturers, are calling for the United States and European Union to block cotton products made with forced labor in Turkmenistan from their markets and hold companies accountable when they profit from forced labor. The outcry comes on the heels of a new report exposing state-imposed forced labor, including child labor, during the 2021 cotton harvest in Turkmenistan. Notably, the United States already banned the import of cotton goods from Turkmenistan in 2018 through a “withhold release order” issued by U.S. Customs and Border Protection (CBP). However, the Cotton Campaign argues that information on enforcement is “scant” and cotton products from Turkmenistan continue to be sold to U.S. consumers.
Proposed Changes to KORUS Rules of Origin According to our friends at Sandler, Travis & Rosenberg P.A., the U.S. and South Korea have reached a preliminary agreement on proposed modifications to the U.S.-Korea Free Trade Agreement (KORUS) rules of origin for certain fabrics of HTSUS heading 5408 made from textured and non-textured triacetate filament yarns of subheading 5403.33. The U.S. International Trade Commission is seeking written comments (due August 26, 2022) into the probable economic effect of these changes on U.S. trade under KORUS, total U.S. trade, and domestic producers of affected articles. Read more.
India Investigates Yarn Duty Circumvention India has initiated an investigation into alleged circumvention of the anti-dumping duties (imposed in 2018) on imports of high tenacity polyester yarn (HTPY or IDY) originating in or exported from China. This yarn (HS Code 54022090 of Chapter 54) is used for tire cord fabric, seat belt, geo grid, geo sling, single cord, coated fabric, conveyor belt, etc. Read more.
Trade Agreement Updates
Let’s take a quick look at some of the trade maneuvers happening around the world:
Pakistan and Turkey signed a Preferential Trade Agreement August 13th aimed at boosting bilateral trade up to $5 billion. Under the agreement, Turkey will offer concessions to Pakistan on 261 tariff lines, including immediate zero tariffs on 123 items. In turn, Pakistan will extend concessions on 130 tariff lines. Read more.
In July, the governments of Cambodia and Thailand signed a Memorandum of Understanding (MoU) on transportation and logistics that is expected to improve the competitiveness of Southeast Asia’s apparel supply chain and broaden prospects for buyers in the region. Read more here or here.
Also in July, Uruguay and China launched formal negotiations for a bilateral free trade agreement. Read more.
China and various African countries recently signed 14 agreements worth around $170 million at the Promotion Conference for China-Africa Economic and Trade Cooperation. The deals covered areas like regional cooperation, strategic agreement, project financing, investment cooperation, and trade procurement. Read more.
Bangladesh is making moves to join the Regional Comprehensive Economic Partnership (RCEP) in order to retain duty benefits once it makes the United Nations status graduation from a least developed country to a developing one in 2026. Read more.
Despite calls from Myanmar’s unions, the European Union has announced it does not plan to suspend its Everything But Arms (EBA) agreement with the country as it would only add to the economic difficulties its people have faced since the military coup. Read more.