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Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
Forotex 2011  cash johnson
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Forotex 2011 cash johnson

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  • 1. Trade Negotiations UPDATE <ul><li>Cass Johnson </li></ul><ul><li>NCTO </li></ul><ul><li>FOROTEX 2011 </li></ul>
  • 2. Trade Update <ul><li>China loses share of U.S. market for the first time. </li></ul><ul><li>Lower cost Asian suppliers reap benefits, but so do Western Hemisphere suppliers. </li></ul><ul><li>Western Hemisphere: </li></ul><ul><ul><li>New trend after decade of declines </li></ul></ul><ul><ul><li>Volume and market share increase </li></ul></ul><ul><ul><li>Duty costs, fast response and new capabilities create new interest. </li></ul></ul>
  • 3. After Long Slide, West Hemisphere is Now Moving Up
  • 4. <ul><li>Developing countries’ internal apparel and home textile consumption trends - China </li></ul><ul><li>Substantial raw material cost increases occur globally—not just cotton – enhance duty free benefits </li></ul><ul><li>Rising energy and transport costs in Asia </li></ul><ul><li>Labor cost escalation across Asia with lower wage escalation in Western Hemisphere. </li></ul><ul><li>Apparel labor availability in China shrinks, while turnover increases. </li></ul><ul><li>Heightened U.S. speed-to-market demand. </li></ul>Global Sourcing Shift Drivers
  • 5. <ul><li>At Magic Show, Western Hemisphere suppliers quadrupled their presence – Executive Sourcing Summit on Western Hemisphere: “Way Beyond the Basics” </li></ul><ul><li>JC Penney’s, Abercrombie & Fitch, VF, Men’s Warehouse, Kohls, Walmart, Dollar Store are all increasing sourcing from the region </li></ul><ul><ul><li>Performance outerwear/activewear, men’s suits, fast fashion/jr women’s, designer jeans </li></ul></ul><ul><li>Denimatrix, Guatemala: Winner, U.S. State ACE Award (Award for Corporate Excellence) </li></ul><ul><li>Launched New CAFTA-DR Sourcing Database </li></ul><ul><li>www.DRCAFTASourcing.com </li></ul>Regional Developments
  • 6. Policy Issues <ul><li>Except for Korea, Colombia FTAs, no new significant U.S. trade legislation expected before U.S. election </li></ul><ul><li>Duty-free for Bangladesh and Cambodia very unlikely </li></ul><ul><li>With passage of Senate currency bill, new pressure on China to revalue faster </li></ul><ul><li>TPP (Vietnam) on slow track with many problematic issues, including textiles </li></ul>
  • 7. State of TPP Negotiations <ul><li>After 10 rounds, U.S. wants TPP done by July 2012: post U.S. elections more likely </li></ul><ul><li>Japan, Mexico and Canada want to join – adding complications to talks. </li></ul><ul><li>Many difficult areas: state-owned enterprises, labor, competition chapter, textiles and apparel, agriculture. </li></ul><ul><li>A FRAMEWORK AGREEMENT – last “FTA” </li></ul><ul><li>On Textiles : </li></ul><ul><li>U.S. proposing a “yarn forward” rule </li></ul><ul><ul><li>Vietnam opposing; first time in an FTA </li></ul></ul><ul><ul><ul><li>New Zealand, Aust. also opposing </li></ul></ul></ul><ul><ul><ul><li>Strong importer opposition </li></ul></ul></ul><ul><ul><li>Peru supporting; Malaysia somewhat supportive </li></ul></ul><ul><li>Other key textile issues unresolved: market access, customs enforcement, short supply </li></ul>
  • 8. Vietnam & Textiles <ul><li>2 nd largest apparel supplier to U.S. ($6.6 bil) </li></ul><ul><ul><li>Now two times larger than Mexico </li></ul></ul><ul><ul><li>Concentrates on U.S. – 55 percent of apparel exports </li></ul></ul><ul><li>VINATEX is the 10 th largest garment producer in the world – expanding rapidly </li></ul><ul><li>Uses mostly foreign yarns and fabrics (China) </li></ul><ul><li>Apparel exports to U.S. have more than doubled over last five years – up 10 % YTD SME (world – 0%); projected to double again by 2020 (full duty scenario). </li></ul><ul><ul><li>Average export prices have fallen 28% over last five years </li></ul></ul><ul><ul><li>Vietnam prices would be significantly below CAFTA levels if duties are taken out. </li></ul></ul>
  • 9. Vietnam’s Government & Textiles <ul><li>Five Year Plan for Textiles </li></ul><ul><li>21 subsidy programs – none notified to U.S. per U.S.-Vietnam WTO agreement on textiles </li></ul><ul><li>Vinatex NOT privatized – gov still controls main holding company </li></ul><ul><li>Loan discounts, state financing, free or discounted land, preferential tax reductions, subsidies for research and development, export promotion subsidies. . . </li></ul><ul><li>More info on TPP: www.ncto.org - issues </li></ul>
  • 10.  
  • 11.  
  • 12. VITA’s Apparel World Export Projections (bil)
  • 13. ‘ Yarn Forward’ TPP Activities <ul><li>Joint industry effort during Chicago round </li></ul><ul><ul><li>Guatemala, El Salvador, U.S. industry presentations/meetings </li></ul></ul><ul><li>25 trade associations from U.S., CAFTA, NAFTA, Andean, Haiti & AGOA countries urge tough textile rules – over 2 million workers </li></ul><ul><li>52 textile supporters in Congress send letter </li></ul>
  • 14. Questions? <ul><li>[email_address] </li></ul><ul><li>+202-822-8025 </li></ul><ul><li>www.ncto.org </li></ul>

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