A report by the General Economic Division of Bangladesh says the country will face an uphill task in convincing major trading partners and regional blocs to sign free trade agreements (FTAs) because of higher tariffs as it looks to retain duty benefits after its graduation from the LDC group, according to a government report.

According to the report titled "Impact assessment and coping up strategies of graduation from LDC status for Bangladesh, ‘currently the country does not have any bilateral FTA with any country.

In December, Bangladesh struck preferential trade agreement (PTA) with Bhutan, its first bilateral trade agreement, as it looks to retain duty-free market access after it becomes a developing nation in 2024.

Under the deal with Bhutan, Bangladesh will get duty preference for 100 goods and extend the same benefit to Bhutan for 34 goods.

Bangladesh may ink PTA with Nepal soon. Besides, the government is in negotiation with 11 more countries to sign FTAs.

Post-LDC, Bangladesh may also have to negotiate a trading arrangement with the EU and the post-Brexit United Kingdom to ensure favourable access to the markets, which account for more than 60 per cent of exports from the country.

Beyond that, Bangladesh may seek more bilateral or regional FTAs if the projected trade creation (trade growth) contributes to growth and employment creation.

The Cotlook-A index has reported a sharp decline in the cotton prices for 2020. The prices slipped to 63.53-81.02 cents per pound in 2020 compared to the prices of 70.75-87.25 cents per pound in the prior year. The index remained in between 65.00-70.00 cents per pound from March-August 2020 and was lowest in April at 63.53 cents per pound.

The cotton prices moved down with decrease in global cotton demand by 7.60 million bales, or 6.40 per cent in March 2020, according to United States Department of Agriculture’s (USDA). The reduction was due to Covid-19 impacts on countries around the world.

It represented a loss of around 3.5 weeks of global spinning or about 16.00 per cent of the expected spinning in March through July based on the March USDA forecasts. The USDA report also noted that Covid-19-driven changes in behaviour and regulations significantly impacted the supply chain of the cotton sector. Recent travel restrictions in India, Pakistan, and Vietnam were likely to have similar impacts on cotton supply and demand in the short-term.

In addition to physical disruption across the global supply chain from farm to retailer, global cotton end-use had slipped amidst large portions of the global population limiting activity outside their homes or confined by stay-at-home orders and with many “non-essential” businesses including apparel stores closed. The two largest importers of apparel, EU and US, saw a widespread closure of shopping malls and retail stores, while three-quarters of US population were under travel restrict

One of the world’s largest apparel, footwear and accessories companies, VF Corporation has disclosed the list of suppliers from Tier I to Tier IV in a consolidated, downloadable file. As per a Textile Focus report, VF launched in an initiative to map 100 of its brands’ most iconic products by December 2021. The company has published the origin and development of 46 of its products online. This new data allows the company to trace the full end-to-end supply chain, from raw materials conversion to product distribution. Its teams can use this data to improve its sustainability initiatives and labor working conditions.

In addition, the company can translate the data into geographical maps and publish its traceability disclosure list on its website. This offers its stakeholders and consumers visibility into the various tiers of the company’s supply chain. An American apparel and footwear company, VF Corporation was founded in 1899. The company operates more than 30 brands into three categories: Outdoor, Active and Work. It controls 55 per cent of the US backpack market with the JanSport, Eastpak, Timberland and North Face brands.

Urged by leading US fashion industry and retail groups, the US Customs and Border Protection withheld release order to detain all cotton products produced in mainland China's Xinjiang Uyghur Autonomous Region. In their joint letter, the American Apparel & Footwear Association, the Footwear Distributors of America, the National Retail Federation, the Retail Industry Leaders Association and the United States Fashion Industry Association had urged the Congress to take action on imports from the XUAR.

The letter also urges for the development of a transparent, tiered, risk-based approach to enforce new forced labor; a clear, transparent and evidence-based process for implementing both current and future regulations; development and implementation of cost-effective technologies and innovative approaches for traceability; and establishment of the California Transparency in Supply Chains Act as the basis for the federal disclosure requirement on what companies are doing to prevent forced labour and human trafficking in their supply chains.

Leading clothing and footwear materials producer, Sympatex plans to convert more than 25 per cent of the raw materials required for membrane to bio-based sources, originating from various organic waste streams. Sympatex will also ensure the membrane retains its high performance values in terms of breathability as well as water- and windproofness, besides remaining fully recyclable at the end of its life cycle.

DSM, Sympatex's long-standing raw material partner, will help the company convert its production facilities to renewable electricity sources In this way, DSM will support Sympatex, as the first signatory to the UNFCCC Climate Charter for Action for the Textile Industry (now signed by over 100 brands and associations), to reach another milestone on the road to climate neutrality several years earlier than planned

Specifically, incorporating Sympatex membranes into their collections will help its brand partners fulfill a major climate charter commitment – reducing CO2 emissions by 30 per cent compared to 2015 – much faster. One of the first brands to benefit from this would be Mammut, which will hit stores with a Sympatex collection in the coming winter season.

India’s commerce secretary Anup Wadhwan said, India does not agree with the United State Trade Representative’s report that accuses it of discriminating against American company by levying a two per cent equalization tax on foreign e-commerce firms. As per Economic Times, last month, an USTR investigation accused India of discriminating against the US companies by levying a 2 per cent digital services tax on e-commerce supply and being inconsistent with international tax principles.

Wadhwan said, jurisdiction that offers economic benefit needs to be taxed. He added that the OECD (Organisation for Economic Co-operation and Development) is also moving in the same direction.

Pakistan’s cotton production declined 35 per cent to 5.57 million bales till January 31, 2021. The country had produced 8.487 million bales of cotton during the same period last year. This decline is attributed to climate change and increase in the sugarcane production area, wiping a vast area of the cotton belt.

Of the total production, textile mills bought 5.046 million bales while 70,200 bales were picked up by exporters. Currently, only 90 ginning mills are functioning in Pakistan. Cotton production in Pakistan is integral to the economic development of the country. The nation is largely dependent on the cotton industry and its related textile sector, and the crop has been given a principal status in the country.

Cotton is grown as an industrial crop in 15 per cent of the nation's land during the monsoon months of May to August, known as the Kharif period, and is grown at a smaller scale between February and April. Record production of cotton was reported at 15 million bales of 470 pounds each in the form of phutti during 2014–15, which was an 11 per cent rise compared to the previous season.

A new report by the Council of Fashion Designers of America accuses the fashion industry of favoring white men for executive roles. The report states, 63 per cent of the blacks reported low appointment in executive positions, leading to an increase in pressure to perform and represent their identity.

Titled State of Diversity, Equity and Inclusion, the report said that 57 per cent of black fashion industry employees believed their company was doing enough when it came to racial and gender inclusivity, compared to 77 per cent of their white colleagues. Less than half of black employees urged for inclusivity measures to bring about a permanent change.

Around 37 per cent black employees reported supplementing their income compared with just 23 per cent of their white counterparts. The study also found that the low-paying nature of internships affected black employees’ subsequent chances of employment. The report surveyed 1,000 fashion industry professionals, across 41 companies and three focus groups, during the autumn of 2020.

As a part of its preparations for COP26 Climate Summit, the UK government has launched the Forest Agriculture and Commodity Trade (FACT) Dialogue. As per reports by Business Green, the FACT Dialogue's founding partners plan to develop a shared roadmap for the transition to sustainable supply chains and international trade and to take action to protect forests while promoting development and trade.

Brazil, Liberia, South Korea, and the EU are among the 18 founding members of a new forestry protection coalition with South Korea, Liberia, Nigeria, Argentina and EU being the new members.

As part of the FACT Dialogue a taskforce that unites more than 25 leading figures working on sustainability will channel their expertise and provide advice to the governments who sign up to the initiative throughout the year. The taskforce has been convened by the Tropical Rainforest Alliance, the World Economic Forum group that is the FACT Dialogue's official non-governmental partner.

On January 31, 2020, when Brexit came into force it was expected to ease trade relations between the Europe and the UK. But, one month since the conclusion of the trade deal, things are far from smooth for luxury brands in both regions. As a Vogue Business reports shows, 20 of 57 luxury brands that operate in both UK and Europe face delays in product deliveries. Additionally, customers are being burdened with unexpected duties and taxes on their products. Brands are being taxed for product returns, affecting their profit margins. Luxury firms like the London department store Fortnum & Mason and Kate Spade New York, are being forced to suspend sales to Europe, until things work out.

Increase in courier charges and import duties

Consultants and industry experts expect the situation to improve soon. However, they believe, Brexit has made trade between the two regions more costly. Simon Cotton, CEO, Jonhstons of Elgin says, it has increased courier charges between the two regions with firms charging over £4.50 for a parcel delivery between the UK and EU alongwith potential additional administrative costs. UK companies sourcing their products from outside Europe have to pay a duty on import of products besides an extra charge for exporting them. These products can achieve a tariff-free status only if they fulfill the complicated rules of origin, adds Aruni Mukherjee, Director-Indirect Tax, KPMG UK.

Troubled by this, retailers like John Lewis have temporarily halted exports to Europe while others have declined to pay the extra duties or taxes. Amazon has withdrawn its products from the Northern Ireland market though retailers like Robert Ettinger, CEO, of namesake brand has received several inquiries from brands for making products in the UK.

Product returns and trade shows

Besides being burdened with extra duties and taxes, retailers also face additional charges on product returns by customers. Post Brexit, a product returned by a European customer to a UK brand and vice versa attracts additional duties and taxes even the brand has already paid a duty while shipping the product. UK government advisors have recommended splitting the supply chain into two parts and handling shipments and returns separately with the UK and EU. However, such a solution is not feasible for smaller businesses like the womenswear brand Cefinn.

According to Adam Mansell, CEO, UK Fashion & Textile Association (UKFT), Brexit may also lead to an increase in freight levels once stores in the UK reopen, and brands move through stock imported before Christmas. Though European brands have not increased the average price of goods in their British online stores, their costs are eventually likely to increase as Mastercard plans to increase its fees for customers using a UK card to buy a product from an EU retailer, says data from BenchMarque by Deloitte.

The UK fashion industry and retail sector is yet to experience the full effects of post Brexit laws like the government’s abolition of its VAT (Value-Added Tax) retail export scheme. It may face further challenges post pandemic in the form of extra costs that retailers may have to bear for showcasing their products at European trade shows. The future for retailers certainly seems challenging.