FW
"When the UK exits the EU, it will forfeit access to the Pan-Euro-Med (PEM) cumulation zone. Cumulation of origin is one of the ways to allow greater flexibility when it comes to using raw and semi-manufactured materials in the production process. It allows a member of a trade agreement to use originating products from other members. While in the EU, the UK has access to Europe’s cumulation zone known as the Pan–Euro–Med (PEM) zone."
When the UK exits the EU, it will forfeit access to the Pan-Euro-Med (PEM) cumulation zone. Cumulation of origin is one of the ways to allow greater flexibility when it comes to using raw and semi-manufactured materials in the production process. It allows a member of a trade agreement to use originating products from other members. While in the EU, the UK has access to Europe’s cumulation zone known as the Pan–Euro–Med (PEM) zone.
The PEM zone currently comprises the EU, the EFTA States (Switzerland, Norway, Iceland and Liechtenstein), Albania, Algeria, Bosnia and Herzegovina, Egypt, the Faroe Islands, Israel, Jordan, Kosovo, Lebanon, the former Yugoslav Republic of Macedonia, Montenegro, Morocco, Palestine, Serbia, Syria, Tunisia and Turkey (and partially Andorra and San Marino). It is based on trade agreements (FTAs, customs unions, etc.) with identical rules of origin signed between members.
The PEM Convention allows cumulation of originating materials between different countries within the zone. In some cases, the operations conferring origin of non-originating materials can take place across the entire cumulation zone. The latter, referred to as full cumulation, in the context of the PEM zone operates within the European Economic Area (EEA) and between the EU and Algeria, Morocco and Tunisia.
Significance of PEM
Leaving the PEM zone will impact all UK industries currently taking advantage of this arrangement. Under the PEM Convention, most clothing goods are subject to a double transformation rule. The double transformation rule of origin means that at least two substantial stages of production are needed to confer origin: in order for an item of clothing to obtain preferential origin, the weaving of fabric from yarn and the cutting and sewing of a garment from fabric would need to take place within the PEM zone.
For example, coats made in Morocco from both EU and Turkish fabrics can be exported to countries within the PEM zone. If Turkey and Morocco were not members of the PEM zone, Turkish inputs would be considered non-originating and the coats would not be eligible for a preferential tariff when re-exported to the EU (or vice versa to Turkey) according to the double transformation rule of origin.
Under full cumulation, qualifying processing does not need to occur within the territory of one single country. The different stages of production carried out across the cumulation zone can count towards the common origin of non-originating materials. For example, if non-originating yarn woven into fabrics in the EU is exported to Tunisia to be cut and sewn into suits, the final product is considered as originating in Tunisia. However, as full cumulation is not currently possible across the entire zone, the finished suits can only be exported under preference to the EU, Algeria and Morocco.
The PEM rules of origin favour local T/C companies. As the fabric used to manufacture goods cannot be imported from outside the zone, there is an incentive to retain most parts of the production chain within the zone. At the same time, the PEM zone can offer a number of benefits to T/C companies that face strong competition from exports from developing countries.
Access to raw materials such as cotton and flax, as well as to synthetic fibres, is essential to maintaining competitiveness. Price increases can also affect textile & clothing companies. For example, when India banned exports of cotton in 2010 and 2012, it caused price speculation in the market. Access to firms specialising in certain processes, such as dying in Tunisia or the spinning of fibres in Turkey, can be of equal importance. Finally, the relatively low labour costs in North African or Eastern European countries, such as Bulgaria and Romania, allow for the labour-intensive stages of production to take place there.
Impact on EU-UK FTA
The UK will lose access to the PEM cumulation zone once it leaves EU. Even if the EU-UK FTA is negotiated and in force before this occurs, the UK would also need to have agreements in place with PEM countries in order to benefit from access to the cumulation zone. Currently, UK producers can use originating materials from all PEM countries with which the UK has a bilateral agreement without losing the originating status. The final good, provided it fulfils PEM rules of origin, can be supplied/exported to all qualifying PEM countries. Under full cumulation, non-originating products can also be used since the processes undertaken in different countries can be counted towards originating status.
If the UK negotiates an FTA with the EU with separate rules of origin, the products manufactured in the UK would still need to comply with these rules to gain access to the EU markets. However, if, following the signing of such an FTA, the UK negotiates a similar agreement with any other PEM country, cumulation of origin between these two agreements would not be possible without renegotiating the EU–UK FTA rules of origin protocol.
The UK needs to decide between negotiating its own rules of origin with the EU on one hand and retaining the PEM rules on the other. It does not necessarily mean that the UK will be able to negotiate more flexible and less restrictive rules of origin than those of the PEM zone. The latter would allow for the expansion of bilateral cumulation under the EU–UK agreement to other countries within the PEM zone in the future.
Texfusion will be held in the United Kingdon from March 28 to 29, 2017. About 140 exhibitors from around the world are expected to showcase their products at the March 2017 edition. Texfusion is the first trade fair within the UK dedicated to international fashion fabrics and accessories, home textiles, functional fabrics and garment manufacturers.
Among the exhibits are lLcra, silk, synthetic, wool, jacquard, cotton and blends, denim, eco-friendly fabrics, embroidery and lace, fake fur, functional and sportswear, knitted fabrics, linen, prints, trims and accessories. It provides manufacturers and their agents the opportunity to showcase their products to the most influential buyers and designers on the UK fashion scene. The home textiles segment will feature fabrics for duvet covers, sheets, blankets, carpets, towels and kitchen wear. There is a new garment category addition from this year onwards which is completely dedicated to international garment manufacturers.
The technical section will display functional and sportswear linen, active wear, technical fabrics, waterproof and medical fabrics. The fair offers a professional and friendly atmosphere where visitors have an opportunity to source from the most important manufacturers in Asia, showing a wide selection of products and demonstrating their competence and experience in both design and production capability.
Apparel sales grew by three per cent last year in the US. Overall, the industry had positive performance growth in most categories. The growth of online retail was one of the most highlighted shifts of 2016. In 2011, online was only 11 per cent of total US men’s, women’s, and children’s apparel sales but in 2016 the number rose to 19 per cent.
Online’s continued growth has come at the expense of in-store sales, affecting more traditional apparel department, national chain, and specialty channels. The growth that occurred in the online, off-price, and mass channels came from a consumer focus on convenience, value and price.
Apparel consumer’s desire for a combination of comfort and style has sustained the growth of the athleisure movement. Athleisure, which is heavily driven by millennials but appeals to all age groups, continued to be a top growing apparel segment through 2016 with 11 per cent increase. Sales of tailored clothing increased five per cent and dresses retained their rank as one of the top performing categories in overall sales and growth.
Last year was also positive for jeans, which finally rebounded in 2016. The apparel industry is being pushed and pulled in different directions by consumers who are demanding something different, and looking to less traditional buying channels to find it.
Indigo yarn specialist Unitin, is adding and offering on stock service a new exclusive yarn. This new yarn’s main applications are seamless technology and circular knitting..
The new complete total look capsule collection is composed of body hugging, comfortable, sporty, chic and trendy denim items. This stretch indigo denim concept further enhances the idea of innovative knit denim as a counter-point to traditional woven denim fabric.
The indigo-dyed cotton eliminates the need to dye during the garment process, saving much water. It is available in a range of indigo hues and different denim tones can be achieved. Lenzing has previously worked with Unitin indigo yarns on a flat-bed knit project.
Unitin is the trademark of Industrias Morera, based in Spain, a textile industry specialized in the dye and finishing on piece and yarn. Industrias Morera has been in the textile business since 1924 and has four different departments: yarn die, piece dye, upholstery and denim.
Ralph Lauren, Massimo Dutti and Benetton are three of the clients of Industrias Morera. The denim of these three heavyweights of fashion is woven with the indigo-tinted thread of this company. A few years back Industrias chose to market the indigo-tinted yarn instead of offering only the tincture service.
The Scheme for Integrated Textile Parks (SITP) as launched by the Indian government has not worked as per plan. One reason is high rentals in some parks. There has been a lack of marketing efforts. No special benefits are available for investors in parks and many of the parks are not easily accessible.
Many SPVs were found violating norms as non-textiles units were operating from inside the parks. In fact, a report by Wazir Brothers has indicted my SITPs for not following norms. SITPs were launched in 2005 to encourage private investments and employment generation in the textile sector. The primary objective was to provide the industry with world class state-of-the-art infrastructure for setting up new textile units. The SITP was launched by merging two schemes, Apparel Parks for Exports Scheme and Textiles Center Infrastructure Development Scheme.
The parks would cover all segments of the textile industry such as spinning, weaving, knitting, processing and garmenting. These parks would include apparels and garments, hosiery, silk, technical textiles including medical textiles, carpet and power loom. There are suggestions SITPs should occupy a minimum 1,000 acres area, with infrastructure support in the form of readymade factory sheds, warehouse, effluent collection treatment and disposal systems, incubation centers and testing labs, first aid centers, with express connectivity to seaports and airports.
US cotton currently has a 36 per cent market share of the world cotton trade, and its increasing. The US took advantage of several competitors backing out of the market. India’s demonetization policy kept cotton out of export channels. Reduced export volumes from Pakistan and Uzbekistan also helped move US cotton. Currently cotton profit potential tops corn and soybeans in the Southeast, the delta and the Southwest.
The good news for US cotton producers is that China is reaching a point where it will have to import significant volumes of cotton to maintain a stable minimum reserve. In 2017 and 2018, the balance between China’s stocks and the rest of the world will be closer, with China holding about 39 million bales and the rest of the world holding about 44 million. As China has sold off some of its reserves, ending stocks are still high but are moving in the right direction, down from 112 million bales to 90 million bales.
With China virtually out of the market, other buyers, including Vietnam and Bangladesh, have taken up the space. A number of factors have emerged and will continue to develop in the near future to push US cotton prices up. US production could reach 20 million bales by 2020.
Global Organic Textile Standard (GOTS) has released version 5.0 of textiles standards. GOTS is the worldwide recognized standard for the processing of textiles made with 95 per cent or at least 70 per cent certified organic fibers.
The use of viscose and modal is now restricted to 10 per cent. It’s 25 per cent for sportswear and socks. Lyocell may be used up to 30 per cent because of its more sustainable manufacturing processes. The criteria for the additional fiber material are now stricter regarding environmentally improved and certified regenerated cellulosic fibers. For the first time GOTS will allow combined products such as prams with textile fabrics, bassinets, car seats or furniture with textile fabric upholstery to have certified and labeled fabric components.
Core provisions such as the minimum content of certified organic fibers and the general ban on use of toxic and harmful chemicals, conventional cotton, virgin polyester have been maintained. Version 5.0 includes the tightening of composition requirements with respect to regenerated cellulosic fibers. On the other hand, the new possibility of combined products with fabric components certified to GOTS helps include a range of products that could not carry the GOTS label in the past.
The Khadi and Village Industries Commission (KVIC) is promoting the use of banana fiber for making handmade paper bags, statues, pen stands and garments. Once the fabrics match the three categories of fineness, softness and durability, fine, soft and durable yarn is extracted from banana leaves and stitched into clothes.
The banana fiber is most commonly found in hot tropical climates. All varieties of banana plants have fibers in abundance. These fibers are obtained after the fruit is harvested and fall in the group of bast fibers. This plant has long been a good source for high quality textiles in many parts of the world, especially in Japan and Nepal.
Banana fiber was primarily used for making ropes, mats, and some other composite materials. With increasing environmental awareness, and the growing importance of eco-friendly fabrics, the banana fiber is finding application in other fields such as garments and home furnishings. In Japan, it has long been used for making traditional dresses like the kimono. It’s lightweight and comfortable to wear, and is preferred by people in Japan as summer wear.
Rugs made from banana silk yarn fibers are popular the world over. Banana fiber is also used to make cushion covers, neckties, bags, table cloths, curtains etc.
Creativity, sustainable technology, reliability and quality are the characteristics which have made Italy a global leader in manufacturing of textile machinery. Exports amount for more than 86 per cent of total sales. And 30 per cent of Italy’s revenue from sale of textile machinery derives from the production of technical and innovative textiles. Demand for such products has consequently also driven up demand for ad hoc machinery specifically designed for this sector. The offering promoted by Italy’s textile machinery industry is thus expanding to new demands of customers operating in this specific sector.
In recent years, the technical and innovative textiles industry has seen a great deal of development in many markets, and especially in Europe. Italy is the world’s second largest producer of machinery for the textiles industry. In the production of machinery for tanning, and for the footwear and leather goods industry, Italy accounts for over 50 per cent of world production.
Orders for Italian textile machinery for October to December 2016 period rose five per cent compared to the same period previous year. For the first nine months of 2016 there was a three per cent increase compared to the same period in 2015. Around 70 Italian machinery manufacturers are slated to take part in Techtextil, Germany, May 9 to 12.
China International Nonwovens Expo (CINE) will be held from June 21 to 23. The expo last year featured over 80 exhibitors, with nonwovens products for medical, filtration, building and other industries on display. It is ideally suited for companies in the fields of nonwoven and nonwoven products, machinery and ancillaries for nonwovens, raw materials and chemicals for nonwovens, and nonwoven industry related services.
China is the world’s largest producer, exporter and consumer of nonwoven fabrics, and over the past decade, growth in these three areas has been rapid. From 2011-15, nonwovens output grew on an average annual growth rate of 11.7 per cent. The country now occupies 40 per cent of global output. During this same period, sales of nonwovens in China grew 21.6 per cent while exports increased by 13.9 per cent.
From 2016-20, Asia is expected to occupy 47.1 per cent of the global market consumption share. Within Asia, China, India and Japan will account for 77 per cent of nonwoven consumption, with China alone predicted to comprise around 57 per cent of this consumption. Efforts to reduce industrial pollution in China have led to a surge in demand for filtration nonwovens. New requirements for cleaner air and water and lower carbon-dioxide output are driving growth in the filtration nonwoven industry.
