“Sourcing in the Americas” was the theme at the recent Sourcing at MAGIC
, held in late August in Las Vegas as part of the MAGIC Show and attracting exhibitors that included apparel and footwear manufacturers and fabric and fiber mills representing more than 700 companies in 40 countries.
Highlights included an Americas Pavilion hosted by MAGIC, the U.S. Department of Commerce and the United States Representatives Office and endorsed by major industry associations, and a two-day appearance by Francisco SÁnchez, Under Secretary for the International Trade Administration, U.S. Department of Commerce.
SÁnchez played host to some 75 manufacturers taking part in the Americas Pavilion, the largest contingency ever at the MAGIC Show focused on the Americas, showcasing the importance of the apparel and textile supply chain in the Western Hemisphere and its advantages relative to speed and proximity to the U.S. market.
Sanchez says the Administration has put a “full court press” on the National Export Initiative, which aims to double U.S. exports by 2014. With this, he said, will come an emphasis on improving trade promotion, increasing access to export credit, removing barriers for the sale of U.S. goods (especially for small- to medium-size companies) and “robustly” enforcing trade rules.
“I’m very bullish on your industry,” Sanchez said while taking part in a seminar entitled “Sourcing Opportunities in the Americas & The National Export Initiative.” He noted that brands and retailers are “seeing the options closer to home” and that it’s a “win-win to make the region more prosperous.”
The American Apparel & Footwear Association (AAFA) was one of the major groups supporting the Americas Pavilion. Asked about the importance of Sanchez’s visit to MAGIC, AAFA president Kevin Burke said: “Over the last year, we have seen a significant resurgence in our trade flows with several partners in the Western Hemisphere. MAGIC was a prime opportunity for Undersecretary Sanchez and the industry to come together for a constructive dialogue about fostering these relationships and finding paths forward in order to expand them through greater certainty and predictability. AAFA looks forward to our continued work with Undersecretary Sanchez as the Western Hemisphere grows as a viable sourcing option for the U.S. apparel and footwear industry. “
New Sourcing Website
A new DR-CAFTA online sourcing directory, www.drcaftasourcing.com,
was launched during Sourcing at MAGIC as well.
The directory is made possible through the financial and technical support of the Inter-American Development Bank, with support of the U.S. Trade Representative’s office and other DR-CAFTA governments, as well as trade associations such as the National Council of Textile Organizations, the U.S. Association of Importers of Textiles and Apparel and
the Textile and Apparel Business Council of Central America and the Dominican Republic.
So far, the website has approximately 70 manufacturing resources, but that number was expected to tick up following the site’s promotion at Sourcing at MAGIC. Major industry associations within each country are assisting in vetting the listings; however, manufacturers do not have to be members of the country associations to be included.
Exhibitor Bobbie Edelstein, Minnesota Knitting Mills, St. Paul, Minn., said: “I believe with the onset of the online directory that is being launched currently in conjunction with CAFTA-DR , [there will be] renewed interest in the textile industry and we will build a strong foundation for the textile trade to remain in the United States.”
Edelstein said there is clearly a collaborative push between the United States and the trading partners that form CAFTA-DR, which could result in increased investment in the States.
“I do believe the U.S. manufacturers have an advantage by offering better lead time and superior quality and [take] pride from knowing they are supporting job security within the United States and the textile trade industry,” she added.
Both on the show floor and in seminar sessions, there was talk of how Western Hemisphere business could be sustained and increased via the appropriate free trade agreements (FTAs). A Colombia FTA is of vital importance to both Hamrick Mills and Radicispandex, for example.
Jim Hopkins, vice president of 111-year-old Hamrick Mills, which has two vertical weaving facilities and is based in South Carolina, noted his firm has a customer “ready to go” in Colombia, “but we need an FTA.”
Mike Coran, CEO, Radicispandex, an Italian-owned firm that operates as a U.S. stand-alone division with a facility in Alabama that has an annual 13 million pound capacity, plus distributor warehouses in Los Angeles, Canada, Mexico and Peru, said: “Colombia could be an excellent market for us — we’re very anxious to see the FTA passed.”
Sanchez told Apparel he expects to Congress to take action in the next 90 days on FTAs with Colombia and Korea, noting also that the Administration is “insistent” on financial support for Trade Adjustment Assistance in conjunction with the FTAs.
Promotion group ProNicaragua, along with major U.S. firms doing business in Nicaragua, such as VF Corp., are ready to see movement on the extension of the Nicaragua TPL, which is set to expire in 2014.
Javier Chamorro Rubiales, executive director of ProNicaragua, says in the first half of this year, the value of goods produced in Nicaragua was up 27 percent and the volume was up 22 percent. He noted while U.S. brands and retailers are looking at the region with renewed interest, so too are Chinese businessman. “A lot of Chinese are asking about investment opportunities,” said Rubiales. “It’s obvious brands are moving there.”
Randy Price, vice president of manufacturing for VF Corp., which has $7.7 billion in annual revenue, said the Nicaragua TPL is imperative to VF’s Western Hemisphere strategy. He also noted that a company as large as VF needs 12 to 18 months to plan production and raw material input strategies and thus implored Sanchez and the Administration not to delay in addressing the extension. “We cannot wait until the next Congress,” said Price.
In looking at export opportunities beyond the Western Hemisphere, Sanchez also met with officials from the Port of Los Angeles and the California Fashion Association and announced that a pilot project was being launched that would assist California companies in exporting their apparel to China.
For information about Sourcing at MAGIC, visit magiconline.com
. The next edition will be held in February 2012.
Q&A with Francisco SÁnchez, Under Secretary for the International Trade Administration, U.S. Department of Commerce
Apparel: According to the Commerce Department, more than 64 percent of U.S. textiles and apparel exports are to the Western Hemisphere, and in 2010, the United States exported nearly $13 billion of textile and apparel goods to the region, an increase of nearly 20 percent from 2009. What specifically is included in this definition of exports?
Sanchez: These are aggregate figures for all textiles and apparel products, from yarn, fabric, trims and cut parts, to finished apparel items.
Apparel: And what is the percent or dollar breakdown between the categories?
Sanchez: Apparel exports to the Western Hemisphere, which include cut parts for assembly, were approximately $3 billion; textile mill products, which include yarn, fabric and made-up articles, such as table linens, were approximately $10 billion.
Apparel: Four countries in the Western Hemisphere —Mexico, Guatemala, Honduras and the Dominican Republic — have gained market share in the past year in terms of their export of finished apparel to the United States. Does the Commerce Department/Administration consider this a victory in the sense that manufacturing in this Hemisphere is economically beneficial to the U.S. economy?
Sanchez: Since 2009, there have been significant increases in imports of apparel from nearly all of our Western Hemisphere partners. We find this trend very positive. It shows strength of our trade partners’ apparel manufacturing and points to opportunities for our brands and retailers. Positive growth in exports of apparel creates economic stability in these countries, which in turns opens markets for our exports. As the Western Hemisphere is the major destination of our textile exports, strength in their apparel manufacturing is a positive development which will hopefully lead to additional opportunities for the U.S. textile industry.
Apparel: Is the Commerce Department’s/Administration’s measure of success for the National Export Initiative (as it relates to the textile and apparel industries) primarily dependent on export of finished goods only? If not, what other factors are a measure of success?
Sanchez: The goal of the National Export Initiative (NEI) for this industry is to encourage expansion of exports of both finished apparel and textile inputs. The NEI supports increased exports to established markets and expansion of exports to new markets.
Apparel: The dominance of countries such as China and Bangladesh (in spite of their recent challenges) has made sourcing in the Americas a hard sell to U.S. apparel brands and retailers in recent history. Can the tide really be turned and what global changes are taking place that may support this?
Sanchez: Apparel imports from the Western Hemisphere represented 18 percent of total U.S. apparel imports from the world. Apparel imports from the CAFTA region combined are larger than apparel imports from the number two supplier, Vietnam. The increases in imports of apparel from the region over the past 18 months demonstrate that change is already occurring.
There are many factors that influence sourcing decisions for this industry. I have learned here [at Sourcing at MAGIC] this week in the apparel business that speed to market, inventory levels and tariff preferences are some of the factors that impact sourcing decisions. Based on proximity to the U.S. market and strong, well-established trade relationships, the Western Hemisphere is well-positioned to grow.
Apparel: And, what are the biggest challenges the U.S. faces in exporting more of its apparel throughout the world?
Sanchez: In achieving market access for apparel exports, the challenges are maintaining transparency and ensuring that our trade partners live up to their bilateral and multilateral trade obligations. We encourage exporters to be aware of trade policies and practices in foreign markets, such as tariffs, entry procedures and requirements, and product standards and technical regulations.
We offer assistance to exporters at the International Trade Administration through our information portal, www.export.gov. Additional challenges are ensuring that U.S. products have fair and equitable access to global markets, that U.S. designs, copyrights and trademarks are protected globally, and that U.S. producers are not disadvantaged by illegal subsidization of foreign production.
Apparel: What are the Administration’s priorities in terms of necessary free trade agreements that need to be approved and implemented in order to support Western Hemisphere manufacturing and trade?
Sanchez: The Administration strongly supports Congressional passage of the three pending Free Trade Agreements with Korea, Panama, and Colombia. We have a well-established trade relationship in textiles and apparel with Colombia, which has benefited under the Andean Trade preference program. An FTA would only allow for greater potential trade because it would allow for long-term certainty for investors and for sourcing.