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[🇧🇩] Textile & RMG Industry of Bangladesh

[🇧🇩] Textile & RMG Industry of Bangladesh
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US trade body reiterates support for GSP revival

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The American Apparel & Footwear Association (AAFA) has expressed support for revival of the Generalised System of Preferences (GSP) to reduce costs faced by US citizens.

Introduced in 1976, the GSP was a trade scheme allowing least developed and developing countries to export goods to the US at a low duty, if none at all in some cases.

Bangladesh was suspended from it in June 2013 after two industrial disasters, the Tazreen Fashions fire and Rana Plaza building collapse, over serious shortcomings in labour rights and workplace safety.

The scheme was cancelled for all beneficiary countries in December 2020.

"The apparel and footwear industry encourages Congress to quickly pass the GSP Reform Act," said Steve Lamar, president and chief executive officer (CEO) of the AAFA, in a statement on April 15.

"GSP has always had bipartisan support, and the record long lapse has been unexplainable and damaging to American businesses, American workers, and beneficiary countries alike, all while handing a huge trade win to China," he said.

"This retroactive renewal is far more effective at making our trusted partners more competitive than misapplied tariffs will ever be," he said.

"This GSP program is also helpful to mitigate the costs faced by our nation's supply chains during this time of continuous disruption," said Lamar.

"Once renewed, this can have a very real impact on the cost and offering of everyday goods such as luggage for summer travel and backpacks for school in the fall," he said.

"We were pleased to see several proposed reforms, including measures to update the competitive need limitation mechanism and open a process to consider currently ineligible products," said Beth Hughes, vice president of the AAFA for trade and customs policy.

Bangladesh has been putting in the effort to enjoy the duty benefit on exports, State Minister for Commerce Ahasanul Islam Titu told The Daily Star over the phone yesterday.

Bangladesh has fulfilled 16 conditions for the reinstatement of the GSP and submitted the progress report to the United States Trade Representative twice.

However, on different occasions the US has been saying that Bangladesh needs to do more.

Prior to the suspension, Bangladesh was exporting goods, such as dry fish, tobacco items and ceramics and excluding the main export item, garments, worth $34 million under the GSP.​
 
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RMG industry's transition to circular economy
ATIQUL KABIR TUHIN
Published :
Apr 17, 2024 22:01
Updated :
Apr 17, 2024 22:01

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The ready-made garment (RMG) industry of Bangladesh has made considerable strides in increasing the number of green garment factories. So far with 213 factories certified by the U.S. Green Building Council (USGBC) in the Leadership in Energy and Environmental Design (LEED) category, Bangladesh can boast of being home to the highest number of green factories in the world. Moreover, five hundred more garment factories are also in the pipeline of receiving the LEED certification, which is a manifestation of the fact that an increasing number of apparel manufacturers are embracing environmentally sustainable and energy-efficient practices in their manufacturing process. Now the bustling and vibrant industry, with an annual export turnover of nearly $ 47 billion that is about 84 per cent of the country's total export earnings, is well positioned to take its sustainability practices up a notch by embracing circular transformation of the industry.

The RMG industry has so far been following a linear business model of "make, use and throw away" or "take, make and dispose". But the world is slowly but steadily transitioning from linear to circular production model. It is, however, heartening to see that stakeholders of the RMG industry started dabbling in circular economy model. In simple terms, the circular economy calls for eliminating maximum waste in the market by adopting a regenerative manufacturing system that treats waste as a source of new materials and new revenue. In this way, the requirement for virgin material can be reduced to a bare minimum or would not be needed at all.

In a circular system, products are designed and manufactured with such materials that they can be used, reused, repaired and recycled, thereby reducing waste and extending the lifecycle of materials incalculably. In this way, circular production method strives to ensure the majority of products or product materials do not end up as waste. It also embraces responsible sourcing of materials, reducing water and energy consumption and minimising waste at each and every stage.

Take the example of global sportswear giant Nike's formula of a circular economy for its products. It designs products in a way that they can be used, re-used, recycled, and composted at the end of their life. Nike says it is working to reduce its use of virgin materials and to increase its use of recycled materials.

The practice of circular economy is gaining ground worldwide because linear production system is not only negatively impacting the environment, but also leading to rapid depletion of finite natural resources. The European Union says by 2030 all textile products placed on the EU market must be made of recycled fibers, free of hazardous substances, and produced in respect of social and environmental rights.

Bangladesh is also experiencing environmental degradation of extreme measures. Textile and dyeing factories are one of the main culprits for polluting the rivers and canals and creating havoc to the environment.

Putting all of these issues together, embracing a circular economy is not just a choice, but a necessity for the RMG industry. If the circular economy model can be implemented in a substantive and meaningful way, it would be enormously beneficial for both the environment and business. It would also reduce the industry's pressure on natural sources. For all these reasons circular fashion can be a major thrust towards sustainable growth of the apparel industry.

However, when it comes to embracing circular business models, there is no 'one size fits all' solution. The procedure varies depending on the industry's context. As the second largest garment supplier in the world, Bangladesh's RMG industry has to deal with a huge volume of pre-consumer waste, not post-consumer waste. According to BGMEA, the apparel industry annually produces about 400,000 tonnes of pre-consumer textile waste. This waste is currently collected in an informal way, and only 5 per cent of it is recycled locally. The remaining waste is either incinerated in furnaces or dumped in landfills, which has a negative impact on the environment and human health.

To break free from the linear model of production, the RMG industry should prioritise upstream circularity, which refers to reducing waste at the source, during the design, production, and cutting processes. Technology can play a vital role here as innovations such as 3D printing and digital platforms for garment customization enhance efficiency and sustainability. These technologies enable a closer connection between manufacturers and buyers, fostering a sense of mutual responsibility for reducing pre-consumer waste to a bare minimum.

Upstream circularity will help reduce waste, but it will not eliminate waste. So the next stage should be to follow the principle of 'recycle and recover' through which textile waste (jhoot) can be turned into the fiber; and the fiber into fabric, and RMG products made from that recycled fabric. Recycling textile waste into new fabrics or products, also reduces the need for virgin resources. In this way not only is the pre-consumer textile waste eliminated, but also, according to an estimate, the industry can save as much as US$500 million a year.

To this end, a platform named Reverse Resources has been collaborating with manufacturers across Bangladesh as part of the Circular Fashion Partnership project since 2020. So far it has teamed up with about 170 manufacturers to segregate their waste and digitally trace it to recycling solutions. Clearly, this is the sort of solution BGMEA should bring into the mainstream if it wants to fulfil its Sustainability Vision 2030 where embracing circular economy is one of the key targets.

To build a circular ecosystem in the RMG industry, there is also a need for greater collaboration between all stakeholders, including brands, manufacturers, policymakers and waste management companies. Overall, there is a need for the development of a national circularity strategy, as well as fiscal incentives and other forms of support for factories that are investing in upstream circularity measures. The role of innovation is also of paramount importance for developing new circularity solutions for the textile industry. This includes developing new sustainable materials, designing for recyclability, and improving manufacturing efficiency. Factories that are willing to innovate and re-invent themselves by embracing this new business model will gain a competitive advantage over their peers because circularity matters for a sustainable future.​
 
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BD urges US to provide duty, quota free access on RMG items
22 Apr 2024, 12:00 am
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Business Report :

Bangladesh has urged the United States to provide duty free and quota free access on Bangladeshi RMG items made from US cotton.

Bangladesh also demanded of the US government for creating export opportunities for Bangladeshi products like pharmaceuticals, ceramics apart from RMG as well as simplifying further the registration process of pharmaceuticals.

The demands were placed at a US-Bangladesh TICFA Intercessional Meeting held at the Ministry of Commerce conference room at Bangladesh Secretariat here on Sunday.

Briefing reporters after the meeting, the head of Bangladesh delegation and Senior Secretary of the Ministry of Commerce Tapan Kanti Ghosh said that the RMG industry of Bangladesh is now more compliant than the past.

"The workers in the RMG industry represent the poor community. If the USA wants to contribute towards improving the living standards of this section of people, then the USA can provide duty free access," he added.

Citing that the USA has kept intact the duty free and quota free access of the products of LDCs of Africa, Tapan said such countries in Asia can also avail such facility.

The Commerce Secretary said that the government has already improved the labour condition and brought necessary legal reforms. "We've raised our arguments in the meeting that the Bangladeshi RMG items are worthy of getting duty free access in US market in overall consideration," he added.

Tapan said the government has also sought technological support from the US in boosting farm production alongside improving the preservation system.

Besides, he said the government has also sought support in standard certification in exporting agricultural items and ensuring necessary accreditation.​
 
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[h3]
US to look into 'unhealthy competition' in garment pricing​
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The United States International Trade Commission (USITC) is going to hold a hearing involving Bangladesh to see whether a recent rise in prices of garment items sourced from the country had anything to do with unhealthy competition.

The USITC found out that the prices the US paid for each unit of Bangladeshi garments had recently exceeded the average of the prices paid by America for garments sourced from different countries.

This prompted the agency to open an investigation to find out whether any anti-competitive incident took place.

The USITC is an independent, nonpartisan, quasi-judicial federal agency that fulfils a range of trade-related mandates, according to its website.

Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), is going to virtually attend the hearing on March 11.

The prices rose mainly due to adjustments brought about by American clothing retailers and brands to compensate for an increase in raw material and shipping costs during and after the pandemic, he said.

The price per unit had been rising at a moderate pace since 2017 while that offered by China has declined, the BGMEA chief added. The unit price offered by Bangladesh is currently $3.23, compared to $1.86 and $2.95 for China and Pakistan respectively, he said.

Given that Bangladesh still largely manufactures basic items, the average price level is well above the global average import price per unit paid by the US, he said.

Hassan also said recent geo-political tensions have added woes to global supplies, which were already struggling, and to the demand dynamics of diesel prices, resulting in record hikes.

"In recent years, our cost of production has gone up exorbitantly. Price of electricity has risen by 25 percent, gas by 286.5 percent, diesel by 68 percent, and similar impacts on transport and other factors are notable," he said.

Inflation has pushed cost of finance further up, leading to increased cost of production and cost of goods, he added.

Also, bank charges and municipality and city corporation fees, including different registration and certification fees, have significantly increased, said Hassan.

In the past decade, the industry invested millions of dollars to remediate factories, and is constantly investing in greener manufacturing, emission reduction and resource efficiency to meet emerging due diligence requirements, he said.

He hoped that the USITC would view the overall scenario instead of considering only cost and efficiency-based competitiveness.

At the same time, drawbacks such as a lack of local raw materials and absence of foreign direct investment in this industry also need to be taken into consideration, the BGMEA chief added.​

These middlemen sitting in the middle of New York are the scumbuckets. They will suck every drop of blood out of you as a worker while they amass Billions. Even if they are paying the same amount for Bangladeshi apparel exports like they did ten years ago, these middlemen are not happy.

Meanwhile I guess our poor Bangladeshi workers are just "happy to have a job" and are forced to work for pennies while these NYC middlemen profit and refuse to pay living wages (even Bangladesh living wages which are the lowest in the world).

Bangladesh does not even have quota or duty free benefits for exports to the US which other countries (Vietnam for example) enjoy.
 
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Apparel exports to EU jump 8.5% in Feb 2024

Infographic: TBS

Infographic: TBS

Bangladesh's apparel exports to the European Union market surged by 8.5% month-on-month to around €1.3 billion in February this year – the highest in the last four months.

However, shipments to the 27-nation economic bloc remained 18.6% lower compared to the corresponding month a year ago, according to Eurostat.

Bangladesh has witnessed the most significant decline in apparel exports among its competitors in the EU countries during the first two months of 2024. This trend mirrors a similar decline observed in the United States market during the same period.

SM Mannan Kochi, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), said apparel exports are facing a challenging time as most buyers are not paying proper prices.

He explained that exporters are losing competitiveness despite increased production costs caused by utility price and wage hikes.

He also expressed concern that the escalation between Iran and Israel may significantly affect exporters in the coming months.

Mohammad Hatem, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, echoed the sentiments of the BGMEA president.

He mentioned that inquiries from western buyers had increased in recent months, but many manufacturers have been unable to entertain their orders as buyers are offering low prices.

Hatem also noted that buyers are now looking for shorter lead times, but Bangladesh's shipment time has increased to 89-90 days from 50-60 days due to the gas crisis. Consequently, many western buyers are placing their orders in Vietnam and China instead, he said.

In January-February 2024, the South Asian nation experienced a significant decline in its apparel exports to the EU market, amounting to a decrease of 26.74%.

According to Eurostat, the statistical office of the European Union, Bangladesh's exports totaled €2.48 billion during this period, down from €3.39 billion in the corresponding period of 2023.

Exporters highlighted that despite a surge in global demand for apparel, Bangladesh's benefits were minimal due to prolonged lead times and escalating production costs.

Specifically, the country saw a decline in its knitwear exports to the EU in January-February 2024, amounting to €1.42 billion compared to €2 billion in the same period a year ago.

Similarly, the country's woven garment exports to the 27-nation economic bloc during the first two months of 2024 decreased to €1.06 billion from €1.38 billion in the corresponding period of last year, according to Eurostat data.

Recent data from the US Department of Commerce's Office of Textiles and Apparel indicates that Bangladesh has fallen behind its competitors in apparel exports to the American market during the January-February period of 2024.

According to OTEXA data, Bangladesh experienced a notable decline of 19.24% in its apparel exports to the US during the first two months of this year. This contrasts with China, which saw export growth of 0.48%, and Vietnam, which recorded an increase of 0.14% during the same period.

According to Eurostat, clothing imports by the EU from various countries witnessed a decrease of 15.31% to €12.53 billion in the first two months of 2024, down from €14.80 billion in the same period last year.

Specifically, apparel imports from China to the EU in the January-February period dropped by 13.12% to €3.33 billion, compared to €3.83 billion in the same period of 2023.

The EU's apparel imports from Turkey decreased by 10.69% to €1.54 billion, down from €1.72 billion in the same period of the previous year.
 
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