It's suddenly got a lot easier for major brands and retailers to make garments to the same formula for European and US markets.
The agreement by Swaziland, Botswana and Lesotho to sign interim economic partnership agreements (EPAs) with the EU now substantially increases the number of low-cost producing countries that can get duty-free access to both the US and the EU on exactly the same terms.
There are many countries around the world – from Central America, through Morocco and Egypt, to South Africa – that have duty-free access to both the EU and US. Rules of Origin, though, require duty-free garments to use raw materials from designated countries. For most countries, US and EU rules require fabric and trim to come either from different places, or from places without a competitive raw material industry.
Now, though, there's a clutch of countries with serious apparel-making capacity and skills, export experience, and duty-free access to both the EU and US using raw materials from anywhere – including India or China. Swaziland, Botswana and Lesotho join Mauritius and Madagascar, Kenya, Uganda and Tanzania (as well as a number of African countries with less developed garment industries) in a group that, now offer a unique advantage.
This won't transform brands' sourcing. But Levis are already making identical products for duty-free access to the US and EU in Kenya and the opportunity is getting greater – for global retailers as much as for global brands.
At a time when poorly-informed commentators are increasingly claiming non-existent protectionism by importing countries, it's worth pointing out that the past year has seen an almost unceasing stream of trade barriers in Europe and the US being dismantled. The new EU EPAs are just three more examples
Posts
