Is Bangladesh risking even more violence?

It's gratifying to see the first signs that Bangladesh's long-running wage scandal might be resolved quickly. But we're very sceptical of any speedy action. We're now very worried that its government won't be able to ensure the honouring of promises it's made on behalf of the country's 4,500 garment factories. And about what might happen if workers realise those promises aren't going to be kept.
On April 28, the Bangladesh government promised a wage rise would be implemented by early August after Bangladesh's apparently endless cycle of violent garment-industry disputes had gone through a further twist the previous day. Till now routine – if devastating for the workers involved – grievances, like overdue wages, have frequently escalated from making a complaint known, through a demonstration, to arson, factory destruction, blockading major inter-city roads and riots in adjacent factories and violent, sometimes lethal, police repression within hours. But the grievances have almost always been about specific problems at individual factories which, if true, most other factory owners willingly agreed need to be resolved more or less to the protesters' satisfaction.
This week, though, the protests were about something much more fundamental: the workers wanted their minimum wage tripling – as do many observers, and even a number of buyers. The owners, collectively, don't – and have been trying as hard as possible to avoid making any commitments for years.
In fairness, it's not at all clear the Bangladesh garment industry can afford to triple its minimum wage. With awful infrastructure and corrupt and incompetent Customs clearance, the country competes at the cheap end of the market – and though many enlightened buyers want to see higher wages, few are so enlightened as to offer to pay more. But, whatever the rights and wrongs of the pay argument, it beggars belief that this week's demands can agreed to by 4,500 factories and honoured on 4,500 paydays with the right cash in workers hands – all in about the time it's taken the country's wage review board to rearrange a meeting the employers failed to turn up to in January. Last time minimum wages went up (in 2006!), non compliant factories were still being found three years later.
And the country's Labour Minister, Mosharraf Hossain, didn't say on April 28 that there'd be an agreement by August. It would, he claimed be "implemented before the month of Ramadan". This year August 11, and a date as familiar to most Bangladeshis as the date of Christmas to most Western children. He has no power to enforce this promise: even if employer representatives agree and he passes a law requiring implementation, he's not going to be able find cash for manufacturers unable to pay the new wages because power shortages mean garments can't get shipped on time. And though he didn't indicate a level of increase, it's highly likely the workers rioting for a tripled minimum imagine it's their claim, not their bosses' renegotiated variation that he's promising to pay.
So what's likely to happen on August 12 when (not if) a group of workers, irritated after a whole day at work with nothing to drink in the middle of the summer (it's Ramadan, remember?), realise what they thought was a government promise isn't going to happen?
Bangladesh isn't doing itself any favours by promising things its government can't guarantee. This summer looks like a great time to have an alternative source of supply.

 

Is the Indian cotton ban as important as people think?

Businesses throughout South Asia are getting very engaged in the consequences of the Indian government's ban on cotton exports.
And for many of them, the ban might have a huge impact. But are the rising raw material prices that provoked the ban really the biggest problem to local garment factories?
The real price of making a garment in South Asia and shipping it to the US or Europe has been subject to constant fluctuation over the past few years. Since 2007, space on a container, the price of oil and the price of cotton have all reached levels close to both their all-time highs and their all time lows.
So, depending on which periods you choose, it's not difficult to find a comparison that shows how dramatically prices have shot up. World cotton prices, for example, are currently about 80% higher than in March 2009. But cotton prices then were close to the lowest for 40 years – and today's cotton prices are still 25% lower than they were this time in 1995.
Commodity prices fluctuate, and cotton's been fluctuating wildly since the first bale of US cotton was shipped to England in the 17^th century. So one of the most important skills a garment maker needs is the ability to plan for likely fluctuations. And it's not just fabric.
Take a typical T-shirt. From India to Europe, averaging $2.83 in 2009. A garment maker quoting a few months ago on the basis that cotton would cost the same today as in March 2008 will find its normal 140 gramme raw cotton content is about 13 US cents (or 4.3% of average selling costs) higher than at last year's ultra-low levels.
But an Indian factory quoting in dollars and getting paid today will get about 10% less (about 29 cents a t-shirt) than a year ago when they convert their price into rupees. Indian currency revaluation is hitting garment factories' profits at least twice as hard as the centuries-old ups and downs of cotton prices.
Other people's problems might be even worse, though. Bangladeshi and Pakistani garment makers have been hit for the past year by near-endless unpredictable power outages. This has inflated energy costs – but for many, the havoc power cuts have caused production schedules is even more devastating. On average in 2009, Bangladeshi factories had to airfreight 3,100 tonnes of garments a month to the EU – or about 7.5% of their total European exports. By February of this year, production chaos had pushed the volume airfreighted to Europe up to 8,600 tonnes – nearly a fifth of the country's monthly total.
The effect on factory profits can be catastrophic. Seafreighting a T shirt from Bangladesh to Europe costs around two US cents a shirt. Airfreighting it averages 60-65 cents. The extra cost is five times as great as the inflated cost of cotton.
Rising cotton prices are stirring emotions in South Asia because they arouse the age-old squabbles between cotton growers, spinners, weavers and garment factories. All sorts of ancient scores present themselves for settling, and there's no shortage of reporters keen to describe the savagery with which businesses accuse each other of every commercial crime under the sun.
That's not the real problem, though: cotton prices invariably come down as often as they go up. The problem is much more fundamental.
Buyers expect apparel makers to quote an FOB price for a garment several months before delivery. Today's fluctuations in raw material costs – or the occasional need to spend a fortune expediting delivery - aren't new. Since garment making first moved offshore in the late 1980s, manufacturers were generally insulated from the unpredictability of input costs by emerging-market governments' habit of devaluing their currency. But since around 2004/5, it's the US dollar (which still dominates international garment contracts) that's tended to devalue against producer-country currencies.
Few garment makers have the resource to survive savage cost fluctuations. They can't walk away from a contract: by the time they're about to ship they've spent a fortune on making a garment that can be sold only to the buyer who commissioned it. They can't seek compensation for their higher costs: with today's competition between vendors, buyers just refuse. The harsh commercial logic of the industry's pricing system repeatedly drives businesses unable to cope with fluctuating input costs to bankruptcy.
And here's the most horrible irony of all. Those fluctuations are worse in a period of rising demand than in a slump. Far from taking the pressure off factories, the recovery in sales is going to squeeze many even further.
There simply is no good time to be a garment maker these days.

 

What Asian airport garment mountains are really telling us

Over a million kilogrammes of garments waiting shipment to the EU are frozen at Bangladesh's Dhaka airport, local freight forwarders are saying, because of the chaos created earlier in the month by the volcano-induced flight bans in Europe. Actually, there seems more to the mountains than an airline problem that's now a thing of the past.
Similar claims have been made about backlogs in Hong Kong and Sri Lanka. They too indicate serious underlying problems for the trade.
A million kilogrammes – a thousand tonnes – certainly sounds a lot. But Bangladesh exported 578,000 tonnes (or 578 million kg) of garments to Europe last year. The backlog is equivalent to half a working day's total exports. A serious disruption for the brands and retailers those thousand tonnes were destined for (and just as serious, but a great deal more expensive, for the manufacturers despatching them). But hardly trade-destroying.
And an even smaller proportion of the trade than first appears. In 2009, Bangladesh airfreighted just 3,500 tonnes of garments a month to Europe. But by February this year, said Abdus Salam Murshedy, president of the Bangladesh Garment Manufacturers and Exporters Association, 8,600 tonnes were airfreighted: the alleged "mountains" in Dhaka are just three days' worth of exports. They look huge, because the whole point of airfreighting is that goods don't hang around: a typical airport cargo warehouse has about half a day's worth of freight. Multiply that by six – and the pile looks high, but isn't going to take long to clear.
But they do highlight a far more serious question – why the amount of airfreighting has increased so much. Air freight costs about 25 times as much as sea freight, adding around 60 cents to the production cost of a T-shirt. No-one does it if they don't have to. Trade associations in Bangladesh blame the continuous and unpredictable power cuts, as the country's Power Development Board admits it has generating capacity for only two-thirds of the country's daily needs.
There's no doubt the shortage of power in many countries – especially in South Asia – is a real threat to their garment industries' future. It's serious in Bangladesh and Pakistan: it's a problem in much of India as well. There's no real evidence of serious plans to overcome the problem, and that must cast real doubt on all three countries' ambitious long-term plans for expanding garment production.
But increasing difficulty finding capacity for airfreighting garments from China and Hong Kong isn't down to power shortages. Explanations vary: shortage of workers or shortage of raw materials (which usually means garment factories putting off buying in the hope prices come down) might explain unforeseen growth: demand picking up faster than expected might explain why there's simply less airfreight capacity than there was.
It's not possible at present to be clear which it is. But the industry's ever greater demands for fast turnaround on bespoke orders from the other side of the globe are pushing manufacturers' capabilities to the limit. And often those limits aren't under manufacturers' control: there's very little a factory can do to sidestep a power shortage, for example, except install a private generator - which few can do, and involves extra cost for all.
After a couple of years where factories' biggest problem was a shortage of demand, rising demand makes supply pressures more likely. We don't see many people doing much about it

What’s the Next Big Thing in garment sourcing?

"What's the next big thing?" is the question thrown most often at us at conferences and the like.
In the past 20 years, the number of garments being imported into rich countries has increased sixfold – almost entirely the result of production being relocated (and often re-relocated) for greater efficiency.

 
But between 2010 and 2015, the market may be just as revolutionised as it was between 2005 and 2010 by some crucial changes in the trading environment. Above all, the imminent decline in the number of Chinese of working age – but also by further changes in Customs rules, in buyers' requirements, and in increasingly scarce and costly cotton and power supplies.

 
"The Garment Trade's Next Revolution: what's likely to change by 2015" reviews the changes likely to start transforming the industry again from about 2012, and makes specific, country by country, predictions about their effect on the garment trade in the leading 80 garment exporting countries.

 
Normally £500, it's just £400 to May 31. And initial buyers get a FREE copy of edition 2, when we revise our forecasts in the light of new events and reader and commentator feedback.

Why the Rupee Paradox is going to be even more destructive in a recovery

Today, the Indian rupee is worth about 11% more than it was in January 2009. The Pakistani rupee is worth about 10-11% less. And apparently both currency movements are bad for business.
In India, major garment exporters are saying the new, more valuable, rupee is killing their profits – to a point where several are reluctant to quote for new business. When this problem last happened early in 2008, the forex loss for many exporters seems to have run into billions of dollars – though even the order of magnitude of the loss is tough to find out, since the manufacturers and banks are still arguing about it.
In Pakistan, though, the Central Bank is blaming the Pakistani rupee devaluation for soaring potential bank write-offs. 63% of all loans Pakistani banks have recently decided are unlikely to be repaid are in the garment and textile industries. And the Bank believes that comes from the rupee's fall: their loans are in dollars, euros and yen, so interest and repayment are a lot pricier.
The Rupee Paradox seems to demonstrate that there's no economic condition in which garment exporters can make money. Either:

• Garment factories operate so near the edge, ANY change in the outside environment can tip them over, or
• The whole garment and textile industry is riddled with complainingitis. Businesses are so used to getting subsidies and protection, they'll moan about anything if there's the slightest chance they can con some easily deluded politician knot giving them some kind of help.

I suspect there's a germ of truth in (b): there's a long and dishonourable history in this business of perpetual complaint. But in reality, (a)'s nearer the truth.
Garment exporters everywhere get a brief from a Western buyer. They quote a price – usually aiming for about 10% net profit: they can't aim much higher, because competition from elsewhere is a pretty efficient profit minimiser. They make the goods, send the invoice and then: well, then pretty much anything. Between the quote and the invoice, all sorts of things can go wrong – and recently factories have been plagued with rising fabric and yarn costs and in much of South Asia, increasingly expensive and unreliable energy supplies. Minimum wages in some places are being put up significantly, and at very short notice (allegedly in Delhi by over 20%, though this seems to apply mainly to the least skilled only). Since none of these changes were budgeted for, net margins can be shredded to bits. For some, devaluation will indeed mean higher finance costs: for all, local currency upward revaluation will mean less cash in local currency coming in when the invoice is paid.
Businesses can't renegotiate with customers. Practically any change in trading conditions between the time a contract's signed and payment is received is gong to be bad for some businesses. And the problem, hard-wired into garment exporting, is likely to get worse for exporters as Western economies recover
During the recession, flat Western demand reduced some of the pressures that lead to energy shortages and growing raw material prices – and governments did something to try to minimise risks to their manufacturers. Once factories can't claim their markets are tumbling, governments are going to be less likely to offer subsidies – but inflationary pressures will inevitably grow. Western buyers, on the other hand, aren't going to be falling over themselves to offer higher prices.
The lesson, in our view, is that factories are just going to have to learn how to plan, budget and tender for the worst possible case. IN a recovery sales might be easier to get – but costs are going to grow faster, and scarce resources are going to get scarcer still. The Rupee Paradox isn't just proof businesses can always find something to moan about: it reflects the real fact that just about any change in circumstances is going to tip some factory, somewhere, into bankruptcy

Soaring cotton prices bring out the real industry tensions

Does having a thriving local textile industry improve a country's competitiveness in garment making?

Many people automatically think so. But it's surprising how rarely this seems to happen. But recent events in India and Pakistan might well be changing all that.

The increasingly bitter squabbles in India, Bangladesh and Pakistan about yarn prices show how little love there is lost between spinners, weavers and garment makers. The arguments have got seriously nasty. And that was before India was reported on April 14 to have decided on a 3% export tax on raw cotton, just days after a requirement on cotton exporters to register exports in advance and as it withdraws duty rebates on cotton exports.

The rulings, taken together, add about 4-5% onto the cost of Indian cotton for most Asian customers, and are designed to bring prices down on the domestic market. They coincide with Pakistan's reduction of the monthly legal cotton export limit from 50,000 tonnes to 35,000.

The restrictions were imposed after growing concerns in India about the scarcity and cost of yarn for garment making. Those concerns have been forcefully expressed by garment makers, and caused intense and bitter arguments between the garment industry, spinners and weavers.

The inter-sector squabbling has been intensified by confusion about what is actually happening. Since November 2009, raw cotton prices have increased 14% in India, while some yarn prices are claimed to have leapt 50% over the same period- leading many Indians to conclude spinners are somehow profiteering on substantial, but not extreme, raw cotton price rises.

Such comparisons can be highly deceptive for a commodity whose price has always been volatile. The average New York cotton price of $0.858 per pound in March 2010 was 51% higher than in April 2009, for example – but only 11% higher than in April 2008, and 25% lower than in 1995. Yarns on sale today aren't being made with yarns bought today.

But, as long as there's been a textile industry, growers, spinners, weavers and garment makers have always assumed the other bits of the chain were making money unfairly – and workers and management in each bit have been equally cynical about each other. Governments consistently intervene: a huge proportion of the economic history of England from 1100 to 1950 is about which party national policy was cajoled into favouring. And these tensions are behind the Law of Sourcing most people have most difficulty with: the fact that having a thriving local textile industry seems to undermine a country's competitiveness in garment making.

Whether it's Egypt, India or Brazil: hardly any country with a significant spinning and weaving industry has been able over the past five years to lever that industry into a real competitive advantage for its garment exporters. The graph below shows how countries with a string textile industry saw their garment exports fall between 2005 and 2009, while those without one – and therefore dependent on imported fabric and yarn – saw their exports grow. China, by the way, is the world's biggest fabric and yarn importer



This certainly isn't because buyers don't value having spinning and weaving nearby. Usually, it's because decades of industry dominance by spinners and weavers have distorted public policies: India and Egypt, for example, make importing most foreign yarn expensive, and Bangladesh makes importing Indian yarn time-consuming. This often prevents garment makers from getting the right raw materials.

The events of the past month, though, might imply all that's about to change. IN both Pakistan and India, governments, faced with a straight fight between spinners and garment makers, have sided with the garment makers – for the first time we've ever seen such a thing anywhere outside China. This might just be a straw in the wind. But governments may be beginning to understand that a textile industry needs to be focused on providing what its local garment makers want – and that a country gets competitive edge only when the two really do have a synergy.

If that lesson is being learned by governments, having an integrated textile and garment industry might well be to some countries' advantage. But unless they learn the lesson, governments will go on propping up industries for decades after their use has disappeared

Being nice doesn’t mean being honest

Should the US increase the amount of clothing Haiti may export duty-free?
Well, put like that, who could possibly say no? There's a Bill before the US Congress to increase the amount of clothes that can be made in Haiti from fabric made outside the Americas and get duty-free entry to the US. From 70 million square metres to 250 milion.
And, after all, as ex-President Bill Clinton put it, most of the extra garments produced "would be shifted production from Asia to Haiti, so there'd be no greater penetration of American markets and we'd be helping our neighbour and it could create hundreds of millions of dollars of investment."
Really? That's not quite how it looks to lobbyists, the National Council of Textile Organisations commented, which claimed to be "alarmed" at the idea and thought it "would cause significant damage and job losses to the industry". But they're just a bunch of protectionists, aren't they, and isn't it awful how they're stopping Haitians from recovering after the earthquake?
Well, yes they are bunch of protectionists. But why shouldn't they be worried that everyone else expects their members to pick up the cost of being nice to Haiti?
Because Clinton's just wrong to claim letting Haiti use more Chinese fabric will leave US jobs unscathed. He's even probably wrong to claim it would involve shifting production from Asia to Haiti. The first losers from such a change would be other countries in the Caribbean and Central America: they, after all, were the major losers in 2009 from the current Haiti third-country allowance. And that means less fabric woven or knitted in the US for use in Central American garment factories.
Now it's hard to predict how many US jobs would be lost as a result – though you'd have thought a smart Southerner like Clinton would understand the economy of where he'd grown up well enough to have inkling. But if I worked in the US textile industry – and spinners and weavers still employ a couple of hundred thousand people - I'd be damn miffed at ex-politicians happily denying that my job's threatened by other people's generosity on my behalf. I'd notice that ex-Presidents' pensions and healthcare aren't threatened by such gestures.
In fact, though, America's textile workers have done rather better out of the past few years than anyone could have expected. Back in 2004, their lobbyists were predicting China would have 60% or more of the US garment market: it's actually around 30%, depending on how you calculate it. Countries in sub-Saharan Africa, who get the same deal that's being proposed for Haiti, are capped at 750 million metres of fabric from any source apart from the US or Africa: last year they used just 250 million. With African exports to the US in continuing decline, the proposals for Haiti would still mean less Asian fabric will be imported duty free in the US, even if Haiti uses its entire allowance, than Congress authorized back in 2006, when they set the African cap.
There's obviously a strong case to be made for encouraging investment in Haiti, and for giving the country the same duty-free concessions offered to the poorest countries in Africa. Some African countries benefitting from those programmes – like Mauritius - are a great deal richer, and infinitely more stable, than Haiti.
So why can't the politicians just tell the truth?

Those workers seem to keep on getting tougher to find

There is of course no shortage of workers in the world.
But there's hardly a garment making centre on the planet that hasn't behaved as if there is lately. Illegal rings of smuggled Vietnamese garment workers in Russia and China. Allegedly soaring wage costs in Delhi – though, as we point out, there really is a great deal less to this claim than meets the eye.
Claims in Jordan and Malaysia that governments really have to make it a great deal easier to import foreign workers if the local garment industry is going to survive. And even in Vietnam, the national garment industry trade association believes urgent action is going to be needed to get enough garment workers to meet the country's export targets.
And that's before we start thinking about the problems China's got now – and that are going to get worse as its population decline starts to bite
Countries that just a year ago were terrified about massive job losses in the garment industry are now desperately trying to find enough workers. Can this be real?
Yes. Because we're seeing a number of quite different problems produce the same symptom. And all fundamentally change the way garment sourcing will change over the next five years

• In China, there really is a growing shortage of people of working age. So China will soon decide again it makes no sense to subsidise Wal-Mart by helping its garment exporters compete with Bangladesh. That's what it decided in 2006 – and acted on, until there was a real threat of mass unemployment as first the US market, then the European market, started to fall during 2008/9.
  
  Whether China decides to subsidise other industries, or briefly subsidise plans by the garment and textile industry to improve its productivity before killing subsidies altogether, is unclear. But by 2015, China's garment exports won't be subsidised. Indeed – unlike the case in Europe, for example - most of the VAT paid on inputs to garment exports won't even be refunded. The claim that China competes only because of artificially low prices will be forgotten
  In Malaysia and Jordan, there's the bizarre situation of a largely foreign-owned industry built on exporting imported fabric made up into garments by imported workers. Where even in the middle of a recession, it seems impossible to recruit local people. But that hasn't stopped the garment industry in Jordan asking for government subsidies. Or its Malaysian opposite number asking its government to increase public spending by banning more efficient foreign competitors from public procurement contracts.
  
  Some garment industries just won't be around. These two look exceptionally marginal – created by legal quirks, and failing to cope with he fact that as the developing world's economies expand faster than their populations, the low wages their garment industries are built on will inevitably disappear.
• The Vietnam problem is the interesting one though. Factories in Hanoi and Saigon can't recruit because the internal migration myth's lost its allure. Less than 20 years after it began to embrace capitalism, Vietnam's discovered its peasants don't believe big-city streets are paved in gold. They're happy to work endless hours – but don't see the point of dealing with big-city costs, when the world food boom makes real incomes back in the village go so much further than what they can earn on an urban assembly line.
  The gold pavement myth is collapsing all over Asia. Sooner or later, it's going to mean either higher garment prices or more investment in productive garment assembly lines.

How local industries deal with the demographic crunch, the increasing marginality of the marginal and the collapse of the gold pavement myth is tricky to forecast. We try to in a new report out on April 20. But it's the great conundrum of the next decade.
There just isn't an untapped pool of labour anywhere that can make garments efficiently. Sooner or later, Western buyers will need to find a way of dealing with this fundamental change in the rules of the game

Is diplomacy really returning to trade disputes?

America's backing down from confrontation with China over currency management almost coincided with its agreeing to work with Brazil on a solution to the anger its cotton subsidies are causing.
Both disputes – like America's handling of anger among its NAFTA partners over bans on foreign trucks and foreign manufacture of airport security uniforms – demonstrate an important principle of international trade that's discussed far too rarely.

• America's working agreement with Brazil involves the US making concessions to Brazil that compensate for the damage US cotton subsidies have done to Brazilian businesses. These include programme to make it easier for non-cotton exporters in Brazil to sell to the US. American cattle breeders, for example, will now face tougher competition as a result of the subsidies the US has been giving cotton growers
• Mexico's sanctions against US exporters hit a wide range of US industries – few connected to the freight industry protected by America's illegal ban on Mexican truckers driving merchandise into the US
• The agreement with Canada, arrived at to compensate the Canadians for America's breach of the NAFTA treaty by banning the use of Canadian manufacturers for airport security uniforms, opens up US government procurement to a much wider range of Canadian suppliers
• The argument over Chinese currency management isn't just between Americans wanting China to increase the value of the Yuan and Chinese who don't. We're all used to America retail organisations arguing against measures that put prices up: but what's new is the range of Chinese businesses that want their currency to increase in value this time. Chinese steelmakers want the cost of raw materials from Australia to fall: airlines want to see their finance charges come down: computer makers just don't want to upset America

Lobbyists for a particular industry love to portray trade rules as being in the national interest. In fact, practically any rule a government invents is going to damage some of its businesses and workers, and help others. Lobbyists always try to hide this. It's much easier to blame devious or dishonest foreigners than to admit that something likely to increase job prospects in your town will create job losses in he town five miles away. Or in your next door neighbour's family.
In the past two months, the US has been forced to recognise that widely-praised support for bits of the textile industry is going to damage business prospects for other Americans. And, increasingly, Chinese businesses are admitting their interests and those of low-margin exporters like garment makers aren't perfectly aligned.
As governments grasp the complexity of today's world, more and more trade dealings will have to be discussed quietly, away from oversimplifying lobbyists and politicians. That's why – as our first review of the lessons the recession's taught us showed - the most important lesson of the past 18 months is how very, very few pieces of protectionism have been enacted by rich countries.
The corollary's more subtle, though. Trade agreements are going to get to cope with a world that's a million times more complicated than lobbyists like to depict. And sooner or later, politicians' demands will change with them

Whatever happened to all that protectionism then?

Throughout the recession, we were always being told about all this protectionism that was being created.
And, as far as the garment industry's concerned, we're still looking for it.
The EU, US, Japan and China between them account for 86% of the world's spending on clothing. And this is what they did during the recession (ie from 2008):

• China extended duty-free access to its markets to all of SE Asia. It enacted no new barriers against clothing imports, though it might have tightened up rules favouring local manufacturers pitching for government contracts. It undoubtedly poured hundreds of billions into helping its manufacturers compete in export markets. But hardly anything to keep imports out.
• Japan extended duty-free access to its markets to all of SE Asia. We can find not evidence of anything to make it harder for foreign suppliers to sell garments into Japan: indeed the Japanese government has even paid for substantial training of Bangladeshi and Burmese manufacturers in selling to Japan.
  
• The EU removed quota restrictions on China. It offered no-strings duty free access to most producers in Africa and the Caribbean. In return, it declined to remove anti-dumping duty on Chinese and Vietnamese shoes earlier than planned
  
• The US removed quota restrictions on China and Vietnam. It improved duty free access for Haiti, Peru and Mauritius. IN return it imposed a ridiculous and counter-productive ban on foreign procurement of airport security uniforms and banned Mexican truck from driving in the US
  

That's it. Millions of acres of forest chopped down for paper to print "wall of protectionism" stories – and they all amount to a bans on foreign T-shirts for security staff.
Moral? The world of garment making is just too messy these days for new trade barriers. Like the horse and cart, they're last century's answer to last century's problems.

Outside the odd theme park, we're unlikely to see much of them in the future, either

Now the recovery’s officially started…

Today's story that there was real growth during March in US clothing stores' like for like sales compared to 2009 seems a pretty good moment to assume the recovery, at least in the US, is now officially beginning.
There'll be a fair amount of bad news still to come, of course – and recovery's nowhere near in sight in Japan's clothing sales. But this probably marks the watershed when we should start working on the assumption our business is mostly going to be concerned with the challenges of rising demand, rather than sales collapses.
So we're going to be looking from now on at giving the business the help it needs planning for recovery, rather than managing amid decline. Our "World in 2012" report is a good example of that.
But it's worth remembering the central finding of our 12 Laws of Sourcing: What the recession didn't cause, a recovery won't cure. Most of the world's garment makers face serious competitive problems. Not just on price, but in:

• The cost and availability of raw materials and power supplies
• Food inflation continuing to hit garment workers harder than most – with consequentially serious upward pressure on wages
• Unpredictable currency rates
• Poor internal transport and inefficient, dishonest Customs procedures
• Poor understanding of buyer needs
• IN some cases. Limited local availability of the technical support needed to deal with importer-country regulations, such as the EU's REACH.

Over the next few weeks, we'll be analysing producer countries' ability to cope in the new world, and looking further at the lessons of the recession. Tomorrow will be our first: all that protectionism the recession unleashed. Didn't it?