AAFA Weekly Brief
January 10, 2017
Supply Chain
January 6: One small business owner gets candid about the real costs of running a clothing label — and why you should care. On [January 2], Liz Pape, founder and CEO of Nashville-based clothing label Elizabeth Suzann, posted a story to her company’s blog titled "Money Talk" that, well, got a lot of people talking. (Source: Racked)
January 5: Mexico’s minimum wage just went up 10 percent and gas prices are set to go up by more than double that. ... Wages were raised, according to the council, to restore purchasing power in the country, and considering roughly 15 percent of Mexico’s workers earn minimum wage, the hope is that they’ll have more money to put into the economy. The nominal wage increase may not have the desired effect, but it could be enough to send costs up for those importing goods from Mexico. (Source: Sourcing Journal - article unlocked)
January 6: Bangladesh — on high alert for possible terrorist attacks — posted the largest increase in apparel imports to the U.S. among top 10 suppliers in November, the Commerce Department’s monthly trade report showed Friday. ... The State Department revealed Thursday that the Islamic State terrorist network issued a threat targeting apparel buyers in Bangladesh in October that could negatively impact garment production and orders in the country this year. ... [Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association,] said the ISIS threat revealed by the State Department remains a major concern. (Source: Women's Wear Daily - login required
Milgram Freight Services
January Issue: History will probably record that 2016 was a tough year for trade. U.S. trade policies came under withering criticism during the 2016 U.S. Presidential election with nearly every major and minor Presidential candidate criticizing trade deals – ranging from the two-decade old North American Free Trade Agreement (NAFTA) to the recently negotiated Trans-Pacific Partnership (TPP). ... So what will 2017 bring? (Source: Fashion Mannuscript, op-ed by AAFA's Steve Lamar)
January 8: Corporate tax reform has rightly been identified by the president-elect and congressional majority as an immediate priority. There is no question that the status quo — with the United States having the highest statutory corporate-tax rate among major countries and companies holding huge cash hoards abroad while awaiting a break on repatriation — can be improved. Unfortunately, the potential reforms identified by House Speaker Paul D. Ryan (R-Wis.) and President-elect Donald Trump appear likely to do significant damage to the tax base and to the U.S. and global economies. (Source: Washington Post)
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Brand Protection
January 9: On the campaign trail, Donald Trump threatened to crack down on China’s "outrageous theft" of U.S. goods. Now, as president-elect, he’s huddling with a company that the U.S. government just labeled as a haven for counterfeits. On Monday, Trump met privately with Jack Ma, the founder and executive chairman of Alibaba Group, a China-based tech giant whose online platform for small sellers — an eBay-like website called Taobao — has long faced criticism for pirated items sold on its platform. ... Last year, for example, an organization representing auto parts manufacturers told the U.S. government that the "the majority of automotive parts, tools and equipment marketed with their brands on Alibaba Group’s family of websites are counterfeits." The American Apparel & Footwear Association also "strongly urge[d] that Alibaba and its constituent platforms, including Taobao" be included on the government’s annual name-and-shame list. (Source: Politico)
January 9: India's consumer goods and retail sector is predicted to see sales soar by 40% over the next three years – making it the fastest-growing emerging market. Of this, it is estimated that brick-and-mortar sales will rise by a mere 10%, meaning that the bulk of growth is expected to come from online purchases. ...While the convenience offered by the Internet has prompted traders to move their businesses online, it has also presented a whole new set of challenges. E-commerce is also proving highly attractive to counterfeiters, especially given that the Internet allows them to remain anonymous. ... In India, it is estimated that about 80% of consumers buying counterfeit goods are victims of deception. Counterfeiters use photos and descriptions of genuine products to attract consumers, but then supply them with counterfeits. (Source: The Fashion Law)
January 5: The ["notorious market"] designation, which carries no penalty beyond reputational damage, ought to encourage Alibaba to clean up its act. Judging from the company’s reaction, that isn’t likely to happen soon. "The USTR’s decision leads us to question whether the USTR acted based on the actual facts or was influenced by the current political climate," Alibaba President Mike Evans said on Dec. 21. CEO Daniel Zhang added that "it wouldn’t come as a surprise if we encounter other situations similar to that of ‘Notorious Markets’ in the future, where protectionism leads to malicious acts." The evidence is not on Alibaba’s side. (Source: Wall Street Journal)
Naylor Association Solutions

In Brief
Keynotes announced for AAFA Executive Summit! Each year, the AAFA Executive Summit brings together top executives from retail, apparel, footwear, and fashion accessory brands from around the globe. This March 1-3 in Washington, D.C., Todd Kahn of Coach and Chief White House Correspondent Major Garrett will keynote the event. Additionally, Governor Mitt Romney will be a special guest speaker. This year's theme, "Rebels, Influencers, & Transformers," will include insights from thought leaders representing Abercrombie & Fitch Trading Company, Birchbox, Loomia, Lululemon Athletica, New Balance Athletics, Inc., Strypes, Shopshops, TexOps, The Doneger Group, and Xcel Brands! See today’s press release.

Spread the word! AAFA @apparelfootwear just announced these exciting #AAFASummit17 keynotes!

Government Relations opportunities: Did you know that the Government Relations Committee hosts a conference call every month to discuss recent trade, legislative, and political developments, and how they may impact your business? The group meets for its monthly call this afternoon. To enroll in the committee, contact Steve Lamar.

Hear from AAFA CEO and Board Leadership: AAFA staff continues to receive many calls and e-mails with regard to the changing of the guard that is happening this month. We're hearing concerns around a number of issues including NAFTA, trade with China, border adjustability taxes, tariffs, Made in USA, and what potential tariffs or tax laws could mean for your business. Rest-assured, AAFA is actively engaged with leadership in Washington on all fronts. Stay tuned for additional member updates. In the meantime, remember to register for our member-only call this Thursday, January 12. See AAFA Events below.

See all of AAFA’s latest letters, comments, and testimony here.

Congress and government agencies solicit comments on a range of issues that may affect your business – find a list of comment opportunities here.


Member Welcome: Romag Fasteners

Romag Fasteners manufactures magnetic snaps, fasteners, and closures used on apparel, footwear, leatherware, and commercial applications. Their magnetic snaps and components are manufactured in Europe, Asia, and the U.S. Learn more.

AAFA Events
January & February

Jan. 12 A Conversation with AAFA Board Leadership
Jan. 24 What’s on Your Customers’ Shelf? The Latest on Compliance and Restricted Chemicals
Feb. 8Environmental Committee Meeting
Feb. 9Social Responsibility Meeting
Feb. 15 Webinar: Best Practices from Vans: Proactively Combatting Counterfeits
Feb. 23 Webinar: The Data You Need to Evaluate Your 2016 Holiday Sales
Feb. 28 Executive Committee & Board of Directors Meeting
Be sure to register today for AAFA's Executive Summit: March 1-3 in Washington, D.C. Rooms at The Watergate Hotel are filling up!

Register here for "A Conversation with AAFA Board Leadership" this Thursday 2:00 PM!

Pictured: Rob DeMartini, AAFA Chairman
Paula Zusi, AAFA Vice Chairman

Visit our events calendar for all AAFA webinars and industry events.
Other Industry Events
January 25-26, 2017 | Orlando, FL
Don’t miss AAFA President and CEO Rick Helfenbein’s keynote address in Orlando. The presentation will cover topics including the recent U.S. presidential election, labor concerns, the activewear market, new sourcing strategies, and wearable technology. More information is available here.


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