AAFA Weekly Brief
February 7, 2017
Supply Chain
February 6: Federal Maritime Commissioner Rebecca Dye said the reduction from four to three major container shipping alliances should decrease rates on the transpacific trade, but the decline could be offset by upward rate pressure due to expected mergers. (Source: American Shipper)
February issue: Trade policy threats and campaign rhetoric have fueled a renewed interest in U.S. manufacturing. ... As we move forward on Made in USA in the coming years, let's make sure we understand just what makes our nearly 4 million U.S.-based apparel and footwear workers competitive. (Source: Fashion Mannuscript, op-ed from AAFA's Steve Lamar)
February 6: ... More than a few companies went big in Vietnam or invested more in their existing resources there, banking on TPP and the growth that would have come with it, so the question now that President Trump has pulled the U.S. from the agreement is: what’s going to happen with sourcing in Vietnam now that there’s no deal? Well, it seems, little may change at all. "Clearly Vietnam had much to gain from TPP," a U.S. government official in trade said speaking on condition of anonymity. "But notwithstanding that, Vietnam has seen incredible growth in the last few years and I would expect that to continue, TPP or not." (Source: Sourcing Journal - login required)
Milgram Freight Services
February 7: With the turmoil in Washington of late, it's hard to decide exactly which issue you are most upset about. Just as you get really angry about one problem, another one tweets its way into your head. For the retail, apparel, footwear, handbag and accessories trade, there is nothing more fearful right now than the border adjustment tax (BAT) provision — a difficult component of a generally excellent idea that has been put forward by House Republicans as part of their "A Better Way" blueprint for lowering America's corporate taxes. In a fashion industry that survives by importing 98 percent of its products, this proposed new BAT tax plan is potentially a death sentence. (Source: The Hill, op-ed by AAFA's Rick Helfenbein)


February 1: Co-dependency isn't so healthy in a human relationship, but in international trade, it's worked well for the U.S. and Mexico for textiles and some apparel. The North American Free Trade Agreement paved the way for the partnership as the industry took advantage of each nation's strengths. According to the American Apparel & Footwear Association, the U.S. has great textile mills for making fabrics, yarns and other inputs, while Mexico is better at cutting and sewing. This means American textiles are sent to Mexico to be finished and then sent back to the U.S., duty-free, to be sold to consumers. But now industry experts fear that relationship is being threatened by some of President Donald Trump's proposals. ... Nate Herman, senior vice president of supply chain at the apparel association, warned that changing NAFTA would cost tens of thousands of American textile manufacturing jobs ... (Source: CNBC)
February 1: Apparel and footwear company executives throughout the country increasingly are focusing on the Border Adjustment Tax (BAT) provisions in a package of tax reform proposals that are pending before the U.S. House of Representatives. If enacted, the BAT will fundamentally change the way in which apparel and footwear executives structure their businesses. Among other things, it will result in triple taxation of most clothing and shoe imports. That's right. Triple taxation. (Source: Apparel, op-ed from AAFA's Steve Lamar)
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Brand Protection
February 6: Counterfeiters are increasingly specialising and targeting where they hawk their wares, with social media found to be particularly popular for fake sports paraphernalia, an anti-counterfeiting firm has revealed. ... According to the data the firm pulled, Alibaba's sites Taobao and Aliexpress were the top sites promoting counterfeit sports items accounting for 13.4 percent and 12.8 percent infringements respectively, followed by Facebook with 11 percent of infringements. Amazon made fifth place with 9.4 percent of infringements, while Twitter featured 3.5 percent of infringements and Instagram 2.3 percent.
(Source: Securing Industry
February 2: More than half of counterfeit goods arrive in U.S. via mail after being ordered online. Officials want Amazon and EBay to share more data on fakes. ... It's a problem that's getting worse and harder to control. Last year, the U.S. government seized $1.38 billion in counterfeit goods. More than half of that arrived via express courier and international mail. Why? Because fakes increasingly are being bought online—largely at Amazon.com Inc. and EBay Inc.—and often shipped direct to Americans' homes in individual packages. As a result, officials must find counterfeits one-at-a-time in a stream of 250 million individual packages entering the country each year. (Source: Bloomberg)
Naylor Association Solutions

In Brief
Border adjustment tax update: On February 1, AAFA joined with more than 120 trade associations and companies for the launch of the Americans for Affordable Products coalition. We are receiving an unprecedented number of inquiries and comments from members, and have been sharing these thoughts with the Trump administration, members of the House's Ways and Means Committee, members of the Senate Finance Committee, and directly with the authors of the bill. For more on the coalition, see these stories in the Associated Press and Bloomberg.

To get involved, you can join hundreds of your colleagues in telling Congress how this provision could impact your business here. We are also hosting a meeting at MAGIC on February 22 from 8:00 to 9:00 AM PT. Please RSVP to Maureen Storch to attend.

AAFA joins Social & Labor Convergence Project: AAFA has joined The Social & Labor Convergence Project, on behalf of the industry. The mission of the project is to develop a simple, unified assessment tool and verification methodology, to ensure commonality in information collected by audits. AAFA hopes the development and implementation of a single audit protocol will promote collaboration in the industry. For questions about this initiative, AAFA’s Social Responsibility Committee, or AAFA’s Environmental Committee, please contact Kristen Kern.

Three weeks until the AAFA Executive Summit: With the AAFA Executive Summit ahead on March 1-3 in D.C., be sure to check out the full agenda and speaker lineup! Get to know our "Nex Gen Influencers" panel with this conversation. Questions? Contact Susan Lapetina, AAFA's Senior Vice President of Education and Corporate Marketing.

AAFA internships & Two Ten scholarships: Know a great intern candidate? AAFA is accepting applications for interns in both our Government Relations and Communications & Marketing departments for summer 2017. More information is available here. We are also pleased to share that the Two Ten Footwear Foundation provides scholarship opportunities for footwear employees and their families, based on financial need, academic ability, and personal promise. Recipients can receive up to $3,000 a year for four years of higher education. Applications for the 2017-2018 academic year are due by April 1, 2017. Learn more here.

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.


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AAFA Events
February & March
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
Mar. 1-3 AAFA Executive Summit
Mar. 15
Webinar: "Safe" – A New Marketing Message to Add to Your Leather Products
Mar. 22-23 Government Relations Committee Meeting and Day on the Hill

Be sure to register today for AAFA's Executive Summit: March 1-3 in Washington, D.C. Full agenda.
Worried about the proposed Border Adjustment Tax?
RSVP to Maureen Storch to attend AAFA’s open-industry meeting, Feb. 22 at MAGIC

Visit our events calendar for all AAFA webinars and industry events.
Other Industry Events
May 4-5, 2017 | New York City
Nate Herman, AAFA’s Senior Vice President, Supply Chain will present an update on the state-of-play in Washington, D.C., and how it could impact your business. President Trump’s inauguration is now complete and we are all waiting to see what impact the new administration's policies and Congressional legislation will have on trade, regulations, and executive orders. After four months in office come May, Nate will lead a lively debate and provide his insights on the impact to our supply chains and compliance efforts.


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