Basically every country in the world relies on the textile and apparel industry. Majority of fashion merchandise is made in third world countries. There are multiple reasons and advantages to produce fashion merchandise in foreign counties. One major reason is that labor costs are much less; workers are willing to work for very low wage. Some machinery is only available overseas. Handwork is affordable in undeveloped countries. The cost is more expensive in developed countries. For example, minimum wage is eight dollars in America, where a worker can be paid eleven cents per hour in an undeveloped country.
United States Rules and Regulations
The US has aided companies who still produce fashion merchandise in the US by limiting the amount of imports, and taxing them to make them less competitive.
Duty/Tariff- is a tax on imported articles collected by US Customs Service. It is the percent of the first cost value of the item.
Quota- Absolute Quota limits the quantity of certain goods that may enter the commerce of the US in a specific period, which is usually a year. When Absolute Quota is filled, further entries are prohibited during the remainder of the quota period. Tariff-rate Quota permits a specified quantity of imported merchandise to be entered at a reduced rate of customs during the quota period.
Embargo- When a country is embargoed, it means that all trade is denied. All merchandise is held until the quota period is over; there is a fee that must be paid.
Commissionaires- They are paid a commission to act as a retailer’s agent in a foreign market. They find resources, facilitate, and order placements.
Freight Forwarding- Is an agent who assists with shipping details.
Customs Broker- Negotiates permission from the US government to import.
Transshipping- It is an illegal trade practice, in which merchandise tags are switched to country of origin in order to make quota period.
Country of Origin- The country where the garment is assembled.
Normal Trade Relations- Standardized duty rates are charged to countries with NTR status.
Special Programs- There are several special trade agreements with our closest neighbors. US and Israel have a free trade agreement. There are no duty charges and the quota is open. 9802 is the agreement when the fabric must be of US origin, and part of the manufacturing must be done in the US. The remainder can be done outside of the US and the duty is paid only on the value added in the other country. N.A.F.T.A is the North American Free Trade Agreement. It ties US, Canada, and Mexico together as three special trading partners.
Panama Free Trade Agreement- The agreement is styled after NAFTA. It was negotiated under the Bush administration, but was not passed before he left office.
European Union- It is a version of NAFTA. Fifteen countries now share common policies and work in economic and political cooperation. Single shared currency (Euro) was introduced in 1999 and is used by European Central Bank.
Marking- All garments that enter the US must have the following labels attached: Fiber content, Country of origin, Legal identification and Care labeling. Pictograms are international care symbols. They have been replacing labels written in different languages.
Triangle Shipments- Term used to describe a multi country procedure. The term triangle is used to signify that there are three different locations for manufacturers headquarters, garment construction and the customer.
LAUREN LOOKS FOR A CAREER 