Translated by
Nicola Mira
Feb 8, 2017
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Free trade: China and India prepare for the Trump era

Translated by
Nicola Mira
Feb 8, 2017

The Trans-Pacific Partnership (TPP) free-trade agreement has all but collapsed after Donald Trump's election. The TPP deal was signed in February 2016 but was not yet operational at the time of Trump’s accession. Its purpose was to eliminate trade barriers between 12 Pacific Rim countries: Vietnam, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Singapore, New Zealand, Peru and the USA. After Trump announced the USA's withdrawal from TPP at the end of January, two world leaders in textile and apparel sourcing, China and India, neither a TPP signatory, are now seeking to seal other regional trade agreements, as some of their representatives at the Texworld/Apparel Sourcing trade shows in Paris have told FashionNetwork. 


After the USA withdrew from the TPP free-trade agreement, China and India are now keen to strike their own deals - DR

"While the TPP was being finalised, the Chinese government continued to push for an alternative agreement, said Zhang Tao, General Secretary of the Chinese Textiles Chamber of Commerce (CCPIT-Tex). Whatever the deal, the purpose of these partnerships is to promote regional and international cooperation for the free circulation of capital and manpower. Indeed, if the countries participating in any such agreement will pledge to introduce improved services, transport and regulations, our industry will surely back them."
"It is obvious that, in terms of trans-Pacific cooperation, in the future we wish to be able to make a deal with China and with the countries of South-East Asia, said Madhukumar Reddy, Joint Secretary of India's Ministry of Textiles. It is a major work-in-progress area, on which we are already busy with our partners, and also a key tool to strengthen the complementarity of our respective industries." "An increasing number of Chinese businesses have invested in foreign countries such as India, Sri Lanka, Bangladesh, Pakistan, Kenya or Ethiopia, building textile factories there. These investments will enable the Chinese textile supply chain to improve in terms of speed and reactivity," added Zhang Tao. According to him, last year was a challenging one for his country's textile industry, hampered by rising manpower costs, stricter environmental regulations, exchange rate pressure and the slow-down of domestic demand. Yet, despite the slump in exports, China still held on to its global market share.

"The notions of free trade and globalisation are faced with very serious challenges," said however Zhang Tao, specifically referring to the US government's new protectionist lean. But I am sure that, through the joint efforts of the textile industries in all the countries in our region, and a strengthening of our complementarity, textiles can still look forward to a very bright future."

The Joint Secretary of India's Ministry of Textiles instead insisted on the need to build bridges with the West: "We wish to be able to attract professionals from countries with great expertise in textiles, such as France, Italy, Germany and others, and encourage them to exploit the eco-system we have in place in India," said Madhukumar Reddy. According to him, one of the milestones of this strategy will be the first edition of a major industry trade show scheduled for the end of June 2017. The event’s launch coincides with the mounting uncertainty about future trade relations between the USA and its supplier countries.
An uncertainty which has caused sourcing countries to turn towards Europe, despite the slump in the latter's levels of domestic demand. According to the Institut Français de la Mode, the French Fashion Institute, in the first 11 months of 2016, China and India were respectively the first and fourth apparel supplier to the EU, with €25.5 billion (-8%) and €4.7 billion (stable) worth of goods respectively exported to Europe. The two countries were also the first and third textile supplier to the EU, with respectively €9 billion (+1%) and €2.5 billion (+2%) worth of goods exported.

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