Interview with Nicole Bivens Collinson

Face2Face
Nicole Bivens Collinson
Nicole Bivens Collinson
President
Sandler, Travis & Rosenberg (ST&R)
Sandler, Travis & Rosenberg (ST&R)

CPTPP to set stage for future FTAs

Sandler, Travis & Rosenberg (ST&R) is a premier international trade, customs and export law firm. Representing importers, exporters, manufacturers, governments, brokers and freight forwarders, it has nine offices across the United States and Asia. Its core competencies include matters concerning the movement of goods, services and intellectual property from one country to another, regardless of point of export or import. Company president Nicole Bivens Collinson explains the impact of the suspension of Rwanda's African Growth and Opportunity Act (AGOA) duty-free apparel status on the clothing manufacturing sector.

Tell us about the present global export-import environment.

The current global export and import environment is inextricably linked. The global value chains mean that any action taken in one market to protect the industry will have a global ripple effect on trade and manufacturing.  US efforts to protect the domestic industry, whether for national security or for serious balance of payment deficits or if a country carries out practices that are unjustifiable, unreasonable, or discriminatory, are resulting in trading partners taking retaliatory or compensatory action.  Additionally, the longer the United States continues to impose tariffs on goods like aluminium and steel. those products will need alternative outlets, and therefore, will be diverted to other economies. These other economies may then be forced to take action similar to that of the United States to protect their domestic industry. Uncoordinated unilateral action creates problems not only for the countries supplying goods to the actor, but to all countries that may also import the affected products.

What are the benefits of the European Union (EU)-Japan Economic Partnership Agreement on textiles?

The EU-Japan economic partnership benefit on textiles is limited in the amount of bilateral trade currently in place on these items.  However, it may help with respect to the high end fabrics and apparels. Commodity products are not produced significantly in either economy and therefore, the duty free benefits forthcoming will not reap significant benefits for producers in these products.

The United States is reviewing the generalized scheme of preferences (GSP) eligibility of India, Indonesia and Kazakhstan. How badly will that hit the exports of products, especially textiles, from India and other countries?

Textiles and apparel are excluded from the US GSP programme and therefore, losing eligibility will not affect this industry.

What are the existing GSP benefits to India?

India has many products to benefits from GSP although there are some products that have become so successful in penetrating the US market under the GSP that they have been 'graduated' from GSP benefits. This means that other countries remain eligible to export that item and export it duty free to the United States under GSP while India may have to pay the normal trade relations (NTR) duty.

How is the US-China trade war affecting global trade?

The biggest impact is that it could potentially affect many other markets and is no longer a Sino-US issue. If we think of trade as a balloon, when you squeeze one part of the balloon, the air has to go somewhere. The US has squeezed China on solar panels, washing machines, steel, aluminium and 1,300 other products. Those goods must either pay the high additional tariffs to get into the US market or they need to find a new buyer.  When they seek a new buyer, say Canada, then the Canadians have to determine if now washers, solar panels, steel and aluminum are being imported at a level that disrupts their market, they will potentially have to act against that phenomenon.

What is the impact of the US-China trade war on Indian exports to Asian markets?

There are two potential impacts: 
1. India can now take up the lack of capacity in the US and Chinese markets. As Chinese goods become cost prohibitive in the US market and vice versa, alternative sources must be found.  If India produces the same goods that China has imposed tariffs on, then the former can start supplying the latter those goods at a likely less expensive price. 
2. Several other countries, including Japan and Korea, have already notified the World Trade Organisation (WTO) of their intent to impose tariffs on US origin goods. If Indian manufacturers make these or similar goods, they can now supply to those markets.

How can foreign direct investment (FDI) help India improve competitiveness of its manufacturing sector?

FDI, if targeted appropriately, can help a country improve its manufacturing sector, but it must be directed FDI and it cannot be limited just to manufacturing. A key element in all global production is the ability to move goods/inputs effectively, efficiently and quickly. Appropriate infrastructure, seamless transportation of goods and minimal documentation and bureaucracy have a greater effect on attracting FDI than just an open market. Open market, open telecommunications, open banking, open and efficient laws, rules and regulations creating a smooth logistics path that is transparent and known to companies are key to attracting FDI.

How effective will be the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in the absence of the United States and China?

The CPTPP sets the stage for future FTAs. It is essential to socialise the commitments of such a robust agreement among many countries so that it becomes the norm. The agreement will set the stage and rules to be followed going forward and is important to the global trade agenda.

The United States recently suspended Rwanda's AGOA duty-free status on apparels. How will that affect its domestic clothing manufacturing industry?

The impact on the Rwandan apparel industry is likely to be significant. They will need to build capacity to reach the levels of apparel currently being provided using used clothing and that could cause some frustrations for Rwandans accustomed to getting very cheap clothing very quickly and easily. However, if the domestic industry can ramp up production quickly, it can handle the demand. If not, the action of suspension, which will likely lead to the withdrawal of some US brands from sourcing in Rwanda, may cause a domestic demand-supply gap.

Who are your major clients in the textile industry?

Some of the largest in the world and some of the smaller companies as well. We do not disclose our client base.

What is your research and development (R&D) team like? How much do you spend on R&D on a yearly basis? Where do they source information on trends and consumer insights from?

We do not have a dedicated R&D team. We have individuals responsible for reporting and monitoring the industry.  Their sources include open source information on supply, inventory and production.  We also have access to US data which helps our analysis of the state of the industry. (RR)
Published on: 05/07/2018

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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