Made in USA Key Topic at AAFA Summit

Apparel executives continue to test the waters on investing in U.S. production, while also pressing for new market-opening trade deals.

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WASHINGTON — At a time when gridlock on Capitol Hill has stalled President Obama’s trade agenda, apparel executives continue to test the waters on investing in U.S. production and make the case for Made in America, while also pressing for new market-opening trade deals.

This story first appeared in the March 18, 2014 issue of WWD.  Subscribe Today.

Executives placed an emphasis on Made in USA, the changing global sourcing paradigm and ethical sourcing in the wake of factory tragedies in Bangladesh at the American Apparel & Footwear Association’s annual summit here.

Many said the burgeoning Made in America movement is taking hold, with concrete investment in new factories.

“Made in the USA — it’s a hot topic,” said Stephen Lamar, executive AAFA vice president. “Over the last couple of years, lots of individuals — members and nonmembers — have been in contact with us and asking us, ‘Is there anything to a Made in the USA trend?’ All of them were trying to build a business case for Made in USA. What we are hearing now is that people are reporting back that they actually are building. They are making that business case. They are finding a way for it to work, not for a lot but for a small amount. It has happened over a couple of years now, so for us that is a trend that shows signs of sustaining.”

Incoming AAFA chairman Rick Helfenbein, who is also president of Luen Thai USA, said in an interview that one of AAFA’s goals is to help boost the Made in USA movement by providing better resources and access on the group’s Web site, for example, to a list of companies that produce apparel, textiles and footwear in the U.S.

“There is a lot we can do to gain exposure for Made in USA,” Helfenbein said. “It depends on taking what already exists and making it clearly visible to everybody, meaning identifying all of the fabric mills, identifying all of the potential manufacturing sites. We know the desire is there and the demand is there. How it will rise will depend on what the market will bear.”

But there are challenges to producing products in the U.S., noted Philip Williamson, chairman, president and chief executive officer of Williamson-Dickie Manufacturing Co., which has a significant domestic manufacturing presence.

“It is still a challenge because it is hard to find the workforce,” he said. “There are not many domestic sewing operators or footwear producers, so that is a challenge, and costs are still pretty prohibitive, depending on the type of item you are making.”

Steven Kolb, ceo of the Council of Fashion Designers of America, who has worked to stimulate manufacturing in New York’s Garment District, facilitated a conversation with CFDA president Diane von Furstenberg at the summit and told the AAFA he is interested in working with its members on taking concerns about high tariffs on imported fabrics to members of Congress.

Kolb said he met with Sen. Kirsten Gillibrand (D., N.Y.) and Andrew Rosen, cofounder and ceo of Theory, before the summit and discussed the duties on imported fabrics.

“Duties paid on imported fabrics…are so high,” Kolb said. “If we can work with the AAFA and talk about how they could possibly be reduced or eliminated, I think that would have a direct connection to production locally in New York.”

Von Furstenberg said, “People are manufacturing in America and I think it is great. I think we have to address it and help it.”

Global sourcing and social responsibility were also key topics at the summit.

“One of the major initiatives we are working on in this Congress is getting renewal of [Trade Promotion Authority], so the president and Congress can jointly…work to not only pass these [free-trade] agreements that we are now negotiating, but can lay a basis for future opportunities for economic growth,” Lamar said.

However, the midterm congressional elections in November and opposition from Democrats in the House and Senate, including Senate Majority Leader Harry Reid (D., Nev.), could make passage of trade-related legislation difficult this year.

Helfenbein said AAFA is trying to align itself more closely with senators and House lawmakers in the New York and California delegations, in particular, to talk about the importance of trade. The Trans-Pacific Partnership agreement the U.S. is negotiating with 11 other countries, including Vietnam, as well as a transatlantic trade deal with the European Union, are important to the industry.

Executives also grappled with the issue of corporate social responsibility.

Lynn Barratt, vice president of merchandise global sourcing for Walt Disney Parks and Resorts, was asked if she thought the industry was making a mistake by keeping production in Bangladesh. Disney pulled production of its branded merchandise out of Bangladesh — representing a small percentage of its overall global sourcing — last year in the wake of a factory fire that killed 112 workers.

“Number one, we had very little volume in there from a parks standpoint,” Barratt said. “Number two, our philosophy is not to cut and run. It’s to help things get better. With this, because we had such a low volume and we didn’t feel like we could make a difference from our perspective…we made that decision.…It was right for us at the time and it was a big decision we made at the time based on a lot of deciding factors.”

In the aftermath of the tragedies in Bangladesh, two initiatives involving several major North American and European companies were launched aimed at improving fire and building safety conditions in Bangladesh’s apparel industry. Lamar said a trade expo held in Bangladesh last month attracted 1,500 people, who were able to see new fire doors and safety equipment needed to improve safety in their factories. He also said the industry is lobbying the Bangladeshi government to help lower high tariffs it imposes on the imports of fire safety equipment into the country.

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