Turkiye gained an advantage in exports

Turkiye exited the US Generalized System of Preferences (GSP) in 2019, owing to its accelerated economic growth and development. Consequently, it cannot obtain duty-free access to the US under the current conditions. This collaboration represents a strategic effort by Turkiye to broaden its textile presence in the US, which is one of the largest importers of textile and apparel products after the EU. The country has already extended its textile market to the EU, capitalising on the pandemic when supply chain disruptions boosted the exports of Turkiye's textile industry, which was previously facing challenges.

Figure 1: Turkiye’s apparel exports to EU (in $ bn)

Source: ITC Trade map

However, when compared to exports to the EU, the apparel exports to the US are significantly limited. The total exports of apparel to the US fall below a billion dollars, even though the country enjoys duty-free access to the US market. Adhering to sustainability norms will greatly facilitate the country's market entry from various angles. The figure below illustrates Turkiye's apparel exports to the US.

Although exports are increasing, the rate is slower than expected. Overall, Turkiye's exports were low due to the economic crisis and the currency downfall, resulting in the central bank implementing disruptive measures for the Turkish economy, which led to uncertainty and a decline in exports.

Figure 2: Turkiye’s apparel exports to US (in $ bn)

Source: ITC Trade map

The US is facing several issues in the textile industry, one of which is adhering to sustainability norms while not imposing the same standards on imports from other nations. Nevertheless, this collaboration ensures that Turkiye can enter the US market without facing scrutiny from the US industry or authorities. Turkiye aims to capture 5 per cent of the US apparel market, and the current collaboration is a positive step in that direction.

While many countries are adopting measures like onshoring and nearshoring, Turkiye has already made significant gains and continues to do so in textile exports to the EU. However, the growth of US apparel exports remains subdued; therefore, through this collaboration, Turkiye is contemplating a potential increase in its apparel exports.

A move towards sustainable production

With the current collaboration in focus, the country aims to meet all the necessary conditions to ensure that its products become more US-friendly. This initiative is linked to the recent demands from the US textile industries for stricter enforcement of sustainability norms—not only for domestic industries but also for countries wishing to export their textile products to the US. Turkiye meets this condition as the nation receives assistance from US WRAP to make its apparel production factories more sustainable. The organisation also provides support to the workers.

WRAP certification is awarded to apparel production firms after a comprehensive social audit that complies with local regulations and international standards. Globally, 3,500 WRAP-certified facilities employ around 3.5 million people, and receiving direct assistance and certification from WRAP is a significant achievement for the Turkish textile industry, which seeks to expand its apparel exports in the US and capture a larger market share.

The collaboration with the organisation also offers Turkiye an equal playing field against other countries that export apparel to the US and possess a WRAP certification. Moreover, direct assistance from WRAP enhances the benefits for the nation.

Road ahead

The current collaboration promises one significant benefit for Turkiye: a boost in apparel exports and easier acceptability in the US market. There are apparel-exporting countries with certification from the organisation that already face complaints of partial treatment regarding the import of apparel from these countries. Therefore, the current collaboration promises a smooth entry and easy acceptance of Turkish apparel into the US market. In the long term, Turkiye may approach its target of $25 billion in apparel exports, and the US may potentially play a substantial role in achieving this target.

Fibre2Fashion News Desk (KL)