Direction of US policies will be contingent on priorities set by the new leadership
The American Apparel & Footwear Association (AAFA) is a leading force in representing and advocating for the apparel and footwear industry, standing as a symbol of the unification of two historically significant associations. Established in August 2000 through the merger of the American Apparel Manufacturers Association (AAMA) and Footwear Industries of America (FIA), the AAFA combines decades of experience and expertise.
Each of these organisations brought with them a legacy of serving US manufacturers, distributors, and suppliers. The AAMA, founded in 1960 from the merger of several organisations that date back to the 1800s, played a pivotal role in ensuring the competitiveness of US apparel manufacturers in an increasingly globalised market. Meanwhile, the FIA, with roots dating back to 1869, stood as the sole national association for the US footwear industry, offering invaluable support to manufacturers, importers, distributors, and suppliers in the leather and allied trades.
Today, AAFA represents over 1,000 world-renowned brands, serving as the primary public policy and advocacy voice for an industry that employs more than 3.2 million workers in the United States and contributes over $490 billion annually to the nation’s retail sales. AAFA’s influence extends from its headquarters in Washington, D.C., across the US and around the world, ensuring that its members have a seat at the table when it comes to navigating the often complex regulatory landscape. Through its work, the association helps to lower operational costs for its members, streamline supply chains, and protect brands from challenges in sourcing, trade, logistics, and manufacturing.
Under the leadership of President and CEO Stephen E. Lamar — Lamar is a seasoned leader with a background in international public policy and trade with a deep understanding of the global dynamics that shape the apparel and footwear industry — AAFA continues to influence key legislative and regulatory policies, ensuring the long-term success of its members in a rapidly evolving marketplace.
On the sidelines of the ITMF and IAF joint conference in Samarkand, Uzbekistan, Fibre2Fashion spoke to Stephen Lamar, President and CEO of AAFA, to know his thoughts on a wide range of issues facing the industry today.
Here are the excerpts.
How do you foresee the impact of US policies on the textile and apparel (T&A) sector, especially with respect to South Asia?
There are several key factors to consider regarding the current state of US trade policy and its impact, particularly on the textile and apparel industry in South Asia. Right now, the US is not creating new trade policies or signing new trade agreements even as many of the existing preference programmes and trade agreements have either expired or are about to expire.
While some of the programmes may not directly affect South Asia, others do. For example, India is no longer part of the GSP, nor is Bangladesh. Moreover, neither apparel nor footwear are included in the list of the covered goods. This means that even for countries that were part of the GSP, the key products of interest, like textiles and apparel, are not covered. Further, the GSP programme remains expired since December 1, 2020.
So, how does current US trade policy influence the South Asian textile industry? At this moment, it does not affect much. There is an absence of any substantial trade policy at present even though we can remain hopeful that this situation might change going forward.
However, when we turn to environmental and sustainability regulations, most of the rules are being developed in Europe. In the US, there are some state-level initiatives, but these efforts are fragmented and inconsistent across the country. What is needed is a harmonised approach, both within the US and between the US and Europe, particularly on crucial issues like decarbonisation.
Having differing rules creates unnecessary complexity for suppliers, and when it comes to the issue of sustainability, there should be global consensus and alignment to ensure progress.
In the given scenario, what strategies do you suggest garment exporters should adopt to navigate the difficulties and thrive in such an environment?
My recommendation would be to maintain a strong and close relationship with the customers. In today’s rapidly changing market, becoming valuable partners with customers is crucial.
By fostering a close connection, you position yourself to benefit from the knowledge and insights that your customers can provide. This creates a shared understanding between both parties, clarifying responsibilities and avoiding potential misunderstandings.
This collaborative approach, in many ways, is the most effective way forward as such kind of strategic partnership can strengthen your business relationship and ensure long-term success in a competitive and dynamic market.
As the US heads into elections and a potential leadership change is on the horizon, what kind of impact do you expect this will have on the industry?
A change in leadership is inevitable, as the current administration under President Joe Biden will be followed by a new president after the elections. The next US president could be either Donald Trump or Kamala Harris, both representing different directions for the country.
Even if Kamala Harris, who is part of the current administration, were to become the president, it would still signify a different government with new policies. This shift will undoubtedly bring changes to various sectors, including the industry in question.
However, it is difficult to predict what specific policies either candidate will implement or how they will impact the industry at large. Each administration typically has its own agenda, which influences trade, regulation, and economic factors that affect industries on a global scale. The direction of US policy will be contingent on the priorities set by the new leadership, and only once those are announced will the industry be able to gauge their complete ramifications.
Right now, any forecast is speculative, as much will depend on the specific policies that the incoming president and their administration choose to focus on.
As a trade body with such in-depth understanding and association with the apparel sector, how does AAFA work to influence government policies to reflect the industry’s priorities and address its concerns?
We invest a significant amount of our time and resources in advocating for the necessary actions that align with the industry needs. Our role involves providing comprehensive insights into the implications of various policies and how they could affect the industry both in the short and long term.
We strive to offer well-informed recommendations to the policy makers based on our close relationship with the industry and our deep understanding of its dynamics.
Despite our efforts to guide and influence policy decisions, the ultimate authority to accept or reject our advice lies with the policymakers. We hope that our recommendations are adopted, given our extensive knowledge and the close connection we maintain with industry realities. However, it is important to recognise that policymakers have the discretion to make decisions that may not always align with our suggestions.
If they choose a different course of action, it is their prerogative even though our goal always remains to offer the best possible advice and support, but the final decision rests with those in the power.
Given the ongoing geopolitical developments around the world (in Gaza, Lebanon, and the war in Ukraine), how do you think these events will impact the industry?
The current geopolitical landscape is marked by significant uncertainty and risk. Such conflicts have wide-ranging ramifications across various critical aspects, including logistics and energy supplies, which create ripple effects across industries. For instance, disruptions in supply chains and fluctuations in energy prices can significantly impact operations and costs.
The unpredictability they bring makes it challenging for businesses to plan and forecast accurately. The inherent risks lead to a more conservative approach in business and decision-making.
Such a scenario also places a considerable burden on economic growth. As long as these geopolitical and other global challenges persist, they will continue to weigh on the economy. The inability to predict future developments with any degree of certainty forces businesses to hold back on investments and expansion plans. Consequently, broader economic growth is impeded, as businesses remain hesitant to commit resources or make long-term plans.
Lastly, how do you evaluate Uzbekistan’s prospects as a textile hub?
Uzbekistan stands at a significant crossroads, presenting a unique opportunity to make a favourable impression on the global stage. With the cotton boycott campaign now behind it, Uzbekistan can leverage this moment to demonstrate its commitment to ethical practices and sustainable production. By focusing on transparency and aligning with international best practices, the country can position itself as a forward-thinking and reliable player in the textile industry. However, this can only be achieved if its commitment is matched by concrete actions.
This new phase allows Uzbekistan to rebuild its reputation and capitalise on its strengths to attract global partners and investors, setting a positive trajectory for its future.
