AAFA Stays the Course
In the midst of a new administration that is creating more questions than answers around global trade and taxes, the American Apparel & Footwear Association (AAFA) has its work cut out. But whatever battles lie ahead, its leadership made it clear at its annual Executive Summit in Washington, D.C., in early March that it won't be backing down on its goals or positions.
Trade, brand protection and supply chain remain AAFA's core focus, and president and CEO Rick Helfenbein likened those issues to cargo on a truck that the association is pulling. "If anything gets in our way, we will have no mercy. It is our intention to be the voice of this industry and a powerful spokesman," he said.
Specifically on the issue of taxes, AAFA has actively been speaking out against the Border Adjustment Tax (BAT), which the association says could result in triple taxation of most clothing and shoe imports. "This is a serious threat, and since we are a net importer we believe it will work against us," said Helfenbein. "It could cause you to go bust or raise your prices 20 percent."
(The National Retail Federation (NRF) also is voicing its opposition to the tax with a multimedia campaign directed at American consumers. "While NRF strongly supports tax reform, the BAT is bad tax policy that would increase costs on everyday necessities like food, gas, clothing and prescription medicines for the average family by as much as $1,700 in the first year alone," the retail association said.)
See related story on BAT.
In a session at the summit, Tom Glaser, vice president of VF Corporation and president of supply chain, said his company is in "listening mode" given that the new tax blueprint is not yet written. "We need to understand the details and other components." At the same time, he said, AAFA needs to educate Washington on the potential impact and how it might annihilate some P&Ls.
With the Trans-Pacific Partnership (TPP), which AAFA had supported, dead in the water, and the Trump administration also questioning the future of the North American Free Trade Agreement (NAFTA), AAFA clearly wants to strengthen its voice on trade.
Steve Lamar, executive vice president of AAFA, said, "It's about the conversation — how do we talk about trade and how do we do trade. We need to do a better job of explaining how trade creates jobs and opportunities."
Glaser noted that producing in Mexico under NAFTA has been successful for VF. "It generally works for our industry. We need a conversation about the positives and negatives — it's a 23-year-old agreement — but we do need to communicate that the core principles work."
Glaser added that he had concerns that a repeal of NAFTA could have a negative impact on U.S. jobs, particularly in spinning and weaving. "We could become a powerful textile country again … there is an opportunity to become more competitive."
Lamar concurred that there should be a basic assumption that NAFTA is a good agreement that can be made better. He added that NAFTA supports a "couple of hundred thousand jobs."
Speaking alongside Lamar and Glaser, Juan Zighelboim, co-founder and president of TexOps, an El Salvador-based active and sports apparel manufacturing company, said his company is focusing on technology, equipment and human resources amid the current chaos. "We have to look at things in a different light and look for new opportunities. We had assumed TPP would pass; we will assume BAT will pass. We will move forward and build our plan around what we think we will happen. And we will roll up our sleeves and keep going and we will remain very training-oriented."
On brand protection & supply chain
Relative to brand protection, Helfenbein recounted how AAFA has gone "toe to toe" with Alibaba over counterfeit goods. In December, the Office of the United States Trade Representative (USTR) re-listed Alibaba's Taobao platform as a notorious market. At the time, Helfenbein said the action put a "renewed spotlight on the considerable concerns we and others continue to see on Alibaba platforms." He added: "In the coming year, we will work with our members, USTR and other government agencies, outside stakeholders, and Alibaba itself to seek sustained improvements that lead to the permanent removal of counterfeits from these online platforms."
At the summit, Helfenbein said taking on Alibaba has been similar to David taking on Goliath, but he noted the two organizations are now discussing the issue one-on-one.
On the supply chain front, Helfenbein said AAFA remains passionate about the subject and he announced a new "Supply Chain Week" that will take place at the Fashion Institute of Technology in New York June 5-8, focused on product safety and sourcing.
New at the helm
Taking over as chairman of the AAFA for 2017-2018 is Paula Zusi, global operations advisor, retail supply chain for Advent International Corporation. See related story on new officers and board members.
AAFA's 2018 Executive Summit will be held Feb. 28 to March 2. To learn more about the association's activities visit aafaglobal.org.
Susan S. Nichols is brand director of Apparel and may be reached at [email protected]