The recent sanction of United Nations on North Korea’s important textiles industry are taken as a forecast for disrupting business specifically the one based on China and also pose compliance issues for clothing retailers in the United State around the globe. The UN security Council imposed a ban on North Korea textile exports and a ceiling on the country’s imports of crude oil on 11th of September 2017 , ratcheting up sanctions designed to pressure North Korea into talks about its nuclear weapons and missile programs.
Retailers in the United States and other countries have intentionally limited their exposure to North Korea in recent years, as tensions over the country’s nuclear program have increased. The industry has sought to strengthen control over its supply chain since a textile factory collapse in Bangladesh killed more than 1,100 people in 2013. Though larger retailers like Wal-Mart have the ability to keep the goods out of their stores that are originated from North Korea but doing so is great issue for the smaller retailers said Marc Wulfraat, president of supply chain consulting firm MWPVL International. He further said that; “There are still hundreds and thousands of companies that are sourcing from overseas that don’t have the wherewithal or the resources or people or money to chase after these issues.”
Textiles were North Korea’s second-biggest export after coal and other minerals in 2016, totaling US$752 million, according to data from the Korea Trade-Investment Promotion Agency. Nearly 80 per cent went to China. In such a case, enforcement of the textile ban along North Korea’s 1,400-km border with China – where goods are sometimes smuggled across, often on boats at night – could be challenging, North Korea experts say.
“In the past, we have seen shows of quite convincing enforcement in the major centres, such as at Dandong,” said Chris Green, a North Korea expert at Leiden University in the Netherlands, referring to the largest trading hub on the China-North Korea border. Goods still slip through in less visible areas, he said. “Enforcement will depend a lot on China,” said Paul Tjia, an outsourcing specialist who regularly visits North Korea. “So far, a lot of the North Korean textiles trade to Europe and other places go via China.” It will be up to Chinese companies that deal in the North Korean textile trade to take action and up to the Chinese government to ensure the Chinese companies are taking action.”
There are some moral questions that are expected to rise with the ban.one of the major challenge in this manner is that the clothes can be partly made in China and partly in North Korea with a “Made in China” label attached to the finished product. “Even if a label says ‘Made in China’, some parts of the product are allowed to be made in North Korea and other places,” Tjia said. “For example, the buttons may come from Italy, the cotton may come from Australia or India, the labor may come from North Korea or China, and the accessories may come from Bangladesh.”
Source: Reuters/jp
