Turkey Garment Manufacturers And Branding Debates On Defense Tax

In order to help local textile producers in Turkey, the local government plan to implement provisional defense tax on imported shuttle weaving, clothing and accessories, but this measure has also been challenged by local garment manufacturers and brands.

In the early May 2011, Turkey's textile industry executives discussed the dangers posed by trade protectionism in the Istanbul Fashion Apparel Conference in Turkey.

In April this year, the government of Turkey decided to import a number of textiles and

Turkey will begin to implement provisional defense tax since July of this year. The tariff rate affected items include coats, suits, jackets, shirts, underwear, pajamas, pajamas and T-shirts.

Zafer aglayan, Minister of foreign trade in Turkey, told the participants at the Turkey fashion fashion conference that the temporary defense tax is a necessary measure to curb the recent surge in imports of textiles and clothing.

"The government of Turkey must pay attention to the substantial increase in imports of foreign goods, which has resulted in the closure of several textile and garment factories, and therefore has decided to implement the provisional defense tax, but we will never let this decision cause the garment industry to suffer," said the canal.

These measures are aimed at helping Turkey textile enterprises gain more business from local garment enterprises and reduce their dependence on imports from overseas markets.

Turkey will start implementing the provisional defense tax since July 21st of this year, and the increased import tariff rate will vary according to the type of country (low developing countries, developing countries and other countries).

For example, the additional tariff of shuttle woven fabric imported from the United States is 20%, and the additional duty to imported garments and accessories is 30%.

However, this measure has also been criticized as "trade protectionism" and opposed by Turkey garment enterprises which have already faced many pressures of rising costs.

In fact, the cost of production at different stages of supply chain in Turkey is indeed likely to increase.

On the one hand, the Turkey garment manufacturers who import the materials of the tableland will face additional tariffs on the increase of the imports.

On the other hand, Turkey's rapidly expanding retail industry will also be hit.

"Trade protectionism" tax

Edward David Southall, vice president of LCWaikiki Purchasing Department of Turkey brand and retailer, believes that additional import tariffs will lead to higher supply chain costs in Turkey.

Southall said, "if the implementation of the trade protectionist defense tax is implemented, the import tariff of Turkey's imports of shuttle fabrics and clothing products will increase by more than 25-30% in one year or 18 months. As a result, all Turkey retailers' orders will return to Turkey in large quantities, instead of purchasing from the far east, which will impact Turkey."

Southall said, "we also believe that Turkey manufacturers should focus on exports of high value-added products". Another LC Waikiki found that there are certain items such as sweaters and coats under capacity in Turkey.

Southall said that if the import tariff of garment materials was raised, it would make it more difficult for retailers to spend 2 billion US dollars on clothing purchases to Turkey suppliers before 2020.

Retailers worry that Turkey retailers will have to pass on increased costs to consumers because of rising costs.

Christophe Roussel, director of Tesco global procurement, raised the same concerns about the implementation of the interim defense tax in Turkey.

"Tesco believes that free trade is always a force. When we are in a free trade environment, you must be very careful when you talk about trade protectionism," he said.

Lessons learned from Italy

Meanwhile, Paulo Zegna, President of Ermenegildo Zegna group, a senior menswear enterprise in Italy, attended the fashion fashion conference in Turkey, told the participants that Turkey could use Italy's textile industry as a mirror.

The canal said Italy textile industry has lost 43000 jobs and 7000 enterprises in the past 5 years to reduce production costs, focusing on stronger brand and export recovery.

Zegna said, "if we want to protect our manufacturing industries from external competition pressure and set up a high tariff policy on imported products, this is not a prescription for curing the damage, but only to alleviate the reaction of enterprises to external shocks, and to enable enterprises to enter a certain degree of dormancy."

"It is difficult to explain when the invasion of imported goods from mainland China began, but Italy decided not to build a high wall of trade protection because it is not a solution to the medium-term and long-term problems."

Turkey also hopes to develop its own style and promote the development of a complete and skilled textile industry.

Mehmet Kumbaraci, Secretary General of Turkish Clothing Manufacturers Association, said: "in order to improve the operation of local manufacturers in Turkey, trade protectionism is not a good solution. The innovation of manufacturing industry, including product technology innovation, and market-oriented business philosophy, is far more important than trade protectionism." (Manufacturers)

With its skilled labor, technology and design capabilities, Turkey not only builds a production base with high added value products, but also striving to become a world fashion center with its own design, brand and products.

But it is noteworthy that this development may be hampered. If Turkey implements extensive tax on imported shuttle fabrics and clothing products, the development of all stages of the supply chain will be restricted.