Impending Cotton Ban Threatens Supply Chain Industry

Impending Cotton Ban Threatens Supply Chain Industry

November 12, 2020

2020 has taught the world many lessons, and fashion has been among the most impacted industries as it faces its fair share of complications for the supply chain. With the holiday season around the corner, orders are forecasted to exceed shipping capacity by 5% and Black Friday promises to look anything but typical. However, according to our president Mark Burstein, the most pressing issue facing the supply chain industry today is the probable ban of cotton products from the Xinjiang region of China.

What’s Happening in the Xinjiang Region?

Four companies and a manufacturing facility in the Xinjiang Uyghur Autonomous Region (XUAR) of China have been accused of numerous accounts of forced labor. According to a report in Business Insider, “Beijing has committed human rights atrocities against minority Muslim populations, including forcibly sterilizing women.” PBS reported that “Uighurs and other minorities have been detained and compelled to produce goods for export to the U.S. and elsewhere.”

How Is the US responding?

After hearing from numerous human rights organizations in September, the Trump Administration is considering introducing a ban on all cotton imports from the region. It is unclear if this will cover just cotton items exported from Xinjiang or be extended to products that contain Xinjiang cotton but come to the US from a different country. Either way, a ban would have devastating impacts on Beijing’s economy, prompting them to stop the atrocities.

Right now, according to a July report from Business Insider, “virtually the entire apparel industry” is profiting from the forced labor crisis in Xinjiang. In fact, the same report found that 80% of the cotton products supplied to the US come from Xinjiang, making China the world’s biggest cotton supplier. While retailers can work to pivot away from these cotton providers over time, the implications of such a ban are likely to be far-reaching for years to come.

What Comes Next?

Burstein expects Customs and Border Protection to soon require retailers to trace the manufacturing of goods from the chain of custody at the cotton source all the way through to the vendor of the finished goods. This can confirm the validity of ethical sourcing efforts by verifying that forced labor or other corrupt practices were not used at any point in the supply chain. If the bill is passed and retailers are required to trace their products, blockchain technology, and artificial intelligence will be critical components in proving importer’s compliance with the new regulation.

What Solutions Exist To Help?

In response to this timely crisis, NGC developed a new Traceability platform that allows fashion retailers to track their product's chain-of-custody by storing the history of every transaction between all suppliers at every. Associating environmental measurements for every facility in a product's journey, the digital thread of each product can also provide sustainability metrics.

Our solution makes it easier for importers to collect and share a compliance certificate and supporting documents with U.S. Customs and Border Protection for all inbound shipments to U.S. ports.

NGC’s Traceability Solution is Here for You

Prioritizing ethical choices within the supply chain is important to us at NGC, and we know it’s important to you, too. That’s why we developed the NGC Traceability platform with ease-of-use, access to real-time data, and a certificate of compliance in mind. Contact us today to learn more.