In the recent and impending free trade agreements (FTAs) making waves in global trade, the yarn forward rule has become increasingly important. The yarn forward rule, which is a rule of origin (ROO) for the textile and apparel industries, is a hot button issue with many benefits and drawbacks. Here’s what you need to know:
 What is the yarn forward rule? 
Certain free trade agreements require that garments be created entirely in one of the FTA-member nations. “Yarn forward” means that every step in the supply chain, from the yarn to the textile to the finished apparel product must be produced in a nation that is part of the agreement in order to be imported duty-free.
What does it mean?
For example, in the recent FTA between the United States and Korea, the yarn forward rule was adopted and only goods that are composed entirely of product made in either Korea or the US are eligible for lowered import tariffs. Products that include
What are the benefits?
Yarn forward strengthens industries in each FTA member-nation. It also has been shown to stimulate employment.
What are the drawbacks?
Yarn forward is difficult to enact, especially when member-nations of one agreement are also members of other FTAs. For example, a garment made in Korea from American textiles could only be exported to the US without heavy tariffs.
Yarn Forward and the TPP
The Trans-Pacific Partnership is a comprehensive initiative to stimulate trade between the Americas and the Pacific Rim. The US has been a strong supporter of a yarn forward rule in the TPP talks. There has been opposition to the rule and a push for a more flexible rule of origin, which would aid in price-competitiveness and allow for a more realistic and diversified supply-chain.

In the recent and impending free trade agreements (FTAs) making waves in global trade, the yarn forward rule has become increasingly important. The yarn forward rule, which is a rule of origin (ROO) for the textile and apparel industries, is a hot button issue with many benefits and drawbacks. Here’s what you need to know:

 What is the yarn forward rule? 

Certain free trade agreements require that garments be created entirely in one of the FTA-member nations. “Yarn forward” means that every step in the supply chain, from the yarn to the textile to the finished apparel product must be produced in a nation that is part of the agreement in order to be imported duty-free.

What does it mean?

For example, in the recent FTA between the United States and Korea, the yarn forward rule was adopted and only goods that are composed entirely of product made in either Korea or the US are eligible for lowered import tariffs. Products that include

What are the benefits?

Yarn forward strengthens industries in each FTA member-nation. It also has been shown to stimulate employment.

What are the drawbacks?

Yarn forward is difficult to enact, especially when member-nations of one agreement are also members of other FTAs. For example, a garment made in Korea from American textiles could only be exported to the US without heavy tariffs.

Yarn Forward and the TPP

The Trans-Pacific Partnership is a comprehensive initiative to stimulate trade between the Americas and the Pacific Rim. The US has been a strong supporter of a yarn forward rule in the TPP talks. There has been opposition to the rule and a push for a more flexible rule of origin, which would aid in price-competitiveness and allow for a more realistic and diversified supply-chain.

Last week, the President of the Philippines along with several other officials visited the United States in an effort on both sides to expand the alliance between the countries. Both countries have a vested interest in growing their relationship in regard to defense and also trade. Recently, the Philippines credit rating was upgraded by Moody’s, improving its international image and making the country more attractive for foreign investment.
The US and the Philippines have a strategic partnership that benefits both in different ways, here’s why:
The once robust manufacturing industry in the Philippines is losing out in exports to the US in key industries to more cost-competitive developing countries like Cambodia and Vietnam
The US wants to increase its partnerships and presence in East Asia to counter-balance the growing power of China
Both countries have much to gain from a stronger alliance. The Philippines can offer the US opportunity for a larger military presence in the region, and the US can offer the Philippines preferential trade agreements to reinvigorate their export industries.
This is good news for the Philippines’ manufacturing industries because the US remains the major market for Southeast Asian exports. During the Philippines’ President’s visit to Washington, agreements like the SAVE Act and the Trans-Pacific Partnership were discussed at length and Secretary of State Hillary Clinton recently announced her support of the proposal. Lighter barriers to trade between the two countries will no doubt increase business for suppliers in the Philippines. Look for this partnership to become integral in the development of the United States’ presence in East Asia.

Last week, the President of the Philippines along with several other officials visited the United States in an effort on both sides to expand the alliance between the countries. Both countries have a vested interest in growing their relationship in regard to defense and also trade. Recently, the Philippines credit rating was upgraded by Moody’s, improving its international image and making the country more attractive for foreign investment.

The US and the Philippines have a strategic partnership that benefits both in different ways, here’s why:

  • The once robust manufacturing industry in the Philippines is losing out in exports to the US in key industries to more cost-competitive developing countries like Cambodia and Vietnam
  • The US wants to increase its partnerships and presence in East Asia to counter-balance the growing power of China

Both countries have much to gain from a stronger alliance. The Philippines can offer the US opportunity for a larger military presence in the region, and the US can offer the Philippines preferential trade agreements to reinvigorate their export industries.

This is good news for the Philippines’ manufacturing industries because the US remains the major market for Southeast Asian exports. During the Philippines’ President’s visit to Washington, agreements like the SAVE Act and the Trans-Pacific Partnership were discussed at length and Secretary of State Hillary Clinton recently announced her support of the proposal. Lighter barriers to trade between the two countries will no doubt increase business for suppliers in the Philippines. Look for this partnership to become integral in the development of the United States’ presence in East Asia.

In recent months, Indonesia has pushed to ban the export of raw natural resources, one notable resource being rattan. Rattan, a bamboo-like plant is a popular material in furniture products and comprises a large portion of Indonesia’s massive furniture industry. The new rattan regulation and the surrounding issues involving enforcement and infrastructural investment are representative of a larger trend in Indonesia to keep raw materials in the country.
Recently, wood-producers in Indonesia have been exporting one-third of their raw-rattan, leaving a shortage for local rattan furniture manufacturers. New regulation will attempt to change Indonesia from a raw exporter to a finished-product exporter. There is a slight risk of a decline in business as wood-producers are forced to shift their normal practices, but the moratorium on raw exports will likely help the domestic economy in the long-term.
Exports of rattan furniture have slowed since 2008 and exporting raw materials is not helping the domestic rattan industry. Instead of selling raw rattan to Indonesian furniture manufacturers, much of Indonesia’s rattan is sent to furnishing suppliers in other countries like China. Regulation keeping raw materials in the country will inevitably help strengthen the industry as a whole.
Bans on raw exports can be difficult to fully enforce. Smuggling is likely to become more common especially in an archipelago where products are shipped from island to island, leaving many opportunities for materials to change course at sea. Indonesia will have to supplement these export bans with much stronger customs enforcement.
Policies are in the works to stop the export of raw mining commodities as well as crude palm oil. These new regulations will need to be supported by more infrastructural development in the country. Indonesia has given these policies until 2015 to go into full effect. In the preceding years there will likely be a large-scale effort to build out each industry so that the entire process from raw material to finished product can be managed domestically.
Indonesia’s handling of its rattan industry is a micro example of a macro trend. Indonesia and similar emerging economies are trying to keep their natural resources within their borders. Larger economies with more developed industries are importing raw materials from less developed countries and manufacturing finished products. In an effort to grow more comprehensive industries, emerging economies need to invest in creating complete, domestic supply chains.
As emerging economies reduce their raw exports and increase their domestic production capabilities, investment is key. Attracting interest from foreign businesses is necessary to gain capital to build more robust industries. Large-scale growth takes time but reducing and even eliminating exports of raw materials is a step in development taken by many of today’s leading economies.

In recent months, Indonesia has pushed to ban the export of raw natural resources, one notable resource being rattan. Rattan, a bamboo-like plant is a popular material in furniture products and comprises a large portion of Indonesia’s massive furniture industry. The new rattan regulation and the surrounding issues involving enforcement and infrastructural investment are representative of a larger trend in Indonesia to keep raw materials in the country.

Recently, wood-producers in Indonesia have been exporting one-third of their raw-rattan, leaving a shortage for local rattan furniture manufacturers. New regulation will attempt to change Indonesia from a raw exporter to a finished-product exporter. There is a slight risk of a decline in business as wood-producers are forced to shift their normal practices, but the moratorium on raw exports will likely help the domestic economy in the long-term.

Exports of rattan furniture have slowed since 2008 and exporting raw materials is not helping the domestic rattan industry. Instead of selling raw rattan to Indonesian furniture manufacturers, much of Indonesia’s rattan is sent to furnishing suppliers in other countries like China. Regulation keeping raw materials in the country will inevitably help strengthen the industry as a whole.

Bans on raw exports can be difficult to fully enforce. Smuggling is likely to become more common especially in an archipelago where products are shipped from island to island, leaving many opportunities for materials to change course at sea. Indonesia will have to supplement these export bans with much stronger customs enforcement.

Policies are in the works to stop the export of raw mining commodities as well as crude palm oil. These new regulations will need to be supported by more infrastructural development in the country. Indonesia has given these policies until 2015 to go into full effect. In the preceding years there will likely be a large-scale effort to build out each industry so that the entire process from raw material to finished product can be managed domestically.

Indonesia’s handling of its rattan industry is a micro example of a macro trend. Indonesia and similar emerging economies are trying to keep their natural resources within their borders. Larger economies with more developed industries are importing raw materials from less developed countries and manufacturing finished products. In an effort to grow more comprehensive industries, emerging economies need to invest in creating complete, domestic supply chains.

As emerging economies reduce their raw exports and increase their domestic production capabilities, investment is key. Attracting interest from foreign businesses is necessary to gain capital to build more robust industries. Large-scale growth takes time but reducing and even eliminating exports of raw materials is a step in development taken by many of today’s leading economies.

Recent years have brought focus to the impending Trans-Pacific Partnership. The TPP is an ambitious trade agreement with countries on either side of the pacific to remove barriers to trade and promote exports, imports and an overall supply chain within the member nations. Thus far there are ten countries involved in the partnership: USA, Peru, Chile, Vietnam, Singapore, New Zealand, Australia, Malaysia, Brunei and Japan.

Noticeably absent is, of course, China. Why? The TPP has specific requirements of its members, requirements not attuned to (if not purposefully in contrast to) China’s long-term economic goals. China is certainly still eligible to join TPP talks but Chinese leaders likely desire more give from the partnership. Obama’s recent promotion of the TPP could even be seen as a threat to China; ‘play by the rules or get out of the game’. If the US has stronger ties and softer trade barriers with China’s neighboring countries, it will be more likely for American businesses to source goods from the other TPP members instead of China.

These developments are not surprising and highlight the ongoing trade rift between the US and China. Inevitably there will have to be compromise - it’s impossible for two superpowers to play a game of chicken that ends well. Not only will China have to realize its economic reliance on the west, the US will have to recognize China’s right to influence the terms of the discussion. China’s rise as an economic power is waning, but it won’t go quietly.

Recent years have brought focus to the impending Trans-Pacific Partnership. The TPP is an ambitious trade agreement with countries on either side of the pacific to remove barriers to trade and promote exports, imports and an overall supply chain within the member nations. Thus far there are ten countries involved in the partnership: USA, Peru, Chile, Vietnam, Singapore, New Zealand, Australia, Malaysia, Brunei and Japan.

Noticeably absent is, of course, China. Why? The TPP has specific requirements of its members, requirements not attuned to (if not purposefully in contrast to) China’s long-term economic goals. China is certainly still eligible to join TPP talks but Chinese leaders likely desire more give from the partnership. Obama’s recent promotion of the TPP could even be seen as a threat to China; ‘play by the rules or get out of the game’. If the US has stronger ties and softer trade barriers with China’s neighboring countries, it will be more likely for American businesses to source goods from the other TPP members instead of China.

These developments are not surprising and highlight the ongoing trade rift between the US and China. Inevitably there will have to be compromise - it’s impossible for two superpowers to play a game of chicken that ends well. Not only will China have to realize its economic reliance on the west, the US will have to recognize China’s right to influence the terms of the discussion. China’s rise as an economic power is waning, but it won’t go quietly.

Also catching up with China is Southeast Asia’s largest economy: Indonesia. This week, Indonesia’s President, Susilo Bambang Yudhoyono announced an increase in investment in the country’s infrastructure. This year more than $18 billion in government spending will be dedicated to improving and building new roads, railways and airports. This type of investment fosters development of businesses and long-term economic growth for the entire country.
 
Indonesia’s growth in GDP has picked up in recent years. This can be attributed to a number of factors but one major growth area has been exports. A boost in funding from the government (this year 19% more than last year) will help continue Indonesia’s rise. Increasing the effect of this funding is a recent land-acquisition bill, making it easier for the government to obtain land on which to build roads, rails and airports.
What does this mean for businesses in Indonesia?
Infrastructural development lowers costs. Those familiar with the frequent and severe traffic in major cities like Jakarta know the difficulties moving products within the country. More efficient transportation systems like roads and trains bring down the cost of transporting goods. The transportation cost gets tacked on to the price tag for the end buyer. Lowering the transportation cost lowers the end cost of a product. These initiatives will make Indonesia even more attractive to buyers as it already has shown to be in recent years.
The markets are reacting. Demand for shares of Indonesian cement and energy companies is increasing as those stocks are bound to grow with the government’s cash infusion.
More can and likely will be done to improve the exporting process in Indonesia. As the transportation of goods within the country becomes easier with the aid of new roads and rails, the ports and other points of export will need to improve. Indonesia’s Minister of Trade, Gita Wirjawan said last week that a lack of investment in ports will lead to a bottleneck situation. This issue is likely to be addressed as part of this year’s $18 billion round of funding toward infrastructure.

Also catching up with China is Southeast Asia’s largest economy: Indonesia. This week, Indonesia’s President, Susilo Bambang Yudhoyono announced an increase in investment in the country’s infrastructure. This year more than $18 billion in government spending will be dedicated to improving and building new roads, railways and airports. This type of investment fosters development of businesses and long-term economic growth for the entire country.

Indonesia’s growth in GDP has picked up in recent years. This can be attributed to a number of factors but one major growth area has been exports. A boost in funding from the government (this year 19% more than last year) will help continue Indonesia’s rise. Increasing the effect of this funding is a recent land-acquisition bill, making it easier for the government to obtain land on which to build roads, rails and airports.

What does this mean for businesses in Indonesia?

Infrastructural development lowers costs. Those familiar with the frequent and severe traffic in major cities like Jakarta know the difficulties moving products within the country. More efficient transportation systems like roads and trains bring down the cost of transporting goods. The transportation cost gets tacked on to the price tag for the end buyer. Lowering the transportation cost lowers the end cost of a product. These initiatives will make Indonesia even more attractive to buyers as it already has shown to be in recent years.

The markets are reacting. Demand for shares of Indonesian cement and energy companies is increasing as those stocks are bound to grow with the government’s cash infusion.

More can and likely will be done to improve the exporting process in Indonesia. As the transportation of goods within the country becomes easier with the aid of new roads and rails, the ports and other points of export will need to improve. Indonesia’s Minister of Trade, Gita Wirjawan said last week that a lack of investment in ports will lead to a bottleneck situation. This issue is likely to be addressed as part of this year’s $18 billion round of funding toward infrastructure.

In the past ten years, China has gained one fierce competitor: Vietnam. Much of China’s manufacturing has been moved to Vietnam which is much more inexpensive - the global financial crisis has only sped up this process. Recently, HSBC ranked Vietnam among the top ten countries for long-term economic growth. The bank predicts that with a steady growth rate of 5.2%, Vietnam will reach an annual GDP of $451 billion by 2050. Some say the country can do even better, however there are some infrastructural and policy issues Vietnam needs to address.

Vietnam’s strengths in the changing world economy are many. With a cost competitive and youthful labor force, abundant natural resources, and growing infrastructural support, Vietnam has attracted a large amount of foreign investment. Because of these factors, Vietnam has shown rapid annual GDP growth of nearly 7% in the 21st century according to the McKinsey Global Institute. This rate of growth is not expected to continue because most of it is attributed to the availability of the labor force. As more and more Vietnamese enter the manufacturing industries, labor will inevitably become more expensive and slow growth. These three things will help stave off a slow-down:

Productivity: As Vietnam’s economy grows and these is less demand for jobs, wages will likely increase. This is a natural progression in a growing country, but needs to be paired with increased productivity. A more productive and skilled workforce will continue foreign interest in Vietnamese manufacturers.

Trade liberalization: The Trans-Pacific Partnership along with other agreements aimed at removing trade barriers will aid Vietnam’s growth. Because Vietnam has strong history of apparel and textiles manufacturing, the country is positioned to become to go-to source for those products for each country that shares a trade agreement with Vietnam.

Diversification of the economy: More diverse manufacturing industries will be needed to continue sustained growth. Focus on apparel, textiles, furnishings and home accessories will need to (and is beginning to) shift to electronics and other high-skill manufacturing. Vietnam is already on its way with investment from companies like samsung and intel.

The future for Vietnam’s economy is bright, but growth must be managed wisely. Stronger oversight from government economic policies is needed. Risk of inflation and easy-credit is a common worry of countries with strong growth. An infrastructural push against these forces paired with the push for more liberalized trade will be the key to Vietnam’s stabilized growth in the coming years.

In the past ten years, China has gained one fierce competitor: Vietnam. Much of China’s manufacturing has been moved to Vietnam which is much more inexpensive - the global financial crisis has only sped up this process. Recently, HSBC ranked Vietnam among the top ten countries for long-term economic growth. The bank predicts that with a steady growth rate of 5.2%, Vietnam will reach an annual GDP of $451 billion by 2050. Some say the country can do even better, however there are some infrastructural and policy issues Vietnam needs to address.

Vietnam’s strengths in the changing world economy are many. With a cost competitive and youthful labor force, abundant natural resources, and growing infrastructural support, Vietnam has attracted a large amount of foreign investment. Because of these factors, Vietnam has shown rapid annual GDP growth of nearly 7% in the 21st century according to the McKinsey Global Institute. This rate of growth is not expected to continue because most of it is attributed to the availability of the labor force. As more and more Vietnamese enter the manufacturing industries, labor will inevitably become more expensive and slow growth. These three things will help stave off a slow-down:

Productivity: As Vietnam’s economy grows and these is less demand for jobs, wages will likely increase. This is a natural progression in a growing country, but needs to be paired with increased productivity. A more productive and skilled workforce will continue foreign interest in Vietnamese manufacturers.

Trade liberalization: The Trans-Pacific Partnership along with other agreements aimed at removing trade barriers will aid Vietnam’s growth. Because Vietnam has strong history of apparel and textiles manufacturing, the country is positioned to become to go-to source for those products for each country that shares a trade agreement with Vietnam.

Diversification of the economy: More diverse manufacturing industries will be needed to continue sustained growth. Focus on apparel, textiles, furnishings and home accessories will need to (and is beginning to) shift to electronics and other high-skill manufacturing. Vietnam is already on its way with investment from companies like samsung and intel.

The future for Vietnam’s economy is bright, but growth must be managed wisely. Stronger oversight from government economic policies is needed. Risk of inflation and easy-credit is a common worry of countries with strong growth. An infrastructural push against these forces paired with the push for more liberalized trade will be the key to Vietnam’s stabilized growth in the coming years.

As China’s future leader, Xi Jinping visits the United States, Obama is strongly encouraging him and his country’s policy to start approaching trade in a much different way. It’s no secret that a lot of Obama’s positioning on this is mostly rhetoric - because popular opinion is that China is to blame for our unemployment rate (Obama and I and most other informed Americans know that our unemployment is more complicated than that). That being said, shifting the way China does business is going to be helpful to the economically suffering first world countries in the long term.
China’s policy allows the country to grow and manufacture with little constraints. Lack of environmental or governmental barriers allows factories to produce at rates that far outpace countries with more prudent policies. This leads to one very large trade issue: dumping. China has a history of dumping cheap products into the US and EU markets obliterating the competition from local producers.
This happened in the 1990s when the China flooded the US market with garlic. Grown and shipped from China, garlic in stores became incredibly cheap…artificially cheap. China’s lax policies and arguable currency manipulation enabled garlic producers there to sell to buyers in the US at a price much lower than American garlic producers. ‘Dumping’ these cheap products into the US market makes it impossible for American suppliers to stay in business. Take a look next time you’re at the grocery store - most packaged garlic is ‘made in china’.

As China’s future leader, Xi Jinping visits the United States, Obama is strongly encouraging him and his country’s policy to start approaching trade in a much different way. It’s no secret that a lot of Obama’s positioning on this is mostly rhetoric - because popular opinion is that China is to blame for our unemployment rate (Obama and I and most other informed Americans know that our unemployment is more complicated than that). That being said, shifting the way China does business is going to be helpful to the economically suffering first world countries in the long term.

China’s policy allows the country to grow and manufacture with little constraints. Lack of environmental or governmental barriers allows factories to produce at rates that far outpace countries with more prudent policies. This leads to one very large trade issue: dumping. China has a history of dumping cheap products into the US and EU markets obliterating the competition from local producers.

This happened in the 1990s when the China flooded the US market with garlic. Grown and shipped from China, garlic in stores became incredibly cheap…artificially cheap. China’s lax policies and arguable currency manipulation enabled garlic producers there to sell to buyers in the US at a price much lower than American garlic producers. ‘Dumping’ these cheap products into the US market makes it impossible for American suppliers to stay in business. Take a look next time you’re at the grocery store - most packaged garlic is ‘made in china’.

This recent photo of China’s first aircraft carrier raises an interesting question: can we have a balance of power again?
It is symbolic and quite fitting that the Chinese bought this used carrier (a hold-over from the former Soviet Union) from Russia, because the last time the world had two militarily formidable nations was during the cold war. China’s development of a military with reach outside of its border and into foreign seas is significant. The United States is increasingly feeling the crippling price tag of being the world’s police, and China has the money to assume that role. This, of course, is against US interests and is why many political leaders are worried by this photo. What do you think?
(photo via The Guardian)

This recent photo of China’s first aircraft carrier raises an interesting question: can we have a balance of power again?

It is symbolic and quite fitting that the Chinese bought this used carrier (a hold-over from the former Soviet Union) from Russia, because the last time the world had two militarily formidable nations was during the cold war. China’s development of a military with reach outside of its border and into foreign seas is significant. The United States is increasingly feeling the crippling price tag of being the world’s police, and China has the money to assume that role. This, of course, is against US interests and is why many political leaders are worried by this photo. What do you think?

(photo via The Guardian)

Thank you!

So great to see everyone reblogging my stuff. This is really relevant subject-matter and I’m so stoked that there’s so much interest! Working on some more pieces now…stay tuned :)

 
Becoming familiar with the US Lacey Act is a necessity to do business with companies in the United States. Originally created to protect American wildlife, the US Lacey Act legislation now includes timber products being exported from other countries to the US. Its goal is to honor logging laws in other countries while simultaneously discouraging deforestation in vulnerable areas. For countries in Asia – where timber products are many and types of timber-harvesting are illegal, furnishings manufacturers need to be vigilant about the source of their product.
Five things that qualify a wood-based product as illegal under the Lacey Act:
Timber removed from a government protected or designated area. This may include a national park or wildlife reserve.
Timber removed from a forest where logging is legal but has been done without proper authorization.
Timber harvested without paying all required taxes and fees regarding harvesting, transport and sale of the timber.
Timber shipped in violation of exporting laws (i.e.: ban on timber exports)
Timber that has been stolen at any point in the supply chain.
The impact of the US Lacey Act on manufacturers is in transition. Manufacturers are responsible for their product and can face legal ramifications if they are operating without proper certifications. In the past few years, these crackdowns have made some US buyers wary of the region which has led to a redistribution of business. However, the furnishings industries in Asia and particularly Southeast Asia continue to grow. This policy is also becoming increasingly more relevant particularly for Indonesia as the government attempts to ban the export of raw rattan.
The best way to protect your company from potential violations of the Lacey Act is to exercise due care at each point in the supply chain process. An excellent way to do this is to ensure that the companies providing you with the given plant-based product have compliance certification.
Despite these legislations, the outlook for furnishings suppliers is hopeful. With more oversight coming from government agencies and more refined compliance certification systems, the responsibility to monitor logging processes is shifting away from manufacturers. Illegal logging remains prevalent and therefore caution is still necessary for manufacturers to continue in this long-term growth industry.

Becoming familiar with the US Lacey Act is a necessity to do business with companies in the United States. Originally created to protect American wildlife, the US Lacey Act legislation now includes timber products being exported from other countries to the US. Its goal is to honor logging laws in other countries while simultaneously discouraging deforestation in vulnerable areas. For countries in Asia – where timber products are many and types of timber-harvesting are illegal, furnishings manufacturers need to be vigilant about the source of their product.

Five things that qualify a wood-based product as illegal under the Lacey Act:

  1. Timber removed from a government protected or designated area. This may include a national park or wildlife reserve.
  2. Timber removed from a forest where logging is legal but has been done without proper authorization.
  3. Timber harvested without paying all required taxes and fees regarding harvesting, transport and sale of the timber.
  4. Timber shipped in violation of exporting laws (i.e.: ban on timber exports)
  5. Timber that has been stolen at any point in the supply chain.

The impact of the US Lacey Act on manufacturers is in transition. Manufacturers are responsible for their product and can face legal ramifications if they are operating without proper certifications. In the past few years, these crackdowns have made some US buyers wary of the region which has led to a redistribution of business. However, the furnishings industries in Asia and particularly Southeast Asia continue to grow. This policy is also becoming increasingly more relevant particularly for Indonesia as the government attempts to ban the export of raw rattan.

The best way to protect your company from potential violations of the Lacey Act is to exercise due care at each point in the supply chain process. An excellent way to do this is to ensure that the companies providing you with the given plant-based product have compliance certification.

Despite these legislations, the outlook for furnishings suppliers is hopeful. With more oversight coming from government agencies and more refined compliance certification systems, the responsibility to monitor logging processes is shifting away from manufacturers. Illegal logging remains prevalent and therefore caution is still necessary for manufacturers to continue in this long-term growth industry.