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A Quick Peek at the Good Side of the Environmental Goods Agreement

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A Quick Peek at the Good Side of the Environmental Goods Agreement
Last September, Kristi Ellis –a reporter for Women’s Wear Daily – published an article named “Industry Weighs Both Sides of Environmental Goods Agreement (EGA).” In it, she objectively discussed how the parties involved in the drafting of this economic treaty disagree on the impact that the EGA would have on the fashion and textile industry and how it will eventually affect the overall economy. By explaining what the main objective of the Environmental Goods Agreement is and what the positions of the WTO members, fashion and textile industry officials are, Ellis allowed the readers to conclude if the treaty will or will not benefit the fashion industry and the economy at the end of the day. Ellis explained that what the WTO members are looking for by drafting this treaty, “it is to eliminate certain import taxes on some environmental goods, like fibers, fabrics, yarns and recycle and green apparel.” Even though U.S. textile manufactures believe that the document will only threatened the existence of their almost exclusive business and negatively impact the U.S. economy, the EGA should be consider as a tool that will bring benefits to the environment, profits to apparel retailers and fashion designers, savings to the consumers and balance in the negotiations between farmers and manufactures. U.S. trade representatives and apparel importers undoubtedly believe that by removing tariffs on certain environmental goods, the prices for organic fabrics will significantly decrease and designers will have more organic textiles to choose from.
U.S. textiles manufactures have monopolized the organic market for a little more than a decade. “Companies like Monsanto, DuPont/Pioneer Hi-Bred, Syngenta, and Dow Agro Science own 80% of the US corn market and 70% of the soybean business.” Such monopolization not only has limited the supply of organic fabrics around the world, but farmers’ negotiation power pricing over their crops production is almost null.
When few entities are in control of a specific industry, their power of setting prices over their raw goods enables them to control how much are the profits that members who make up a supply chain can make. In this specific case, the U.S. textiles manufactures control the amount of seeds that would be sold to the farmers; the price the farmers would have to sell their production back to them; the price that apparel manufactures or designers would have to pay for the fabrics to the textile manufactures; the price retailers would have to purchase the goods from the designers or apparel manufactures; and finally the selling price of the finished good -jacket, shirt, blouse, etc.- that the consumer would eventually be charge by the retailer. The EGA will change all of the above once is adopted and ratified. The trade agreement would not only enable small textile industries around the world to easily enter the market of organic fabrics and challenge the price of raw materials which has been controlled by the U.S. textiles manufactures, but farmers also would have the capacity to fairly negotiate their crops, and designers and apparel manufacturers would be able to increase their production because the stock of organic fabrics will rise. What is more, not only would consumers be able to satisfy their emotional need of owning a garment or several ones that claim to help the environment but the overall economy would benefit due to the fact that exports and imports of organic raw materials and apparel finished would significantly grow.
Through the last couple of decades, several trade treaties such as NAFTA had been signed among several countries and they have shown excellent results over time. The EGA promises to be a success once implemented, it will not only benefit the environment but most importantly it will balance the negotiation power between all levels within the fashion supply and will create a more equal and fairness fashion industry market.

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[ 1 ]. Kristi Ellis, “Industry Weighs Both Sides of Environmental Goods Agreement,” WWD, September 11,2015, accessed September 14, 2015, http://wwd.com/business-news/government-trade/industry-weighs-sides-environmental-goods-agreement-10218193/.
[ 2 ]. Ken Roseboro, “The GMO Seed Cartel,” non-gmoreport.com, February 13, 2013, accessed October 11,2015, http://www.non-gmoreport.com/articles/february2013/the-gmo-seed-cartel.php.
[ 3 ]. Ibid.

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