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Op-Ed: How Transparent are Country of Origin Labels?

When a consumer purchases a piece of apparel, an accessory, or even a bolt of cloth from the local fabric store, do they really know where the entire product is from?

The answer is simply no.

In a recent op-ed which appeared in Sourcing Journal by Gary M. Barraco dated July 15th, 2014 titled, “Are Brands Providing Too Much Transparency or Not Enough?” it got me thinking about the apparel, textile and accessory market. Do brands, retailers (via private label programs) and design houses provide enough information to the consumer when it comes to country of origin?

The U.S. government requires that the country of origin be permanently affixed and visible at the point of purchase, what it does not do require is that the maker of the product list all of the components of the apparel, textile or accessory product and where they originated.

The World Trade Organization (WTO) uses a definition of country of origin as the place where the product is produced. It further states that “to ensure that the rules of origin are transparent, that they do not have restructuring, distorting or disruptive effects on international trade, that they are administered in a consistent, uniform, impartial reasonable manner, and that they are based on a positive standard.”

There are two primary methods that countries use to adhere to the above guidelines–as they are not rules–set forth by the WTO, and they are substantial transformation or value added percentage test. In my opinion, the method most commonly used in the fashion industry is the substantial transformation method. This method essentially confers country of origin based on where the greater value is added to the product, which in many instances occurs at the factory level where the product is assembled and generally measured as the labor component.

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The consumer remains clueless as to the origin of the sewing thread, fiber, yarn, fabric, finishing, and packaging presuming they are sourced from various parts of the world and the factory is not a true vertical operation. All the consumer will see is the country listed in the garment, on a textile or an accessory where the item underwent a substantial transformation.

Over half of the upland cotton exported by the U.S. (on average) finds its way into China where much of it is converted into fabric that finds its way into garments that are then imported back into the U.S. Let’s take a look at a potential trail of a men’s 100 percent cotton knit shirt.

The cotton is picked, ginned, and baled here in the U.S., then exported to China where it is spun into yarn, knit into greige fabric, dyed, finished and shipped to Bangladesh where it is cut, sewn and packaged into a finished garment before being shipped back to the U.S. What does the consumer see as far as country of origin? “Made in Bangladesh.”

So how transparent is that? Perhaps the bigger question is: does the consumer care? If the answer is yes, which I think it is, then we need to be more transparent.

The industry as a whole focuses a great deal of energy on Corporate Social Responsibility (CSR)  and ethical issues, as it should, but much of it is aimed at the factory level. We need to be more transparent and look at the entire supply chain if we are to provide the consumer with all the information to make an informed purchase decision as Mr. Barraco suggests. The example of the men’s knit shirt is fairly straight forward, and provided that all parties to the process have adhered to sound CSR policies, the country of origin is a non-issue.

The dynamics of the issue change when pieces of the supply chain employ poor CSR practices. Let’s say the factory in Bangladesh passed the various litmus tests for good CSR practices but the mill that knit the fabric used child labor or discharged their dye effluents into the local river. Then what? How is the consumer to know without the knowledge a transparent supply chain could offer?

One of the last positions I held in industry was with an Irish Linen company. One of our competitors decided to weave their greige goods in India then bring the textiles into Northern Ireland then dye and finish them. The fact that they dyed and finished them in Belfast sufficed as a “substantial transformation,” and by the WTO guidelines, they could call the fabric Irish Linen. Major retailers in the U.S. bought the fabric and had garments made in China and sold in their stores with labels stating “Made in China of Quality Irish Linen.”

Transparent? I think not. But you be the judge. Is the fashion industry transparent when it comes to country of origin labeling or are they hiding behind WTO guidelines?


Fashion industry veteran Michael Londrigan arrived at LIM College as the Chair of the Fashion Merchandising Department in 2008 with nearly 30 years of experience in the apparel industry focusing on retail, wholesale and textiles. He has a strong background in product development along with extensive executive sales, marketing and merchandising skills. In 2012 Professor Londrigan was promoted to Dean of Academic Affairs. He also teaches several courses on the undergraduate and graduate levels, including Product Development, Menswear, Textiles, and Applied Concepts in Fashion Merchandising.