The fashion industry continues to grapple with the complexities of sourcing cotton from Xinjiang, China, amidst allegations of forced labor. While many brands have pledged to avoid Xinjiang cotton, recent tests reveal its presence in nearly 20 per cent of apparel sold by major retailers in the US and worldwide. This raises concerns about the efficacy of current supply chain tracing mechanisms and the ability of brands to adhere to ethical sourcing standards.

Navigating the backlash and supply chain obfuscation

Japanese clothing company Fast Retailing owners of brand Uniqlo, recently faced backlash from Chinese consumers after its CEO stated the company does not use Xinjiang cotton. The Xinjiang Cotton Association issued a statement to refute claims on forced labor in response to remarks made by Tadashi Yanai, CEO of Fast Retailing, parent company of global fashion brand Uniqlo, in an interview with the BBC on November 28, in which he said his company is not using cotton from Xinjiang. The Association emphasized that Xinjiang cotton is one of the best in the world and strongly opposes the US using the so-called "forced labor" claims and other baseless reasons to discredit and boycott Xinjiang cotton and its products.

This incident highlights the tightrope brands walk between adhering to ethical standards and maintaining access to the lucrative Chinese market. Uniqlo's case also exemplifies the challenges of ensuring transparency in complex global supply chains. While the company claims to avoid Xinjiang cotton, one of its major suppliers, Lu Thai Textile, has historical ties with the region. Although recent reports suggest Lu Thai may have shifted its sourcing practices, the case underscores the difficulty of guaranteeing the origin of materials in multi-tiered supply chains.

All about sourcing and loopholes

The UFLPA, enacted in 2022, closed a loophole that allowed goods under $800 to enter the US without thorough customs checks. This loophole was previously exploited to import Xinjiang cotton by shipping it in small packages, bypassing scrutiny.

However, new methods of obfuscating the origin of Xinjiang cotton have emerged. One tactic involves exporting Xinjiang cotton to intermediary countries, where it is blended with local cotton and manufactured into finished goods. This makes it nearly impossible to trace the cotton back to its origin, effectively circumventing the UFLPA.

Table: Key players and their stance on Xinjiang cotton

It maybe noted that in 2021, Xinjiang accounted for 85 per cent of China's cotton production and nearly 25 per cent of global supply. However, following forced labor allegations, the China Cotton Association estimated an 8 per cent drop in Xinjiang's cotton production in 2023 and a 5 per cent reduction in planting areas. Tests reveal traces of Xinjiang cotton in nearly 20 per cent of apparel sold by major retailers globally, despite efforts to avoid it.

The issue of Xinjiang cotton continues to challenge global brands. Balancing ethical sourcing with maintaining market access in China requires a delicate approach. While regulations like the UFLPA aim to prevent the import of goods linked to forced labor, the complexity of global supply chains and the emergence of new methods to obfuscate the origin of materials highlight the need for ongoing vigilance and stricter enforcement. The question remains: can brands truly guarantee their products are free from Xinjiang cotton, and can consumers trust those claims?