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Ethiopia’s Textile Industry Dealt a Big Blow

The largest childrenswear retailer in the US has cancelled millions of dollars’ worth of clothing orders from suppliers in Ethiopia because of the coronavirus pandemic, pushing companies into debt and leaving employees facing pay cuts. The Children’s Place (TCP), which has more than 1,000 stores in the US and 90 around the world and had a turnover of $2bn last year, cancelled orders from Ethiopia in March and delayed payments by six months for orders completed in January and February, suppliers told the Guardian. Ethiopian workers are the lowest paid in the global garment supply chain. According to a report by the NYU Stern Center for Business and Human Rights, the minimum wage for Ethiopian garment workers is $26 a month, compared with $95 in Bangladesh and $326 in China. Ethiopian suppliers claim that TCP has demanded retroactive rebates on products that had been shipped before the crisis. The Children’s Place is one of four leading US apparel brands sourcing goods from Ethiopia, alongside PVH, JC Penney and H&M. In its annual report last year, TCP cited Ethiopia as a “key sourcing region”. The Worker Rights Consortium said at least seven factories in Ethiopia were producing clothing for TCP stores, employing about 15,000 workers. In 2016, the Ethiopian government opened its flagship Hawassa Industrial Park to help boost Ethiopia’s economy through tax breaks for business and jobs for its growing population. Most of the country’s garment workers are young women who have migrated from poor rural areas.