Patterns of World Textile Trade:2000-2010

The following findings are from:

Lu, S. (2013). Impacts of quota elimination on world textile trade: A reality check from 2000 to 2010, Journal of the Textile Institut, 104(3), 239–250.

         “Findings of this study challenge the practices of previous studies that evaluated the impacts of quota elimination mostly by focusing on the performances of developing countries in the U.S. and EU markets (Nordas, 2004; Curran, 2008). Although such strategy may work for clothing trade, its appropriateness for scrutinizing world textile trade is evidenced to be questionable. Particularly, to manufacture textiles, it places higher requirements on a country’s technology advancement level and capital abundance than clothing production which is more labor intensive in nature and with lower business entry threshold (Dickerson, 1999). Therefore, as shown in the study, it was the developed countries rather than the developing countries that remain dominant and competitive textile exporters in the world today (WTO, 2011).  On the other hand, the developed countries are no longer leading textile importers either because of their dramatic shrinkage of domestic clothing manufacturing capacity (Dicken, 2003). To certain extent, missing such distinct patterns of textile trade may be one reason why findings of many previous studies turned out to be inconsistent with the reality (Ahmad & Diaz, 2008).

       Second, findings of this study call for attention to the new round of structural change of world textile trade that may have unfolded since the outbreak of the world financial crisis in 2008. This is particularly the case for the high-income countries which suddenly saw sharper decline of their textile export from 2008 through 2010 compared with earlier years in the post-quota era. It is unclear whether such phenomenon is a temporary market fluctuation in nature or reflects a more permanent adjustment of economic structure that is undergoing in the developed countries. Whether and how the financial crisis has structurally affected the world textile trade can be further explored in future studies.

       Third, findings of this study reflect the difficulty of achieving upgrading of the textile and clothing sector in the less-developed countries.  Although the development theory proposed by Toyne (1984) and Dickerson (1999) optimistically predicted the gradual evolution of a country’s textile and clothing sector over time, results of this study indicated that this upgrading process turned out to be very slow in progress for the developing world. Particularly, in today’s globalized economy, the division of labor between the developed countries and the less-developed ones is largely value-chain based and different from the case of inter-industry division of labor when the development theory was introduced (Toyne, 1984; Gereffi, 1999).  It seems there lacks a clear mechanism for the less-developed countries to gradually move up their position in the clothing value chain and have the chance to build on capacity of manufacturing and exporting textiles.  However, chances may occur if the high-income countries proactively “give up” textile manufacturing and instead prioritize the development of other emerging sectors regarded as more strategically important in the post-crisis recovery. “

 

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Race against the machine

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Remember the four key words I mentioned in the class—globalization, technology, sustainability and leadership?

This is a short but inspiring book to read about technology and its impact on us:

 “When talking about jobs and unemployment, there has been a great deal of attention paid to issues like weak demand, outsourcing and labor mobility, but relatively little attention given to technology’s role. This was a serious omission. “

“Computers are now doing many things that used to be the domain of people only…Our technologies are racing ahead but many of our skills and organizations are lagging behind”

“technological progress does not automatically benefit everyone in a society. In particular, incomes have become more uneven, as have employment opportunities.”

For TMD/TM majors & faculties, it is critical (although sometimes painful) to think about: How technology advancement will affect the job availability and nature of the job in the fashion apparel industry in the years to come? Do we have/are we learning the “right skills” that can help us survive in the race against the machine in the 21st century?

China and the US Economy: Advancing a Winning Trade Agenda

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Last week in class, we discussed what globalization means and why international trade happens. This latest research report released by the U.S.-China Business Council (USCBC) on the U.S.-China commercial relationships provides latest evidence showing how the world two largest economies are interdependent with each other and mutually benefit from such a close trade partnership.  The report also highlights several key facts about the U.S.-China trade relationship, which often time is misunderstood by the general public.

Full text of the report is available at:

https://www.uschina.org/info/trade-agenda/2013/uscbc-trade-agenda-report.pdf