A Global View in Mind Means More Job and Career Oppertunities in the Fashion Apparel Industry

(Note: the functions & jobs below the U.S. flag mean they are based in the United States;  Remember, apparel are “made in the world”–just like iphone and ipad. Even imports contain U.S. added value.)

021313_Moongate_Assoc_Global_Value_Chain_Report

Source: Moongate Association (2012). Analyzing the Value Chain for Apparel Designed in the United States and Manufactured Overseas

Building Collapse Kills 200 Bangladeshi Garment Workers

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When can tragedy as such come to an end!?

NewYork Times reports today (April 25, 2013)

“A building housing several factories making clothing for European and American consumers collapsed into a deadly heap on Wednesday, only five months after a horrific fire at a similar facility prompted leading multinational brands to pledge to work to improve safety in the country’s booming but poorly regulated garment industry.

The Bangladeshi news media reported that inspection teams had discovered cracks in the structure of Rana Plaza on Tuesday. Shops and a bank branch on the lower floors immediately closed. But the owners of the garment factories on the upper floors ordered employees to work on Wednesday, despite the safety risks.

International attention was focused on labor conditions in Bangladesh five months ago, with the fatal fire at Tazreen Fashions, a garment factory near Dhaka. That fire brought pledges from government officials and many global companies to tighten safety standards.

Bangladesh is the world’s second-leading garment exporter, trailing only China, but the industry has been plagued by concerns over safety and angry protests over rock-bottom wages. The industry has grown rapidly in the past decade, particularly as rising wages in China have pushed many global clothing companies to look for lower costs elsewhere. Bangladesh has the lowest labor costs in the world, with the minimum wage for garment workers set at roughly $37 a month.

Such low labor costs have attracted not just Walmart but almost every major global clothing company, including Sears, Gap, Tommy Hilfiger and many others. Bangladesh now has more than 5,000 garment factories, employing more than 3.2 million workers, many of them women, and advocates credit the industry for lifting people out of poverty, even with such low wages. Exports also provide a critical source of foreign exchange that helps the government offset the high costs of imported oil.

But critics have argued that the outsize importance of the industry has made the government reluctant to take steps that could increase costs or alienate foreign brands. Labor unions are almost nonexistent, and a labor organizer, Aminul Islam, was tortured and murdered last year. The case remains unsolved. Meanwhile, some factory owners say they cannot raise wages or invest in upgrading facilities because of the low prices paid by Western brands.

The news was also covered by CNN:

http://www.cnn.com/2013/04/25/world/asia/bangladesh-building-collapse/index.html

NPR News Discussion

http://www.npr.org/2013/05/02/180557959/ethical-fashion-is-the-tragedy-in-bangladesh-a-final-straw

Impact of the Trans-Pacific Partnership on Textile and Apparel Trade in the Pacific Rim

TPP on T&A trade in the pacific rim

Citation: Lu, S. (2013). Impact of the Trans-Pacific Partnership on textile and apparel trade in the Pacific Rim. World Trade Organization Focus, 20(5), 67-77.

For questions, please contact the author: shenglu@mail.uri.edu

Three U.S. Textile Organizations Merge

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If you’ve finished the third part of the T-shirt book, you should remember Auggie Tantillo and the American Manufacturing Trade Action Coalition (AMTAC) under his leadership. On March 28, 2013,  AMTAC together with the National Textile Association (NTA) joined the National Council of Textile Organization (NCTO), which will become the flagship organization representing the interests of the U.S. textile industry (textile mills and texile product mills which produce fibers, yarns, fabrics, home textiles and industrial textiles). This new movement could strengthen the voice of the U.S. textile industry in Washington DC, but at the same time can also be read as a sign of the declining industry base of AMTAC and NCTO.

The press release of the merger can be downloaded from here

China’s chair left unoccupied at Obama’s free trade party

Yesterday in class, some of you asked why did the U.S. decide to join the TPP negotiation at the very beginning? The following report from the Financial Times (UK) may provide some insightful views. To put it simply, it is a big game involving national interests. You can also rethink about those points I mentioned in the class regarding the “strategic importance of Asia to the US”.

From Financial Times April 2, 2013

With the rise of China in its sights, the Obama administration has posted marines in Darwin, Australia, and increased the number of warships visiting Subic Bay in the Philippines. The “pivot” to Asia now has a new stopover: Brussels.

After years of discussing the idea, the US and the EU are finally starting to negotiate a free-trade agreement which would form an economic zone covering 40 per cent of the world’s gross domestic product.

At the same time, momentum is building on another important trade initiative, the Trans-Pacific Partnership, which brings together the US with several of the Asia-Pacific region’s most dynamic economies: Singapore, Australia, Vietnam and – since two weeks ago – Japan. It will come as a surprise to anyone who spent a lot of time on the campaign trail last year, but free-trade agreements have emerged as one of the biggest priorities of Barack Obama’s second term as US president.

The striking feature of this burst of free trading is who is absent. The agreements are one of the fresh ways Washington is developing to deal with China, the world’s biggest exporter of manufactured goods. After urging China to behave as “a responsible stakeholder” and after the brief flirtation with a G2 arrangement in Mr Obama’s first year, the latest trade approach might be characterised as ABC – Anyone But China.

Supporters of the US-EU trade pact complain that it is about more than China. They point to the boost to growth that could flow from a deal between two partners which already have a two-way annual trade in goods and services of $1tn.

However, much of the substance of the EU talks and of TPP points to China. The agenda includes state subsidies for business and protecting intellectual property – the sorts of issues that are huge bones of contention with Beijing.

If the US can get enough important countries to sign up, it hopes to establish global trading standards that China would feel obliged to respect.

On Capitol Hill, where free trade is not an easy sell in an era of unemployment of more than 7.5 per cent, the China angle helps to rally support.

“This is very much part of our China strategy,” an aide to a leading Republican senator puts it, talking of the discussions with the EU.

More broadly, the two negotiations reflect a different approach to global governance. Prolonged deadlock over the Doha trade round, with similar stalemates about climate change, small arms and other issues, has led to deep scepticism about the idea of achieving global agreements on important issues.

TPP and the US-EU trade talks represent an alternative strategy, an attempt to forge fresh rules by appealing to smaller groups of like-minded nations, in this case working around China rather than with Beijing. Supporters say this is not an abandonment of global institutions like the World Trade Organisation, but simply a realistic assessment of how to get things done.

The big question, of course, is how China will react. Ever since it joined the WTO more than a decade ago, China has had one foot inside the global trading system and one outside it.

On most of the occasions that China has lost legal challenges at the WTO, it has implemented the rulings and made its trade laws compliant. But Beijing has yet to open up government procurement, an important factor in an economy like China’s. At the same time, allegations of Chinese hacking of trade secrets from other countries are seen by many as an affront to the very idea of free trade.

Beijing has strong views about what is really going on.

“The US is trying to rewrite global trade rules behind our backs,” says a senior Chinese official.

The risk of the US approach is that it could encourage China to turn its back even further on the global trading system, diminishing the incentive to comply rather than intensifying it.

If that were to happen, the US-EU trade talks would not herald a new era of economic integration but rather another nail in the coffin of globalisation.