TPP and the U.S. Textile and Apparel Industry: Questions from FASH455

tpp textileThe following discussion questions are proposed by students enrolled in FASH455 (Spring 2016). Please feel free to join our online discussion.

#1 Is TPP successful in terms of “creating new market access opportunities” for the U.S. textile and apparel industry? Why or why not?

#2 Should the U.S. textile industry be worried that Vietnam is quickly building its own textile industry because of TPP?

#3 Compared with the case of Vietnam in TPP, why was there little discussion on Mexico and Central American countries developing their local textile industry and becoming less reliant on textile imports from the United States in the context of NAFTA and CAFTA-DR?  

#4 If China joins the TPP, do you think they would support a “yarn-forward” rules of origin or a less restrictive one? Why?

#5 Given the grave concerns about the potential impact of TPP on the U.S. textile industry, what is the point of negotiating such a trade deal?

[Discussion is closed for this post]

Reference: TPP Chapter Summary: Textiles and Apparel

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Author: Sheng Lu

Professor @ University of Delaware

45 thoughts on “TPP and the U.S. Textile and Apparel Industry: Questions from FASH455”

  1. I think it was smart for Taiwan to not compete with other countries for low labor costs, but how is this benefiting the country in comparison to other countries that use the labor intensive sector of the apparel market?

  2. #2 I do not think that it should be a major concern of the US that Vietnam is building its own textile industry. It will take some time for it to become a major competitor and in the mean time the US should be working on ways to work with Vietnam in order to have it benefit the both of us instead of viewing Vietnam as a major competitior

    1. I agree, great comment Marissa. They are not yet a major competition, maybe if they are successful in the future they will be, but not for a few years at least.

    2. One follow-up question: do you mean Vietnam’s building up of its textile industry is not something the US textile industry should worry about or it is NOT easy for Vietnam to build up its textile industry?

  3. I think the US should not be worried about Vietnam creating their own textile industry. It will take a lot for that industry to start booming due to the initial fees that will cause high prices which will create major competition loss for Vietnam. There are other countries in the TTP that are already producing and doing well with the textile industry, so I think Vietnam should stay out of this part of the industry.

    1. Despite a possible slow start up, the US will inevitably suffer in the long run. Vietnam can definitely produce textiles for cheaper than the US making their products more desirable than products in the US which can eventually lead them to being obsolete in the market. Also, the startup may not be that slow. In the video, all of the textile factories looked very advanced. Their government also owns the textile factories in the country which gives them a great advantage that the US doesn’t have.

  4. Vietnam’s textile industry is a threat to the US. As they develop this industry and take take the place of China’s textile industry in the TPP, the United State’s textile industry is affected. This may reflect positively on the US consumers and retailers. However, losing this industry to Vietnam has a negative affect on US economics. Losing the manufacturing of textiles gives more power to Vietnam in the TPP

    1. I agree with the idea that the textile industry could be a threat to the US industry which is why I think that the US should start to come up with a way to work with Vietnams up and coming industry. Do you have any suggestions on how they could maybe do this? Also do you think that the positive impact on US consumers and retailers could outweigh the loss that the US economy may feel?

      1. For the US textile industry, definitely the ideal scenario is after TPP, Vietnam will start to import textiles from the US instead of China. Based on that, a more self-sufficient domestic textile industry, Vietnam will have less demand for textile imports.

        A good point on the US consumers. I personally like the comment made by NPR this morning that ” Lots of people feel a little better when they save money on cheap imports. But those who lose their jobs feel a lot worse.” http://www.npr.org/2016/04/18/474311768/why-candidates-are-out-of-sync-with-how-americans-really-feel-about-trade

  5. #3: I believe that there was little discussion about Mexico for a few reasons. No matter what, Mexico will be dependent on the US textile industry. The US helped grow Mexico’s textile industry and has brought to where it is today. Mexico is not as developed as Vietnam and cannot advance to the place where they are now. Vietnam’s textile industry also has government backing and funding so it is easier for them to grow since they are being supported by the government and have funds funneling into the industry. Mexico does not have this type of backing and the country is not as advanced technologically or economically, which is why it has relied on textiles from the US to produce their apparel. Even if Mexico is less reliant on the us compared to the past, I do not think that Mexico will ever stop its business with the US. If Mexico were to stop importing textiles from the US, the US would stop importing the apparel made in Mexico, and Mexico would have no reason to import textiles from anywhere.

    1. I strongly agree with Chloe that Mexico will be dependent on the US textile industry. They have helped Mexico grow to the industry they are today and provided textiles for them for years. I also believe when she states how Mexico is not as developed as Vietnam.

    2. these are great points. On the other hand, NAFTA maybe make Mexico too “comfortable” with using textiles provided by the US. And there is no financial incentives to have US textile mills to help Mexico develop its own textile sector. But Asia seems to be different because of the flying geese model: Many textile mills in China were invested by Japanese and South Korean firms and now they are further opening factories in Vietnam. Foreign direct investment plays a critical role in the development of a country’s local textile industry (eg: brining in capital and technologies).

  6. #5. Many people are very concerned about the downfall of the U.S. textile and apparel industry. It is important that negotiations regarding the TPP continue to take place in order to preserve the U.S. industry. Leaders in the American textile industry should be voicing their opinion in order to keep the standards in a positive light for Americans.

    1. I strongly agree with you Kassady. The U.S. textile and apparel industry needs to protect their wellbeing, which means it is necessary for them to negotiate any trades that may or may not take place. The TPP affects the entire industry, one trade could either negatively or positively impact it. Therefore, negotiations are always vital.

    2. But isn’t for the sake of the US textile industry, a better option is not to have a trade deal like TPP in place or a trade deal that excludes Vietnam? how to explain this phenomenon?

  7. #2 I feel that the US textile industry should be worried that Vietnam is quickly building its own textile industry because of TPP. Textiles is the major exporter for America and this brings major competition to them. Vietnam is one of US’s major competition. If Vietnam continues to grow it will be harder for the US to compete with them with prices and other factors. Taking away from markets that US does business with and other countries they worked with before.

  8. #2, I think that the U.S. should be concerned about Vietnam becoming self sufficient within the textile and apparel industry. Vietnam has the potential to take away a lot of business form the U.S. If Vietnam is creating its own textiles, they can then sell those textiles to countries that the U.S. currently supplies to. It would take business away from U.S. and could cause severe economic issues for the country.

    1. I agree with Kaeli that the US should be concerned with Vietnam becoming self sufficient within the textile and apparel industry. As they are able to produce products at a lower cost due to minimum wages, business would be taken away from the US creating issues in our economy as well as losing power as a textile manufacturing country.

  9. 1. I believe that the TPP is successful in creating new market access opportunities with allowing free trade. It is allowing the countries more and better access with trading and leaving more money to go to other areas in the industry for each country. Therefore, this is allowing the economies for the countries in the agreement to grow.

    1. I agree and this gives countries the ability to have a better economy and work together and learn about other cultures and histories. TPP allows countries to trade with no tariffs. Helps the world economy grow!!

  10. 5. Even though there are a lot of concerns for the United States in the TPP, it definitely has the ability to have more benefits than detriments if things are negotiated properly. Also, there are more aspects than just the textile industry involved in the TPP. It has to do with all aspects of trade. Even if within the TPP there are two nations that have strong textile industries, each nation can still be successful with trade. The United States and Vietnam could potentially negotiate a deal where each nation focuses on different aspects of textiles, and trades different textiles to different countries within the TPP. This way it would lower the competition between the two, and benefit each country equally. With different countries who are capable of developing different textiles and apparels within one trade negotiation, there can be many benefits of free trade.

  11. If China ends up joining the TPP, I believe that they would want a yarn forward rules of origin so that they could grow as the largest textile producer in the TPP. This is dangerous for the U.S. because, while they would also benefit from a yarn forward ROO, they would heavily compete with China as th biggest textile producer. However, the U.S. textile manufacturers aren’t the only opinions that matter in this case. U.S. apparel sector wants to do as much as it can to get apparel at the cheapest price, and the TPP can definitely do that. IF the textiles are made in china for cheaper, and then assembled in Vietnam and traded sans-tariff with the U.S. that would be huge for apparel prices in the U.S.

    1. good point! somehow I feel the same way. Similar as the case of the US, china may want to get a captured export market in neighboring less developed countries through free trade agreement.

  12. #5. While negotiating a trade deal such as the TPP, it is important to remember how the TPP will effect the United States as a whole and not just in relation to the textile industry in the United States. Free trade across the Pacific will benefit other sectors, such as pharmaceuticals trading. The Western Hemisphere supply chain may be threatened by Vietnam when the TPP is enacted, however, it is important the U.S. maintain its niche market in medical and hi-tech garments in order to stay competitive and have an advantage.

  13. #2 Yes, the U.S. textile industry should be worried that Vietnam is quickly building its own textile industry because of TPP. Vietnam probably produces cheaper textiles than the U.S., so this will take away from their U.S. textile market. If retailers have the choice between Vietnam’s (cheaper) textiles, and the U.S.’s textiles, they will most likely choose Vietnam’s, causing the U.S.’s industry to diminish.

    1. I completely agree. Retailers are constantly competing in price. Retailers like Wal-Mart and Forever 21 are dominating because of their low prices. If Vietnam can offer cheaper textiles than the US, manufactures are going to want to use their textiles to lower their prices. This being said, Vietnam has the capability of overtaking the US textile industry.

      1. through a more integrated supply chain, apparel “made in Vietnam” could become more price competitive when it uses locally made textiles

  14. In regards to question #2, I don’t believe the US should be worried about Vietnam’s growing textile industry. My main point of contention is the comparison to China. The US has experience with the powerhouse industries in China, thus we know how to deal with a larger textile sector than our own. As Vietnam grows their sector, I feel that we will already have the knowledge and experience to work with them. I think that the transition to working with Vietnam will be smooth through the TPP. Additionally, Vietnam’s textile sector will take time to become the best it can be. Due to time and financing the growth of their industry will not be immediate.

  15. I think the US textile industry should be worried about Vietnam’s textile industry. It’s another competitor in the industry and might take away market share from the US. If China gets involved in TPP, it will be even more of a threat to the US. Vietnam can produce textiles cheaper than the US, so if their industry keeps growing, they will become even more of a competitor for the US, especially since they are both involved in the TPP. I do not think they will grow big enough too quickly, but in the next 20 years, they could be a huge competitor for the US industry.

  16. #2 I believe that U.S. should be concerned about Vietnam’s growing textile industry. This is due to the fact that a large portion of U.S. advantage is the fact that they are able to produce these textiles since not many countries can. Without this upper hand in the manufacturing process, America will have to become more competitive in other ways. In addition, I believe that with both Vietnam’s textile industry and China’s textile industry the Eastern hemisphere will have a large hand in the textile industry which will put additional pressure on not only U.S. but all of the textile industries on the Western Hemisphere as well.

  17. #2) Yes, the United States should be worried about Vietnams development of their own textile industry because it will take away from the United States textile industry and the United States dominance in the textile and apparel industry

  18. #2: I think that it will take time before Vietnam’s textile industry will be established in totality. As stated in one of the articles read for Assignment 3 it wont be for another 5 years until the textile industry is successful. At that time the US may be out of luck as it may be cheaper and more efficient to source with countries within a closer proximity.

  19. #4 In the event that China joins the TPP, they would likely engage in “yarn forward” rules of origin as they are a large textile producer. This would be a major threat to nations such as the United States. I understand that there could be great benefits to having China join the TPP but I wonder which way the US leans towards if having them join would hurt our textile industry.

  20. #2 I think that once the textile industry starts building in Vietnam, it is going to be a threat to the US textile industry. The US textile industry is much stronger than the US apparel industry and that is the only way they have advantage in the fashion industry as a whole. If Vietnam becomes more prevalent in the industry, then this would increase competition with the US especially if each country decides to join more Trade Unions.

    1. I agree with you that Vietnam has the potential to be a huge threat to US textile industry. Hopefully within the years that the US textile industry is still ahead, they will be able to figure out another niche in the market which they face less competition from other countries.

  21. #2 I think the U.S. Textile Industry should in fact be worried that Vietnam is quickly building its own textile industry because of TPP. It creates competition and an increase in trade negatively. Resources will not be available for TPP and Vietnam will be at a competitive advantage because it is cheaper for them to manufacture and produce products in comparison to the U.S. The U.S. right now is at an advantage with the TPP because the U.S. makes the rules. However, if Vietnam creates its own textile industry, it will create its own rules and their cheaper production prices will be more attractive to other countries. This will negatively impact America’s economy, and Vietnam will gain more power within the Textile and Apparel Industry.

  22. #2) The U.S. should be worried about Vietnam’s development of their own textile industry because they are finding a way around using U.S. textiles. The U.S. is hoping that Vietnam will adopt textiles from the U.S. rather than sourcing them from China. Although it still removes China from the equation, the U.S. will not benefit.

  23. #2) I think that the US should definitely be worried and cautious of the fact the Vietnam is becoming more advanced and developed among the textile industry. Textiles are a major exporter for America and with Vietnam advancing they have the potential to compete with the US textile industry. I think that Vietnam has the ability to produce less expensive textiles at a much faster production rate than the US does. This could definitely take away from the US textile market, which will diminish their dominant presence in that particular industry.

      1. I like that this article commented connects with our FASH 455 Case Study 3 about the VF Corporation. A lot of outsourcing is now moving towards more innovative fabrics and textiles. We must reimagine what fabric is and rebirthing fabric into a high-tech industry. Fabric production has shifted to a more specialized production of fabrics. There is an increasingly large market for these innovative fabrics and textiles and companies must take this into consideration for the future of textiles in the US and outsourced overseas.

  24. The TPP has the potential to export goods to the U.S duty free- this helping not only the importer but exporter as well. If the whole process of fabric production, cutting and sewing of the finished garment happens in a TPP region, the product would be duty free. Some of the fabrics that are found in TPP regions cannot be found domestically. Otherwise, the apparel importers aren’t concerned whether textiles manufactured in the US are used, they want textiles and apparel to be treated like other products and want apparel to be cut sewn and prepared in the TPP area no matter where the fabrics come from. The textile industry would benefit from the “yarn-forward” rules much more than the importers.

    1. great! it seems our students have fully understand how rules of origin work in apparel sourcing and why free trade agreements matter to apparel companies

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