Gail Strickler, Former Assistant US Trade Representative for Textiles, on Trump’s Trade Policy

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Gail Strickler, Assistant U.S. Trade Representative for Textiles (2009-2015), who negotiated the textile chapter under the Trans-Pacific Partnership (TPP), visited UD on April 13 and delivered a public lecture on The Global Apparel Industry – Style and Substance. The event is part of the Fashion and Diplomacy Lecture Series sponsored by the Institute for Global Studies and the Department of Fashion and Apparel Studies.

During the talk, Gail made a few comments regarding trade policy in the Trump administration:

First, Gail believes that the existing U.S. free trade agreements (FTAs), trade preference programs (PTAs) and the U.S. commitments at the World Trade Organization (WTO) are unlikely to be undone by President Trump because retaliatory actions from other trading partners would be inevitable.

Second, regarding the North American Free Trade Agreement (NAFTA), Gail doesn’t think the proposed renegotiation would threaten the benefits presently enjoyed by the U.S. textile and apparel industry. Gail also thinks the Central America Free Trade Agreement (CAFTA-DR) is a lifeline for the U.S. domestic textile manufacturing sector. Notably, NAFTA and CAFTA-DR together account for almost 70% of U.S. yarn and fabric exports.

Third, as observed by Gail, Wilbur Ross, the Commerce Secretary, has been given an expanded role in trade in the Trump Administration. Gail believes Ross’s appointment is likely to bode well for NAFTA and CAFTA-DR on textiles because Ross until recently owned the International Textile Group (ITG), which has significant investments in Mexico and relies heavily on CAFTA-DR for its textile sales.

However, Gail doesn’t think concentrating on trade deficits to define trade policy is a very “good method” of navigating the trade world. Interesting enough, last time when the U.S. trade deficit significantly shrank was during the 2008 financial crisis.  

Gail is also a strong advocator of sustainability in the textile and apparel sector. She believes that trade programs can play a vital role in encouraging sustainable development, improving labor practices and facilitating sustainable regional supply chains. According to Gail, powerful the labor provisions in trade programs can be if strong incentives are coupled with a credible threat of rapid enforcement – little evidence of effectiveness if only one (or fewer) of these conditions is met. However, comparing with enforcing labor provisions, Gail finds promoting and enforcing environmental sustainability standards through trade agreements is much more complex in the textile and apparel sector and will require creativity and strong participation from private sectors and consumers.

Before the public lecture, Gail visited FASH455 and had a special discussion session with students on topics ranging from the textile and apparel rules of origin in TPP, NAFTA renegotiation, AGOA renewal and state of the U.S. textile and apparel industry.

The 2 Euro T-shirt

 

This video is a great reminder of the impact of our fashion apparel industry, in particular through trade and sourcing. One key learning objective of FASH455 is to help students get aware of those critical global agendas that are highly relevant to the textile and apparel sector.

Discussion Question: After watching the video, do you have any new thoughts about how you can contribute to the building of a better world as a FASH major?

Rana Plaza Case Study: Discussion Questions from FASH455

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#1 How shall we describe the relationship between the Alliance and the Accord? Are they collaborators or competitors? Do you think the Alliance and the Accord can join forces?

#2 How many inspectors are “enough” for Bangladesh? The case study mentions that the Alliance and the Accord are observing around 2,000 factories, but how about the other 3,000 in Bangladesh? And how about those unknown and “undocumented” factories, where the working conditions could be even worse?

#3 Do Western fashion brands genuinely care about what is happening in the Bangladeshi garment factories? Or do they actually care about their own interests—profit, public image and reputation among consumers?

#4 What has made Western fashion brands stay in Bangladesh after the Rana Plaza tragedy instead of moving their sourcing orders to other Asian countries in the area such as Cambodia and Vietnam?

#5 How transparent should be companies’ supply chain? Should fashion brands be required to disclose more supply chain information—such as where their products were made and who made them? What could be the difficulty of enforcing a more transparent apparel supply chain?

#6 In addition to more frequent inspections, what other measures can be taken to improve social responsibility practices in the garment industry?  

#7 Three years after the Rana Plaza, are you satisfied with the changes that have happened in Bangladesh? What major social responsibility problems in the Bangladeshi garment industry remain unsolved?

[Please feel free to join our online discussion. For the purpose of convenience, please mention the question # in your reply/comment.]

Debate on Used-clothing Trade, Sustainable Development Strategy and Wage Level in the Garment Industry: Discussion Questions from FASH455

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Debate on used-clothing trade and strategy for building a sustainable garment industry

#1 Should countries in East Africa ban on imported used-clothing for the survival of its own apparel manufacturing industry, which is at the nascent stage of development?

#2 From an environmental sustainability standpoint, wouldn’t it make sense for East Africa to continue importing used clothes for their Mitumba wholesale center rather than ceasing this trade and manufacturing new clothes? What is your view?

#3 If clothing manufacturing has significantly helped Haiti grow its economy, should East African countries follow the same development path?

#4 The reading article says that trade agreements have extended Haiti’s duty free access to the United States until 2020. What might happen to Haiti’s garment exports after 2020? Can it survive? In your view, is Haiti’s garment industry a model for sustainable development?

#5 Why is the United States willing to offer duty free access for apparel made in Haiti but not made in other Asian countries, such as Bangladesh? Is it fair?

Debate on Wage level of garment workers

#6 Garment manufacturing and exporting are picking up Haiti’s economy, although most Haitian garment workers only make roughly $180-$200 per month. Meanwhile, Haiti is looking to attract retailers’ further investment. Given the fact that there are so many places in the world that retailers can source clothing from, will an increase of wage level drive away foreign investment in Haiti and negatively affect Hait’s garment exports?

#7 If consumers are willing to pay higher, will it help increase the wages of factory workers in developing countries? Or as consumers, we can do little about it?

#8 Should globalization be responsible for the low wage of garment workers in the developing countries? Without globalization, would garment workers in the developing countries live a better life?

[Please feel free to join our online discussion. For the purpose of convenience, please mention the question # in your reply/comment.]

Global Trade of Used Clothing (Updated: October 2015)

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GlobalMapUSedClothing

United States

  • Generates 1.4 million tons of used clothing annually
  • Exports 800,000 tons of used clothing annually
  • 20% of used clothing sold domestically in thrift stores
  • Non-wearable material of used clothing is reprocessed into fibers for upholstery, insulation, soundproofing, carpet padding, building and other materials.

 Central and South America

  • Very large used clothing market in most countries
  • Imports of used clothing mostly come from the United States
  • Cotton wipers made from used clothing are exported back to the United States

Europe

  • Generates 1.5-2 million tons of used clothing annually
  • Large used clothing sorting centers located in Western and Eastern Europe
  • 10-12% used clothing (only those top quality) sold in local secondhand shops

Africa

  • One of the largest used clothing markets in the world
  • 80% of population wear secondhand clothes
  • Most used clothing imported from the United States, Europe, India and Pakistan

East Asia

  • Most used clothing is collected in Japan, South Korea and Taiwan
  • Countries in the region also import used clothing from the United States, Europe, India and Pakistan
  • Some large used clothing sorting centers are located in Malaysia and Philippines.

India and Pakistan

  • Residual used clothing are imported and sorted by grading companies
  • Wearable used clothing is extracted from “mixed rags” and sold locally or shipped to Africa
  • Recycled yarns are used to make new sweaters
  • Cotton wipers made from used clothing are exported to the United States

Australia

  • Used clothing is collected and sold through local shops and exported

Source: Planet Aid (http://www.planetaid.org); UNComtrade (2015)

EU Commission: Skills for Jobs in the EU Textile and Clothing Industry to Evolve

In a recent analysis report, the EU Commission foresees that skills needed by jobs in the EU textile and clothing industry will continue to evolve from 2013 to 2025. Specifically, the report argues that:

First, employment in the EU textile and clothing sector is forecast to decline by 13.4% from 2.5 million in 2013 to 2.1million in 2025. Even with shrinking employment levels, because of the need to replace nearly 1 million workers forecast to retire or leave the sector, about 611,000 job openings are anticipated from 2013 to 2025.

Second, employment in the EU textile and clothing sector is no just declined, but also evolved. From 2013 to 2025, demand for “crafted and related occupations” as well as “plant and machine operators and assemblers” will decline 34% and 13% respectively, whereas job openings for “technician and associated professional occupations” are estimated to grow at a modest rate. Among the estimated 611,000 job openings, 93% will require high or medium level qualifications.

Third, in terms of specific skills needed by the EU textile and clothing sector based on where the sector might progress towards 2020:

1) Technical production competencies will remain central to recruitment with increased focus on the demand for versatile staffs that can operate across different workstations.

2) Supply chain management, business, sales and marketing skills (including the skills in international trade) are growing in importance. For many EU textile and clothing companies, “trade has taken place of production”.

3) The EU textile and clothing industry is further expecting skills on technology, innovation and sustainability. Leading technology-led areas include mass customization, 3D body measurement, advanced CAD and eCommerce technologies, internet infrastructures for custom-tailored clothing and business-to-consumer eCommerce among retailers.

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Outlook of the U.S. Textile Industry in 2013

The latest industry outlook proposed by the Textile World argues that in 2013 the U.S. textile industry will improve industry strategy and planning in the following areas:

  • increased management emphasis in such areas as sourcing, inventory control
  • use of more flexible and efficient machinery and equipment
  • new and upgraded consumer products,
  • more ecologically friendly offerings
  • more Made-in-USA labels

 Don’t misunderstand/misinterpret these terms. The proposed strategies actually tell us:

1. the U.S. textile industry will become even more capitalized in production (as the result of “using more flexible and efficient machinery and equipment”).

2. the success of the U.S. textile industry relies on import (that’s why “management of sourcing” is suggested to be emphasized), despite the intension to promote “made in USA” label which has more to do with the current “rules of origin” defining the nationality of the products.

3. the softgoods industry (textile, apparel and related retailing) is a highly buyer-driven industry. Even textile mills have realized the importance of understanding and directly reaching the consumers.

4. sustainability is a major factor driving technical reform and upgrading in the textile industry. Other than the environmental concerns, there is another strategy behind the efforts: when the U.S. textile industry is fully ready to “be able to produce in a sustainable way”, it will ask for legislation support to require “everybody”(including imported products) to meet the same environmental standards(professionally, we call it “technical barriers of trade”). Developing countries can compete on price, but definitely cannot compete on technology and capital which are the basis of achieving “sustainability”.  Bu then, you will see sustainability becomes a real game changer.     

 Another relevant forecast made by the article “But holding these costs down through efficiency gains can also have a negative impact —namely, a smaller industry workforce. In the textile sector, for instance, squeezed by productivity gains, overall employment should drop from 232,000 in 2012 to near 209,000 by 2015.” As we menioned in the class, technology kills jobs too, although new types of jobs will be created at the same time–but with totally different skill requirements.