The Tangled Web of Textiles
So I think I’ve blogged about the textile industry before. Just in case you haven’t kept up, though, here’s a review:
-Ten years and a half years ago an agreement was made between the nations of the world that in ten years, quotas on textiles would be lifted.
-In January, that agreement went into affect. China, who has an enourmous labour force and the lowest labour costs in the world, almost immediately began to dominate the market. India is still doing all right, at number two.
-Textile labour unions around the world lifted their querulous voices in righteous and victimized indignation, claiming everything from dumping to third degree murder.
-The EU promptly went about trying to implement new protectionist policies. Cina agreed, then promptly broke their promises. This did not improve their popularity with the EU.
-Th US is following the EU’s lead and attempting to put new protectionist measures in place.
OK, that brings us up to the present.
US-China begin key textile talks
US trade officials have begun vital talks with their counterparts in Beijing in an effort to cap the growing level of China’s clothing exports.
The negotiations are the latest attempt by the two countries to reach an agreement on how to control Chinese sales to the US.
Imports have surged since the start of the year when quotas governing worldwide textile sales were abolished.
China is currently seeking to resolve a separate textile dispute with Europe.
Beijing does not want a repeat of its trade wrangle with the European Union, which is proving increasingly embarrassing.
The dispute has left millions of goods, including trousers and bras, stranded at European ports after China breached annual quota levels introduced in June.
Jobs fear
The US government, like many European counterparts, is worried about the impact of cheap Chinese imports on its own textile industry.
US clothing manufacturers have warned Washington that thousands of jobs could be lost if restrictions are not placed on certain Chinese imports.
The Bush administration has already imposed quotas on imports of knitted shirts, cotton trousers and underwear. It is considering similar restrictions on wool trousers, dressing gowns, bras and sweaters.
Experts believe the two sides are keen to reach an agreement before the China’s President Hu Jintao begins a trip to the US next week.
The discussions are being led by David Spooner, President Bush’s chief textile negotiator and Gao Hucheng, China’s vice commerce minister.
“China hopes that the two parties will adopt a positive attitude while seeking a solution that will create a stable environment for China-US textile trade,” the Chinese commerce ministry said in a statement.
Fundamental differences
Previous attempts to create a framework for Chinese imports have failed due to fundamental differences of opinion on how to regulate sales.
US manufacturers want the government to limit annual growth in imports of 19 categories of clothing to 7.5% until 2008.
It is thought that China is looking for a higher ceiling on imports of certain items and the application of firm rules to govern textile trade.
The US commerce department said earlier this month that it would examine whether a wide-ranging textile agreement was possible before taking further steps to limit imports of individual goods.
Sales of Chinese-made clothes to the US are set to rise 60% this year from last year’s $15bn figure.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/4196602.stm
Published: 2005/08/30 11:28:29 GMT
© BBC MMV
OK, so this is well and good. Honestly, what they need to do is allocate government funding to retrain these American textile industry employees to do something that will actually bring more economic gain to the US, and keep like one or two government-subsidised US textile plants open just to keep their hand in, in case there is a third world war. The real people to worry about are in poor countries where textiles is about all they can do. What about people in Bangladesh? They have been hit extraordinarily hard by the new lifting of quotas, because they can’t compete with China. When the economy takes a down turn, people begin to blame the government. When things get as bad as they are getting in Bangladesh, they overthrow the government. The real worry here is that a religiously extreme government could take over and become a real danger to other countries. The last thing this world needs is another one of those.
Bangladesh garments aim to compete
By Roland Buerk, BBC News, Dhaka
Developing countries around the world face upheaval after the quota system governing the garment industry was finally phased out at the end of last year.
For Bangladesh the stakes are especially high - it relies on garments for more than three-quarters of its exports.
About 1.8m people, most of them women, work in garment factories.
As many as 15 million more in support industries depend on the trade for their survival.
Job worries
Shanaj Parvin Rekha used to make trousers for export.
Today she sits in her tiny shack made of corrugated iron in Dhaka’s largest slum.
She’s been embroidering a handkerchief for her new husband to keep her occupied now she’s unemployed.
Two months ago the small factory where she worked shut down, an early victim of the end of the quota system.
“I am very worried about it,” the 19-year-old said. “We are passing our days in serious hardship but still we have the hope that I will get another job.
“But if more factories shut down there is no hope.”
Shanaj Parvin Rekha used to earn just $20 a month, a pittance but enough to keep her going.
Now she has to make last for an entire week what she used to earn in a day.
New era
For decades the world’s garment trade has been governed by a system of quotas.
It limited the amount efficient countries like China could export to the big markets of the United States and Europe.
The original intention was to protect the garment industries in the West.
But the effect was to guarantee less developed countries like Bangladesh a slice of the trade.
Quotas were abolished from 1 January 2005.
Retailers are now free to buy from whatever country can make garments for the lowest price.
It could mean cheaper clothes for consumers but the pain will be felt in slums in the developing world.
‘Opportunity’
Buyers like Pelle Karlsson now have the fate of millions in their hands.
He works for H&M, a chain that has shops across Europe and the United States.
The company is now deciding which countries to keep doing business with.
“We have our price strategy; we have our quality level and also if the country can work with a good lead time,” he said.
“Based on these three factors we will select both our suppliers and the countries that can cope with these things. We still think Bangladesh is able to compete in these areas.”
H&M has moved some of its operations in Asia to Dhaka from Hong Kong in anticipation of buying more of its supplies here from now on.
But what is good news for Bangladesh will be bad news for workers in other developing countries.
Around the world the big and the efficient see the change as an opportunity.
Dreams and uncertainty
Anwar ul-Alam Chowdhury is the owner of Evince Textiles.
He has just opened a new factory in Gazipur, about an hour’s drive outside Dhaka.
It is so new parts of it are still being built by labourers who carry bricks and cement in baskets on their heads.
Wages in Bangladesh are low, around half those paid in China, giving the country a competitive edge.
“Everybody dreams, you know, so we are also dreaming,” said the owner as he walks around his new production lines.
When the factory is up to full speed it will be making 1.5m shirts a month.
“It could be good, I think. A lot of customers are positioning themselves in Bangladesh, like Tesco, like Carrefour, like H&M. So all the indications are that this will be the greatest opportunity for Bangladesh.”
But for garment workers like Shanaz Parvin Reka this is a period of uncertainty.
She’s still looking for a new job.
And it will be some time before it becomes clear whether Bangladesh will be a winner or a loser in the new global free market for garments.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/world/south_asia/4118969.stm
Published: 2005/01/06 00:42:58 GMT
© BBC MMV
Is all of this inherently interesting to a geek like me? Of course. But I think it serves to show that we need to think about other countries as much as we think of ourselves when we make big decisions.
