Developing Countries and Textiles and Apparel Trade

2005
 
Quotas that had long restrained Chinese and other large-scale producers from dominating U.S. and EU markets ended on January 1, 2005. Quotas helped many developing countries move from commodity exports into manufacturing,  but also made them dependent on textile and apparel for export earnings. Since quotas have ended their exports have been declining and factories are shedding workers as the full force of competition—especially with China—is felt. Prices are falling dramatically and buyers are placing fewer long-term orders. The uncertainty pervading the industry is having a particularly cruel impact on workers in small- and medium-sized enterprises.
In this short paper we

• Examine what has happened in textiles and apparel trade in the first quarter of 2005—in the U.S., in the EU, and in developing countries,

• Discuss how producers in developing countries can profitably retain business rather than competing solely on the basis of production costs,

• Highlight the importance of improving labor standards to boost productivity and attract investors, and

• Summarize USAID-funded activities assisting governments and textile/apparel workers in Africa, Asia, and Latin America.