Effects of global sourcing on textiles and apparel

Abstract

– 1 January 2005 sees quota elimination in textile and apparel trade. This study traces textile and apparel trade, since 1994 and analyzes how trade agreements have influenced sourcing within the North American Free Trade Agreement (NAFTA) and the world. Statistical measurements of offshore sourcing of textile and apparel are analyzed with emphasis on developments in countries within NAFTA and the World Trade Organization (WTO)., – Prior to NAFTA, the United States major textile and apparel trade involved the “far shore” countries of China, Hong Kong, Taiwan, South Korea, and the “near shore” countries of Canada and Mexico. Charting statistical measurements from the databases of the Office of Textile and Apparel, US Department of Commerce for the past decade reveals dramatic changes in sourcing locations for US firms., – Trade agreements have influenced the production, manufacturing, and sourcing of textile and apparel products. Small‐ and large‐scale restructuring of the industries of the world are required in response to the changes in trade of textiles and apparel. As a result of the Multi‐Fiber Agreement (MFA) 1974, Agreement on Textiles and Clothing (ATC) 1994, NAFTA 1994, and the transitional program of the WTO of 1995 global sourcing had re‐directed the course of US textiles and apparel trade markets to low cost offshore locations at the expense of US jobs., – This study gives insight into concerns and problems facing the US and other developed countries as jobs in many areas are transferred to low wage countries.