Effects of global sourcing on textiles and apparel

Abstract

Purpose -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). Design/methodology/approach -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. Findings -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. Originality/value -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.

Chapter 5 Online Reporting of Sustainability: A Study of Global Clothing Suppliers

“…Apparent motivations for multinational companies sourcing products from a developing country such as Bangladesh include that products can be sourced at relatively low prices. In the quest of the cheapest price, many multinational companies have been observed to have shifted production location to developing countries (Custers, 1997;Kabeer & Mahmud, 2004;Wilkins, 2000), and as a result clothing manufacturing in many developed countries has almost disappeared (Shelton & Wachter, 2005). Multinational companies headquartered within developed countries have moved their production to low-wage developing countries such as Bangladesh, Vietnam, Thailand, Indonesia, India, China and Cambodia among others, typically outsourcing their products to suppliers located in these countries (Rahman, 2004;Wilkins, 2000;World Bank, 2007;WTO, 2004).…”

Matching Sourcing Destination with Fashion Brands' Business Model: Comparative Advantages of Bangladesh and Vietnam Apparel Industries

“…The apparel industry is a buyer-driven value chain, characterized by its labor-intensive nature and presence of large retailers and brands that play a pivotal role in specifying product requirements for a specific market (Gereffi & Frederick, 2010). Global sourcing is a crucial function for buyer-driven value chains (Gereffi & Memedovic, 2003) and is motivated by the need to reduce operational costs and increasing business flexibility to respond quickly to changing markets (Shelton & Wachter, 2005).…”

Social Compliance Accounting

“…While globalisation has stimulated growth for MNCs that source products from other countries (including many developing nations), production in many sectors in the developed nations has significantly declined. For example, within the garment/clothing sector, while the global expansion of the garment production network has greatly increased over the last 15 years, garment manufacturing in the USA has almost disappeared (World Bank 2007;WTO 2004;Shelton and Wachter 2005). Many believe that corporations (predominantly US corporations) mostly source their products from suppliers located in Asian and African countries (World Bank 2007;WTO 2004;Rahman 2004;Wilkins 2000) in a persistent pursuit for the cheapest production inputs possible (Kabeer and Mahmud 2004;Wilkins 2000;Custers 1997).…”