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Participation in the Global Apparel Network
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Morley, David - The Cambridge introduction to creative writing (2011) - libgen.li
| Participation in the Global Apparel Network The apparel industry is another sector in which production is increasingly distributed across low-income countries by buyers searching for cheaper labor. The global trend is one of continuous differentiation and externalization of traditional functions by buyers. It began with a shift in production of standard, low-value garments to suppliers and was followed by a shift in production of higher-value apparel. The experience of countries that have made this transition, such as Korea, Taiwan (China, and Hong Kong (China, suggests the importance of organizational learning. 44 As these countries upgraded and outsourced production to suppliers with cheaper labor, they themselves moved from being original equipment manufacturers (OEM) to serving as original brand name manufacturers of garments. Acquiring the capabilities needed for transition was achieved by firms that integrated into the buyer-driven networks of developed countries, not by those for which participation did not extend beyond simple assembly. 45 As a result of Africa’s preferential access to foreign markets, a significant amount of such production was moved from newly industrialized countries in Asia to Africa. FDI from Asia, induced by the quota system of the Multifibre Arrangement (MFA) and the US. Africa Growth and Opportunity Act (AGOA), enabled rapid growth of the African apparel sector. One of the beneficiaries was Lesotho, which, thanks to its cheap labor costs, was an ideal host for Asian capital seeking to avoid the textile quotas con- 06-Chap6:06-Chap6 10/9/06 2:39 PM Page 336 INVESTMENT - TRADE LINKAGES IN AFRICAN - ASIAN COMMERCE 337 straining exports from their home country. Investors from Taiwan (China) and China helped to make the textiles industry in Lesotho the single largest employer, accounting for 90 percent of export earnings. 46 Other African producers also benefited from AGOA. In 2004, Sub-Saharan African exports of apparel to the United States exceeded $1.5 billion. 47 The expiration of the MFA on January 1, 2005, ushered in anew apparel trade environment, however. On the one hand it unleashed anew wave of Chinese sales on the world market. The ILO, in its analysis of the post-MFA environment, reported that textiles and apparel exports under the AGOA fell to $270 million in the first quarter of 2005 versus $361 million a year earlier. The 25 percent reduction contrasts with a 19 percent increase in China’s exports for the same period. 48 On the other hand, following the expiration of the MFA, many companies that had invested in Africa to take advantage of the quota began moving back to China in search of cheaper labor. 49 Between January and March 2005, Kenya exported $60 million of textile and clothing products to the United States, which was 13 percent or $9 million less than the exports during the same period in But, important to note, the stepped-up competition African apparel makers face today is not just an Asian phenomenon: indeed, just as fierce competition comes from other Southern markets, such as Central and Latin America figure 6.8 shows a value-chain comparison between Kenya’s and Honduras apparel sectors. FIGURE 6.8 Download 5.17 Mb. Share with your friends:
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