TextileQuotasLATimes - A WORLD UNRAVELS Clothes Will Cost...

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A WORLD UNRAVELS Clothes Will Cost Less, but Some Nations Pay Consumers gain when textile quotas end and jobs move to China and India. Poor countries lose out. By Tyler Marshall, Evelyn Iritani and Marla Dickerson Times Staff Writers January 16, 2005 As a poor nation struggling to compete in an increasingly globalized economy, Cambodia has little to offer factory owner Leon Hsu. Electricity is erratic. Traffic along the road to the port of Sihanoukville includes the occasional elephant. If a truckload of men's shirts doesn't reach the port on time, it may be days before another vessel departs for Singapore, where goods are transferred to a larger ship for the voyage to the United States. None of that much mattered over the years, because international quotas guaranteed Cambodia the chance to sell clothing and textiles to retailers in rich, developed nations. Designed to protect manufacturers in North America and Europe from foreign competition, the import quotas ended up working as a global version of Head Start, an affirmative action program for countries that had large, unskilled workforces and not much else. The last provisions of the 30-year quota system disappeared at the beginning of the month, leaving Hsu few reasons to stay in Cambodia. Beckoning him are far more efficient venues — chief among them China — with modern factories, highways and ports, prolific workers and all the fabric, thread and buttons he could want. Miss a shipping date out of southern China, and another vessel is leaving soon, often within 24 hours. And it's a direct shot to Los Angeles or Rotterdam, Netherlands. "I'll be happy to go," Hsu said. When he does, he won't be alone. The end of the quotas has triggered what trade experts
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believe could be one of the largest migrations of production in history, jeopardizing Cambodia's 220,000 apparel jobs. Hundreds of thousands more are threatened in Bangladesh, El Salvador, Lesotho and other countries that prospered under the quota system. The massive manufacturing shift will be a windfall for billions of people, bringing huge savings to consumers and accelerating the transfer of jobs to engines of low-cost production in China and India. But it could cripple economies across Latin America, Africa and Asia. Relative newcomers to the international commerce club risk losing their claim to an industry that lets them play in the big leagues. Millions of people whose jobs sewing knit shirts or jeans have meant schooling for their children or roofs over their heads could slide further into poverty. In Africa, where manufacturers supply employees with condoms and healthcare, the battle against AIDS could be weakened. Illegal immigration from Latin America to North America may rise. Efforts to improve the economic position of women in predominantly Muslim countries are threatened. The quota system "has been an extremely cost-effective method of bringing social and
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This note was uploaded on 10/12/2008 for the course ECON 1 taught by Professor Bergstrom during the Spring '07 term at UCSB.

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TextileQuotasLATimes - A WORLD UNRAVELS Clothes Will Cost...

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