the Multi Fibre Agreement MFA ceased to exist on 1 January 2005 resulting in

The multi fibre agreement mfa ceased to exist on 1

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the Multi-Fibre Agreement (MFA) ceased to exist on 1 January 2005, resulting in fears by developed countries that their apparel industry would suffer further from low-wage competition (they did) in Asia and especially China. Retailers meanwhile relished the opportunity of buying garments more cheaply overseas (Curran, 2008). GATT was replaced by the World Trade Organization (WTO) and, whilst special arrangements still exist between countries (preferential trade agreements), the general trend has been towards freer trade in apparel. Textiles and apparel trade through the MFA had been designed to somewhat protect high-wage economies from losing all of their jobs in these sectors whilst stimulating, in a managed way, offshore production that could be beneficial to NICs (Abernathy et al ., 2006). Through the use of quotas and tariffs, imports from low- wage countries were restricted but not so much as to stifle manufacturing initiatives in such regions. With the phasing out of the MFA on 1 January 2005, and despite the US and EU negotiating new import quotas, China became the principal beneficiary. It went from being responsible for 4 per cent of world clothing exports in 1980 to 25 per cent today. Mexico saw an initial spurt in clothing exports following the intro- duction of NAFTA but by 2001 production had shifted from Mexico to Asia, particularly China and Bangladesh but also Cambodia and Vietnam — all of whom have increased their market share. Bangladesh’s $20 billion garment industry employs an estimated 4 million workers in 4500 factories and is second only to China for apparel exports; Vietnam exports about $13 billion of clothes and employs 1.5 million workers; and Cambodia employs about 615,000 workers, with approximately $5 bil- lion of exports (Banjo & Al-Mahmood, 2013). Other NICs have sought opportunities to exploit the new trade regimes but channel integration has been superior in the aforementioned countries, allowing them to leverage their previous experience in this sector. The concentrated purchasing power of large retailers in most advanced economies was initially suitable for standardized, long production runs. However, with greater
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252 IAN MALCOLM TAPLIN market differentiation and segmentation, frequent fashion changes mean smaller production runs and pressure to reduce time to market for manufacturers. Cost and quality remain important but expediting orders in a timely fashion is also crucial. Western retailers who had outsourced production to NICs now demanded a transfor- mation in what goods were to be delivered, how fast this could be achieved, and which location maximized the benefits of bilateral trade agreements (Tokatli & Kiztlg ű n, 2010). Two factors were important in this rationalization process. First, as retailers sourced production overseas in the late 1990s, the complexity of sorting through the various potential sites increased. Increasingly, they used Chinese trading and logistics companies to coordinate design and locate material suppliers and manufacturing sites. Such companies have been innovative in supply chain man-
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