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Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World

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  • Cornelia Staritz
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    Abstract

    The clothing sector has traditionally been a gateway to export diversification and industrial development for low-income countries (LICs) but recent developments may condition this role. In most developed and middle-income countries, the clothing sector was central in the industrialization process. Recently, however, the environment for global clothing trade has changed significantly, driven by the rise of organizational buyers and their global sourcing strategies, the phase-out of the Multi-Fibre Arrangement (MFA) at the end of 2004, and the global economic crisis in 2008-09. Changes in global supply and demand structures have increased competition between LIC exporters but also offer new opportunities in fast-growing emerging markets. The second half of the twentieth century was characterized by a rising demand for clothing and the replacement of developed countries' domestic production by imports from developing countries. Today, however, demand has stagnated and import penetration levels are close to 100 percent in most developed countries. Thus, the growth of clothing exports from a few developing countries largely comes at the expense of clothing producers in other developing countries. The heightened competition between developing countries has been reinforced by overcapacity in the global clothing industry since the MFA phase-out and has been accelerated by the global economic crisis. However, changes in demand structures post-crisis may lead to new opportunities. While import demand for clothing in the Unites States, the European Union (EU), and Japan might stagnate, demand will increase in fast-growing emerging markets.

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    Bibliographic Info

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    This book is provided by The World Bank in its series World Bank Publications with number 2547 and published in 2011.

    ISBN: 978-0-8213-8636-1
    Handle: RePEc:wbk:wbpubs:2547

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    Postal: 1818 H Street, N.W., Washington, DC 20433
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    Related research

    Keywords: International Economics and Trade - Free Trade Textiles Apparel and Leather Industry Finance and Financial Sector Development - Debt Markets Macroeconomics and Economic Growth - Markets and Market Access Macroeconomics and Economic Growth - Economic Theory & Research Industry;

    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Bob Begg & John Pickles & Adrian Smith, 2003. "Cutting it: European integration, trade regimes, and the reconfiguration of East - Central European apparel production," Environment and Planning A, Pion Ltd, London, vol. 35(12), pages 2191-2207, December.
    2. Brenton, Paul & Hoppe, Mombert, 2007. "Clothing and export diversification : still a route to growth for low-income countries ?," Policy Research Working Paper Series 4343, The World Bank.
    3. Palpacuer, Florence & Gibbon, Peter & Thomsen, Lotte, 2005. "New Challenges for Developing Country Suppliers in Global Clothing Chains: A Comparative European Perspective," World Development, Elsevier, Elsevier, vol. 33(3), pages 409-430, March.
    4. Kaplinsky, Raphael & Messner, Dirk, 2008. "Introduction: The Impact of Asian Drivers on the Developing World," World Development, Elsevier, Elsevier, vol. 36(2), pages 197-209, February.
    5. Ahmed, Nazneen & Peerlings, Jack H.M., 2009. "Addressing Workers' Rights in the Textile and Apparel Industries: Consequences for the Bangladesh Economy," World Development, Elsevier, Elsevier, vol. 37(3), pages 661-675, March.
    6. Jörg Mayer & Arunas Butkevicius & Ali Kadri, 2002. "Dynamic Products In World Exports," UNCTAD Discussion Papers, United Nations Conference on Trade and Development 159, United Nations Conference on Trade and Development.
    7. Yamagata, Tatsufumi, 2006. "The Garment Industry in Cambodia: Its Role in Poverty Reduction through Export-Oriented Development," IDE Discussion Papers, Institute of Developing Economies, Japan External Trade Organization(JETRO) 62, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    8. Milberg, William & Winkler, Deborah, 2010. "Trade crisis and recovery : restructuring of global value chains," Policy Research Working Paper Series 5294, The World Bank.
    9. Sanjaya Lall, 2005. "FDI, AGOA and Manufactured Exports by a Landlocked, Least Developed African Economy: Lesotho," Journal of Development Studies, Taylor & Francis Journals, vol. 41(6), pages 998-1022.
    10. Frederick H Abernathy & Anthony Volpe & David Weil, 2006. "The future of the apparel and textile industries: prospects and choices for public and private actors," Environment and Planning A, Pion Ltd, London, vol. 38(12), pages 2207-2232, December.
    11. Kaplinsky, Raphael & Morris, Mike, 2008. "Do the Asian Drivers Undermine Export-oriented Industrialization in SSA," World Development, Elsevier, Elsevier, vol. 36(2), pages 254-273, February.
    12. Tewari Meenu, 2006. "Is Price and Cost Competitiveness Enough for Apparel Firms to Gain Market Share in the World after Quotas? A Review," Global Economy Journal, De Gruyter, De Gruyter, vol. 6(4), pages 1-48, November.
    13. Meenu Tewari, 2008. "Deepening Intraregional Trade and Investment in South Asia - The Case of the Textiles and Clothing Industry," Trade Working Papers 22265, East Asian Bureau of Economic Research.
    14. World Bank, 2007. "World Development Indicators 2007," World Bank Publications, The World Bank, number 8150, October.
    15. Gibbon, Peter, 2003. "The African Growth and Opportunity Act and the Global Commodity Chain for Clothing," World Development, Elsevier, Elsevier, vol. 31(11), pages 1809-1827, November.
    16. Phelps, Nicholas A. & Stillwell, John C.H. & Wanjiru, Roseline, 2009. "Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry," World Development, Elsevier, Elsevier, vol. 37(2), pages 314-325, February.
    17. Jennifer Bair, 2006. "Regional trade and production blocs in a global industry: towards a comparative framework for research," Environment and Planning A, Pion Ltd, London, vol. 38(12), pages 2233-2252, December.
    18. Meenu Tewari, 2008. "Deepening Intraregional Trade and Investment in South Asia: The Case of the Textiles and Clothing Industry," Indian Council for Research on International Economic Relations, New Delhi Working Papers, Indian Council for Research on International Economic Relations, New Delhi, India 213, Indian Council for Research on International Economic Relations, New Delhi, India.
    19. Kaoru Natsuda & Kenta Goto & John Thoburn, 2010. "Challenges to the Cambodian Garment Industry in the Global Garment Value Chain," The European Journal of Development Research, Palgrave Macmillan, Palgrave Macmillan, vol. 22(4), pages 469-493, September.
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    Cited by:
    1. Staritz, Cornelia & Morris, Mike, 2012. "Local embeddedness, upgrading, and skill development: Global value chains and foreign direct investment in Lesotho's apparel industry," Working Papers 32, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    2. Morris, Mike & Staritz, Cornelia, 2014. "Industrialization Trajectories in Madagascar’s Export Apparel Industry: Ownership, Embeddedness, Markets, and Upgrading," World Development, Elsevier, Elsevier, vol. 56(C), pages 243-257.
    3. Thomas Bernhardt, 2013. "Developing countries in the global apparel value chain: a tale of upgrading and downgrading experiences," Brooks World Poverty Institute Working Paper Series ctg-2013-22, BWPI, The University of Manchester.
    4. John Pickles, 2012. "South African horticulture: opportunities and challenges for economic and social upgrading in value chains," Brooks World Poverty Institute Working Paper Series ctg-2012-13, BWPI, The University of Manchester.
    5. Dennis Arnold, 2013. "Workers’ agency and re-working power relations in Cambodia’s garment industry," Brooks World Poverty Institute Working Paper Series ctg-2013-24, BWPI, The University of Manchester.
    6. Plank, Leonhard & Rossi, Arianna & Staritz, Cornelia, 2012. "Workers and social upgrading in "fast fashion": The case of the apparel industry in Morocco and Romania," Working Papers 33, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
    7. Cornelia Staritz & Mike Morris, 2013. "Local embeddedness and economic and social upgrading in Madagascar’s export apparel industry," Brooks World Poverty Institute Working Paper Series ctg-2013-21, BWPI, The University of Manchester.
    8. Savchenko, Yevgeniya & Acevedo, Gladys Lopez, 2012. "Female wages in the apparel industry post-MFA : the cases of Cambodia and Sri Lanka," Policy Research Working Paper Series 6061, The World Bank.

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