- Trade in textiles has occurred for centuries, the most dramatic changes have occurred in the second half of the twentieth century. The controversial aspects of this trade began in the 1930s when Japan started selling significant amounts of its textile and apparel products in the European and U.S. markets. At the time, Japan was a low wage developing country that began its economic development by emphasizing textile and apparel production. The trouble began when the nation wanted to earn foreign exchange by selling those products outside its own market. Japan began to export a substantial amount of textile goods. Although much of Japan's industry was destroyed later in World War II, the country soon rebuilt the industry and began exporting again. By the 1950s, textile producers in the United States and Western Europe worried that Japanese producers were a threat to their businesses. A significant point was that, at that time, Japan had low wages. This meant Japanese products could be sold for less than those made in the U.S. and Europe. Beginning at that time, a series of trade policies was developed to attempt to "protect" the U.S., Canadian, and European manufacturers from competition from imports made in countries with low wages (Dickerson, 1991, 1995).
- Other less developed nations saw Japan's success in building an economy with the textile/apparel industry, particularly to export the products to more developed countries. The less developed countries had little capital or technology to start other industries and had large populations desperately in need of jobs. Many other Asian countries followed Japan's pattern. The newcomers-such as Taiwan, South Korea, Hong Kong, India, and Pakistan-also wanted to export their products to the United States and Europe. These two markets were attractive because of the large number of consumers with enough disposable income to have fairly extensive wardrobes (at least, compared to the rest of the world). Canada and Australia were the other two attractive markets.
- As this pattern continued, almost every country in the world developed at least a simple textile and apparel industry. Many nations and individuals built their dreams for a better life around the prospects of making and selling textile/apparel products in the wealthier nations. Textile and apparel firms in the more developed countries feared, however, that imports would drive them out of business. As a result, textile/apparel trade became very hostile. Complex trade policies were initiated to "manage" this sticky area of trade. Exporting and importing nations had diametrically opposing positions. The less developed countries wanted to ship their products to the more developed nations. Textile/apparel producers in the more developed countries wanted to do whatever they could to keep out the imports they saw as damaging their industry.
- As other countries set their sights on the U.S. market, domestic manufacturers began more and more to feel the impact of this competition. Until the 1970s, U.S. manufacturers had a fairly large, captive market to themselves. Consumers bought what U.S. manufacturers produced. As imports made inroads into the market, they were no longer just a threat. Imports had become serious competition, taking an increasing share of the U.S. market. Firms found it hard to compete with products made in countries where wages were a fraction of U.S. wages. Many companies went out of business when they were unable to respond to the competition. Many other firms restructured to become more efficient and better positioned to compete (Dickerson, 1991, 1995).
|
Participants