EU Textile and Apparel Industry and the Strategic Importance of Trade—Discussion Questions from FASH455

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EU textile and apparel industry

#1 What lessons can the US textile and apparel industry learn from its counterpart in EU?

#2 With the EU as the leading textile and apparel producer of the world with abundant technology innovation and a reputation for quality (as shown by Hugo Boss’s statement), why do you think US companies source more from Asia instead of EU?

#3 Why do you think the intra-region textile and apparel trade in EU can stay stable despite the competition from Asia, whereas the Western-Hemisphere supply chain is feeling more pressures?

The strategic importance of trade

#4 How do you define ” the level playing field”? Is the concept a subjective judgment or can be measured fairly? Why or why not do you agree that when the “playing field” is level, the United States will be able to compete in the global marketplace and win?

#5 In the article The strategic logic of trade, the article states that the United States is pressing other countries to address forced labor and child labor and to maintain acceptable working conditions. Why or why not do you think trade policy should and can address labor issues effectively?

#6  What is the value of being a member of the World Trade Organization (WTO) to the United States? Do the most-favored-nation (MFN) and national treatment principles serve the interests of the United States today?

#7 With trade being a beneficial component to aiding developing countries economically, should the U.S. propose more trade deals with developing countries to help promote their development? Or, would it be more beneficial for the U.S. to focus on trade deals with already developed economies?

(Please feel free to join our online discussion. In your comment, please mention the question #)

Author: Sheng Lu

Professor @ University of Delaware

19 thoughts on “EU Textile and Apparel Industry and the Strategic Importance of Trade—Discussion Questions from FASH455”

  1. #5 In the article The strategic logic of trade, the article states that the United States is pressing other countries to address forced labor and child labor and to maintain acceptable working conditions. Why or why not do you think trade policy should and can address labor issues effectively?

    I personally believe trade policy should and can address labor issues effectively for numerous reasons. For one thing, when a trade policy is agreed upon and a country becomes a member, they are required to abide by that policies regulations. That being said, bringing labor issues into a policy and creating set guidelines as to what is and isn’t okay, more countries will take the initiative and make sure all working conditions are up to par.

    1. Interested in your views about this article: https://www.cato.org/publications/economic-development-bulletin/case-against-child-labor-prohibitions
      Also, many developing countries argued that labor standards in trade agreements are a form of protectionism in disguise, favoring U.S. workers over those in poorer countries. For example, behind the relatively low wage actually is developing countries’ comparative advantage in making labor intensive goods. Any response?

  2. #5 In the article The strategic logic of trade, the article states that the United States is pressing other countries to address forced labor and child labor and to maintain acceptable working conditions. Why or why not do you think trade policy should and can address labor issues effectively?

    I completely agree with gferrara26 in the above comment made about “requiring to abide” to policies when a trade agreement is formed between two countries. I think every country is aware the degree of the labor issues they may have within their own countries, as well as the countries they trade with. If there is trade, awareness about conditions in which your imports are coming from is key because you have to understand the risk that that can indirectly bring, ie. disasters, injury, child labor, etc. There can always be a backlash if a country or its trading parters turn heads to such a matter. I think the U.S. has gotten into sticky situations in the past with turning their head to these kind of issues so in order to appear more reliable and aware, they are pressing their trading partners to address acceptable working conditions. I think this practice will also appeal more to trading partners within the EU to show they are forward thinking and have set expectations. It seems like the EU is very developed and evolved with their trade negotiations since they are so developed themselves.

  3. Great comments! Two follow-up questions: is there a way to define “acceptable working conditions” among countries given their various stage of economic development? Second, even without including the discussion on child labor, the negotiation of free trade agreement is already extremely complicated (for example https://shenglufashion.files.wordpress.com/2015/10/untitled2.jpg). Also, issues like child labor seems to be more related to a country’s domestic policy. So why not we address the labor issue through other channels, rather than having to link the talk with trade?

  4. #5: Labor issues being addressed through trade policy is very crucial in the workers rights movement. I feel as if western companies are addressing the issue, but only through word or promises. I think being able to incorporate labor issues into trade policies will help to ensure that these policies are being enforced in all factory working environments. I agree with the comments above that it will bring more awareness and countries will be able to more clearly see the guidelines of right and wrong in working conditions. I think it is the position of developed countries to take a stand to enhance the lives and working conditions of the worker’s who are producing products for us.

  5. #2 With the EU as the leading textile and apparel producer of the world with abundant technology innovation and a reputation for quality (as shown by Hugo Boss’s statement), why do you think US companies source more from Asia instead of EU?

    I think that US companies source more from Asia instead of the EU because I feel that they are more interested in low cost and short lead times, and that is what the Asian manufacturers offer. Quality seems to be more of an afterthought for thee US companies and isn’t as important to them as the low costs and short lead times.

    #3 Why do you think the intra-region textile and apparel trade in EU can stay stable despite the competition from Asia, whereas the Western-Hemisphere supply chain is feeling more pressures?

    I think the intra-region textile and apparel trade in EU can stay stable despite the competition from Asia because they do have the upper hand in producing high quality products and have abundant technology innovation, along with a great reputation. No other region is known for how their extremely well-made products, which is where the EU has its competitive advantage. For companies looking for luxurious products with high attention to detail, the EU is where they turn for sourcing.

  6. #2 With the EU as the leading textile and apparel producer of the world with abundant technology innovation and a reputation for quality (as shown by Hugo Boss’s statement), why do you think US companies source more from Asia instead of EU?

    I think that US companies source more from Asia instead of the EU due to the low prices that can be found there. US companies are looking to spend less to produce their garments in order to make a large profit. These low prices are mainly found in factories located in China and other Asian countries. Factories here can produce large amounts of products in a shorter period of time at an extremely low cost.

  7. #5. I do agree with all the comments above regarding the policies with child labor. I think that many countries always talk about this issue and nothing is really ever done. This issue is an important one that needs to see change within it and I think by developing a policy countries will abide to it and it will create an impact in the world. I think if this law is incorporated into a trade policy it will be almost stronger because these trade policies are strictly followed by countries.

    1. good point! A follow-up question: like you said that ” law is incorporated into a trade policy it will be almost stronger because these trade policies are strictly followed by countries.” then, will it make it even more difficult to reach trade agreements? Also, should national sovereignty be a concern? see this article: https://www.washingtonpost.com/news/wonk/wp/2017/03/01/trump-may-ignore-wto-in-major-shift-of-u-s-trade-policy/?utm_term=.0b3cf3329864

      interested in your thoughts…

  8. #4 I would define a level playing field as all countries having a similar economic and political climate. Additionally countries on a level playing field would have similar populations with equal skill levels. I do not think it is realistic for many countries to be on a “level playing field”. In fact, I do believe this concept is completely subjective and there is no accurate way to fairly measure this. Every country is set up differently both geographically and socially, and it is not fair to compare two countries without regard for factors such as how many resources they have or the government that is in power. I think the US is able to be so competitive in field such as technology because we have an advantage in terms of a democratic government as well as an abundant population with a high level of education. However, countries like China have an advantage in manufacturing due to their large population of people skilled in that area as well as abundant land to build factories. Each country can bring something different to the table and it is unrealistic to compare them as if they are the same.

  9. I define the level of playing field as a balance between developed countries and underdeveloped countries. The level playing field would also create equal opportunities for growth and prosperity almost all of the different countries. I think this concept can be measured subjectively and can be measured quantitatively because numbers and statistics about the countries could back up the level playing field, but also judgments and theories about certain countries and their power could also support the idea of a level playing field. I do not think that a level playing field is realistic or attainable because at the end of the day countries like the United States have much more capital and have access to many more resources than countries who are undeveloped. This is what causes an unbalanced playing field, and I do not think this is likely to change.

  10. Question #7:
    I believe it would be more beneficial for the U.S. to engage in trade with less developed countries as opposed to already developed nations. Not only would this strategy aid these developing nations’ economic growth, it would also benefit the U.S. through various factors such as the growing per capita GDP of these nations, the greater market opportunity for products they have not yet been exposed to, taking advantage of our stance as a capital intensive country while these others are more labor intensive, and finally the long-term trade position they would have in the slow and progressive development of a newer economy.

  11. Question #2:
    In my mind, the EU and the US are very similar. Both have the ability to produce textiles and make quality apparel, but the US doesnt thrive in this aspect or want to because of the cost saving benefits. It would be more costly to employ workers from developed nations like the EU and the US, than those where labor can be very cheap and plentiful. Because of this US companies are willing to sacrifice quality goods for cheap labor.

  12. Responding to question #4, leveling the playing field, in my opinion is a subjective judgement, because in the context of international trade there will always be winners and losers. If you raise barriers to trade in more developing countries and lower barriers to trade in more developed countries, that could be considered leveling the playing field by some but by others, especially those players in the developed countries, they would consider themselves losing while developing countries win. So, in that sense, the United States would not be able to compete in the global marketplace and win. As one of the most developed countries in the world this would likely mean that trade barriers would be put up against them while their trade barriers would be lowered for least developed countries.

  13. #7
    I think it would be beneficial for the US to propose more trade deals with developing countries. This could help both the US and the country. The US may be able to get a better deal with a developing country rather than a developed country. The US would then be able to save some of their capital. That developing country will also be able to slowly build their economy. But if the US does make trade policies with developing countries, they need to make sure that the country has the means to trade ethically.

  14. #4
    I would define “level the playing field” as making something fair and even for all of those involved, in other words no one person had an advantage over another everything is equal. I think in terms of trade the concept is rather a subjective judgment than something that can be measured fairly. For example, trying to make the playing field even for a country like the United States to a lower developed country like Poland would not be advantageous for either country involved since they are producing different things as well as different level of quality if they are making the same item. In terms of making the “playing field” level for the United States in a global marketplace I think the U.S would be able to “win” but only in such cases where technology is involved, or in textile production.

  15. #4: I would define “the level playing field” as equal opportunity for growth and development between all countries (players), as well as equal opportunity for fair competition. I personally believe there is no quantitative data that would accurately measure the fairness between all countries however, certain qualities and statistics could support arguments as to why one country has a stronger advantage than the other. At the current state of the world and global economies, I don’t think until every country is fully developed that a level playing field exists- at least not a global scale. Smaller countries that are still developing in technology and even access to healthcare, education, etc, are not on the same playing field as a country such as the United States. It wouldn’t be fair to compare them because size alone makes them so different. For the United States to be level against a country such as China, who economically is very similar, our competitive focus would need to shift from textile manufacturing to apparel manufacturing. Thus, I don’t honestly think the United States would “win” in this case because the labor force would not support this transition. I also don’t think the United States would necessarily loose either. The idea, in my opinion, of competitive advantage doesn’t support the idea of leveling the playing field. This would take away the strengths of each country that globalization has facilitated.

  16. #2 Unfortunately, I would say all most companies have in mind is profit;how can we produce the most profit? Efficiency comes after that, and then quality. So, in regards to the quality and technological innovation that the EU could provide as an apparel producer, they would be a much more costly and slower option. Asia has mastered a cost efficient process for apparel manufacturers and though they may not provide the best quality or the most innovative technology, they have workers that get the job done in a way that no one else can beat. As long as the costs are the cheapest and the process is the fastest, US companies will always continue to use Asia to source their apparel.

  17. Personally, I believe it would be more beneficial to pursue trade deals with developing countries. Making trade deals with developing countries can open the U.S. up to new resources they might not have been exposed to before. This is also helping that country build their economy and improving the lives of those who live there. This will in turn create a genuine relationship with that country because we are showing that we care about the future of their country and the people in it. Trading with developing countries can also mean that the products will be cheaper which will benefit consumers and the U.S. economy. However, in an age of fast fashion, trading with developing countries can become unethical when it comes to wages, labor hours, and factory working conditions because manufacturers are trying to produce as much as possible. The U.S. needs to spend time making sure that factories and factory workers are properly taken care of when trading with developing countries.

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