FASH455 Video Discussion: Textiles, Trade & National Security: A Conversation with Parkdale Mills COO Davis Warlick

4 thoughts on “FASH455 Video Discussion: Textiles, Trade & National Security: A Conversation with Parkdale Mills COO Davis Warlick”

1. 1. CAFTA-DR and USMCA help shape the Western Hemisphere textile and apparel supply chain in many sectors. First, Warlick explains that under CAFTA, the yarn forward rule requires that the yarn used in a garment must be spun or produced within the free-trade region to qualify for duty-free access. Therefore, this creates binding constraints that force regional production dependency. Providing duty-free access conditional on the rules being met, which motivates investment within the Western Hemisphere.

   2. Based on the video, there are plenty of opportunities for textile and apparel near-shoring or re-shoring in the Western Hemisphere. The speaker highlights that near-shoring allows brands to shorten lead times, reduce shipping costs, and minimize risks of geopolitical tensions. But, the bottlenecks are infrastructure and capacity, many Central American countries lack the advanced facilities. Specifically, they lack of more advanced technologies and the space to be able to support large-scale production. So, this makes it more difficult for brands to shift away from using Asia.

   3. The speaker’s argument for a sectoral trade policy for textiles and apparel is convincing because this industry has specific needs that “free trade” cannot address. As explained in the video, the yarn-forward rule under CAFTA-DR ensures that key production steps happen within the region, keeping jobs and investment in the Western Hemisphere. Specifically, Parkdale Mills uses U.S. cotton that is spun into yarn domestically and then sent to Central America for garment production, creating a balanced regional supply chain. On the other hand, broad free trade would allow low-cost imports from countries like China to flood the market. This would lead to hurting local producers. A targeted trade policy focused on strengthening the textile sector can promote fair competition, and sustainable growth across the Americas.

   Abby Loth

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   1. Good point. To add to your answer to question #2, at a recent industry conference, I was asked about the status of the textile and apparel co-production chain in the Western Hemisphere. My observation is that this chain exists and is fairly strong, but it is limited to only a few basic items like T-shirts. To expand the co-production chain to other products, the region needs fresh new investment. However, such investment won’t happen unless there are enough financial incentives—such as the rising US apparel sourcing from the region, which would boost demand for more textile raw materials. So far this year, affected by higher tariffs, clothing demand has decreased, leading to a decline in US apparel imports from the Western Hemisphere.

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2. 1. CAFTA-DR and USMCA help shape the Western Hemisphere textile and apparel supply chain by providing a level playing field for the U.S. through the free trade agreements. These agreements allow the U.S. to trade with other countries involved in CAFTA-DR and USMCA that hold the same values without having to pay duties for the products being imported and exported. This allows for more fair trade and the rules of origin encourage these countries to trade amongst one another. An example given in the video is how the U.S. can convert cotton into yarn, export it to Honduras where it is transformed into socks and t-shirts, and then it can be imported back into the United States. This creates more circular trade. 
   2. The main opportunities for textile and apparel nearshoring or reshoring in the Western Hemisphere come from investing into the countries involved in CAFTA-DR and USMCA. This investment will help them grow so that they can create more complex products. This will not only benefit those countries, but it will also benefit the U.S. because they will be able to import complex garments such as outerwear and work uniforms duty-free. A bottleneck that could hinder this from occurring is the high costs associated with production in the Western Hemisphere. However, the cost difference has significantly lowered since the tariffs that have taken effect in China. 
   3. A sectoral trade policy for textiles and apparel rather than broad “free trade” could allow countries to strategically trade amongst one another in a way that benefits all of them. Having these “yarn forward” and “fiber forward” rules of origin promote production and trade within the countries involved in the agreements where they will benefit in the form of duty-free imports and exports. Sectoral trade amongst countries is more beneficial in some ways due to this idea that everyone is benefitting, rather than trading with an outside country, like China, that the U.S. mainly imports to rather than exports to. This creates an imbalance in trade that does not necessarily always benefit the United States.

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3. 1. Both agreements create a supply chain that is basically “built” to work within the region. One example is the yarn-forward rule, which encourages U.S. mills to supply yarn that is then turned into fabric and sewn into garments in Central America or Mexico. The speaker showed how a T-shirt sold in the U.S. can start as U.S. yarn, get knit and sewn in Honduras, and then return duty-free. Another example was how USMCA keeps Mexico closely tied to the U.S. apparel industry by strengthening regional production standards and keeping investment in the hemisphere rather than relying only on Asian factories. Together, these agreements help lock in a loop where each country plays a specific role.
   2. A major opportunity is speed. Producing closer to the U.S. shortens lead times, making it easier for brands to respond to fast-moving trends without carrying huge inventories. The speaker also mentioned that regional partnerships allow brands to build longer-term vendor relationships compared to the constant switching that happens in Asia. But the bottlenecks are still significant. One is the lack of synthetic fabric capacity; Central America can handle basics like cotton knits, but not the performance or novelty fabrics many brands need. Another bottleneck is cost. Factories in the hemisphere operate at higher labor and production costs, which makes it hard to compete with Asian suppliers who already have economies of scale.
   3. The speaker argued that textiles and apparel need a policy strategy that’s tailored to the industry, not a broad free-trade approach, and I agree. The apparel supply chain is extremely specialized and relies on rules like yarn-forward to function. For example, without yarn-forward, Central American factories would source cheaper Asian fabric, and the entire purpose of CAFTA-DR, to support regional integration, would fall apart. Another point he made was that apparel is too sensitive to global price fluctuations to survive under completely open trade. A sectoral policy ensures that the U.S. can maintain yarn and textile production, which is impossible to protect under broad, one-size-fits-all trade rules.

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