The Great Recession and Trade Protectionism: What Went Right?

A great commentary article on a recent study on trade protectionist measures by Chad Bown, a former professor from Brandeis university and a guru on trade remedy measures. It is interesting to note that the using of trade protectionist measures is much less frequent today than in the past. I agree with the reasons proposed by the article, such as the establishment of the WTO as a monitoring body, global production and emerging markets instead of developed countries becoming leading importers. On the other hand, trade protectionist measures are taking more diversified forms today and the scope has gone far beyond the traditional AD, CVD and safeguard measures. In particuar, measures that intend to promote export potentially could raise new trade disputes among leading exporters.

The full report can be downloaded from here

Comparative Advantage: The boomerang effect

Comment:

This article from the Economist echoes some recent arguments that with China’s rising wages, manufacturing jobs could move back to the developed countries. The article says that: “for some manufacturers low wage costs are becoming less important because labor represents only a small part of the overall cost of making and selling their products.”

However, such view is questionable. If labor cost only accounted for a minimum proportion of the total production cost, why would firms care about the rising labor cost?  Also, more and more products made in China are sold locally today rather than shipped back to the US or  other developed markets. Therefore, for many sectors (such as softgoods) despite the rising labor cost, leaving China is not always a workable option.

Is H&M the new home of ethical fashion?

Is “fast fashion” business model compatible with “sustainability” ? It seems fashion company never inspire consumers to lower their consumtion, post-purchase unsustainability practices is commonly see and we have flood of fashion brands claimed themselves as “eco-friendly” (Niessen, 2011).

One interesting article from the Observers about H&M’s green strategy.

To read the fulltext, click here

Fashion Forward: Zara is trying to go global

Can fast fashion go global? Does the business model which heavily rely on local supply fit for global operation? As mentioned in the article, 70% of Zara’s sale in 2001 came from the EU, although it has opened 179 new stores in Asia in 2011, 156 of them in China.

To do business in emerging markets may incur many unique barriers and challenges. For example, the article reported that China’s consumer watchdog attacked Zara for poor quality in 2011. Often time we see much heavier invovlement of government in economic activities. And many emerging markets are very segmented (due to regional economic development gap) than in the US/west. Europe.

To read the fulltext, click here

Outlook for the US Textile Inudstry in 2012

An annual report prepared by the Textile World on the outlook of the U.S. textile industry in the year ahead. The report covers topics ranging from the industry output, market evaluation, price, international trade, job market and policy enviorment.

As noted by the report “Despite declines in employment, job prospects for skilled workers, engineers and merchandisers should be tolerably good as the industry evolves into one that primarily requires people with good communication skills, creativity, and who are skilled enough to operate today’s high-technology, computer-operated machines.”

To read the fulltext of the report, click here

Global Apparel Value Chain Trade and Crisis

Gereffi, G. & Frederick, S. (2010). The Global Apparel Value Chain, Trade and the Crisis: Challenges and Opportunities for Developing Countries. The World Bank.: Washington DC

One recent work of Dr. Gary Gereffi, a well-known expert on value chain studies, on the impacts of the financial crisis on the global apparel industry. It is suggested that the developing countries will gradually move up in the value chain and undertake more value-added functions such as design and product development. This is a two-edge sword to T&A industries in the developed countries. It could mean more resources to take advantage of and more intensified compeitition at the same time. Although Dr. Gary uses the concepts of OEM, ODM and OBM to describe evolution of the apparel chain, the major conlusions are compatable with the famous stages of development theory suggested by Toney (1986).

To read the fulltext, click here