Textile and clothing industry

If the entrepreneurial fabric of North Portugal is generally characterized by small and medium-sized companies, Galicia has witnessed a process of capital concentration (via mergers and acquisitions), particularly by a large economic group, the Inditex Group, which is responsible for over 70% of the sector ’ s total sales turnover in Galicia, and for 45% of the joint sales turnover of the Galicia-North Portugal Euro-region (Nunes, 2011). This concentration of capital, despite the risks this may entail, gives this economic group considerable weight and negotiating power which greatly benefits the region ’ s entrepreneurial structure, affording Galicia an enviable competitive advantage in the global competitive market of the textile and clothing industry. It should, however, be noted that, with the exception of the major companies, a large majority of Galicia ’ s companies with their own brands generally distributes their products in the domestic market, whether through their own distribution or franchised channels or through multi-brand channels (independent stores or large retailers). This excessive dependence on internal demand and Spanish purchasing power comprises this sector ’ s main frailty in Galicia, especially in periods of weaker economic performance in Spain.

After nearly 50 years of trade restrictions under three successive regimes: Short-Term Arrangement, Long-Term Arrangement and the Multi-fibre Agreement (MFA), with the coming of the World Trade Organization in 1995, a 10-year quota phasing out transitional period governed by the Agreement on Textile and Clothing (ATC) was agreed upon, in which quota restrictions on world trade in textile and clothing (T&C) was to be phased out progressively, down to zero by the end of 2004—thus subjecting T&C to the same multilateral trade rules as other industrial products under GATT/WTO. Although the elimination of quota and other restrictions on T&C sector was delayed by another four years, to December 2008, the long- awaited goal of liberalizing the T&C has been achieved. Considering the scale of exposure to global competition that the end of MFA created, especially for those countries that enjoyed preferential market access regimes, it is important to evaluate what the impact might have been, now close 10 ten years after the MFA departure. We step back and look at the impact of the MFA departure on textile and clothing industry in Lesotho, one of Africa’s industry leader . 1

Import intensity: A firm, functioning from the developing economy within the global value chain, usually would need to import large share of its final output , which would be exported for value addition at the next stage in the chain. In such cases the import intensity would be high for exporting firms. However, in the case of Indian Textile and clothing industry, it is argued the structure of the Indian T&C industry is such that all the intermediate processes from raw material to the final output is done within the country and then exported. Studies done on Indian firms provide contradictory evidence on the effect of import intensity on export performance. Pant (1993), Export-Import Bank of India (1996), and Dholakia and Kapur (1999) find a positive influence but Siddharthan (1989) and Patibandla (1992) find a negative relationship between import intensity and firm level export performance in India. The effect of import intensity is thus ambiguous and needs empirical verification. Impint is the indicator for Import intensity. It is measured as Total forex spending divided by sales.

If the entrepreneurial fabric of North Portugal is generally characterized by small and medium- sized companies, Galicia has witnessed a process of capital concentration (via mergers and acquisitions), particularly by a large economic group, the Inditex Group, which is responsible for over 70% of the sector’s total sales turnover in Galicia, and for 45% of the joint sales turnover of the Galicia-North Portugal Euroregion [10]. This concentration of capital, despite the risks this may entail, gives this economic group considerable weight and negotiating power which greatly benefits the region’s entrepreneurial structure, affording Galicia an enviable competitive advantage in the global competitive market of the textile and clothing industry. It should, however, be noted that, with the exception of the major companies, a large majority of Galicia’s companies with their own brands generally distributes their products in the domestic market, whether through their own distribution or franchised channels or through multi-brand channels (independent stores or large retailers). This excessive dependence on internal demand and Spanish purchasing power comprises this sector’s main frailty in Galicia, especially in periods of weaker economic performance in Spain.

5 in Tunisia have access to the European market free of customs. In addition, the socio- economic environment of the country has encouraged the establishment of local and foreign investors. Furthermore, to maintain certain competitiveness, the Tunisian authorities have introduced a flexible system which is to exempt taxes and tariffs to expedite the delivery of orders. In fact, a country's competitiveness in this area is primarily depending on the respect of delivery times. On the other hand, the textile-clothing sector in Tunisia is still a potential market due to the possible investment opportunities that are likely to improve benefit of this activity. In fact, Tunisia is a production site targeted by several foreign investors in the textile sector as, in addition to the advantages already mentioned, this country is also characterized by the Textile Technical Centre (CETTEX), several other advantages such as the exclusion from duties and taxes on industrial products on the European Union market, the competitiveness of production costs, a competitive and qualified workforce, a profitable financial and tax incentive, a guarantee agreement and protection for foreign investors and free transfer of profits and proceeds from the sale of capital invested in foreign currency. As for infrastructure, exporting firms are equipped with modern equipment at a good technological level allowing it to offer competitive quality especially in finishing. However, the Tunisian textile and clothing sector is facing several adverse constraints that prevent to expand its activities. In fact, the textile and clothing industry is limited by:

4.3 PROMOTION OF THE COMPETITIVENESS OF SUBCONTRACTING IN TilE TEXTILE AND CLOTli/NG INDUSTRY In response to the conclusions of the forum on subcontracting in the clothing industry, held[r]

v Employment levels down 7% in textiles and knitwear am down lCYiJ in woven clothing between 1985 and 1989 indicate that productivity is continuing to improve by about 3% a year in the t[r]

Data for investment in textiles in individual member states show that this was highest in Italy and Germany, the countries with the largest textile industries in the EC, in both 1990 and[r]

EXTERNAL TRADE Imports of textiles and clothing from outside the EC rose by 10% in terms of tonnage in 1991, as compared with 1990, while exports changed little.. The balance of trade de[r]

TABLE 27 EU: TOTAL IMPORTS- QUOTA UTILISATION % SELECTED MFA CATEGORIES FROM MAIN OPT COUNTRIES GRAPH 1 EU: TEXTILES & CLOTHING TRADE DEFICIT AND EXCHANGE RATES TABLE 28 LABOUR COST COMP[r]

OETH QUARTERLY BULLETIN - Index of special topics 1994 Quarterly Bulletin - December 1994 Turkey: textiles and clothing Information technology, telecommunications, multimedia -their impa[r]

ANNEXES ANNEX I : Penetration rate imports from outside EC as consumption; tonnage ANNEX II ANNEX III ANNEX IV ANNEX V ANNEX VI ANNEX VII Employment in the making-up sector ANNEX VIII : [r]

In the first category, India and Pakistan are the most competitive in global textile and clothing market among South Asian countries. In 2008, India captured 3.5 percent of global T&C export while share for Pakistan was 1.81 percent. The share in global T&C export for Pakistan was decreasing over last 3 4 years while India was able to hold its position in global market. This happened for India because of its strong vertically integrated production structure with up to 98.5 percent of value addition taking place within the country itself, well diversified exportable products and market, and government supportive measures. In the second category, Bangladesh surprised the world with her growth performance in the last 3 decades. Though the emergence of T&C sector in Bangladesh was largely governed by MFA quota restrictions, the country continued to grow even after the abolishment of quota restriction. This is argued that the growth after the MFA phase out was due to the safeguard measure imposed by USA on import from China so export from Bangladesh didn’t have to compete with China. In the third category, Maldives and Nepal are the least competitive in T&C sector among all South Asian countries. The T&C industry in these 2 countries was the result of quota restriction under MFA and the phase out of MFA adversely affected the export performance of both countries. Maldives failed to report any export in this sector in 2006 and Nepal has been experiencing decline in export in this sector since 2003.

We hypothesized that export of textile and clothing depends on the availability of basic and intermediate textile products in the country. Those basic and intermediate products are classified in two categories: First, endogenously produced raw material, and second the imported raw material and intermediate goods. Domestic production of cotton is taken in the model as a proxy of the availability of endogenously produced raw material. While the value of imported textile and clothing products was included in the model as an input for the manufacturing of exportable finished products. The competitiveness of the Textile and Clothing industry in a country depends not only on the core competence of individual enterprises in the industry, but also on the integration of the whole supply chain and relevant supporting industries, as well as internal and external business environments (Li and Newton: 2003). To sustain leadership in their chosen areas, the company seeks to maximize the world-manufacturing share in a core product (Hamel: 1990). The theory of competitiveness of a nation highlights the effects of integration and dynamic interaction across the industry and relevant clusters. The levels of cross-industry integration determine sustainable competitiveness of an industry in a nation.

After January 2010 the figure may increase by double or more than this amount (Mustaqim, 2009). Industrialists also predicted that the effect of the ACFTA upon Indonesian Small and Medium Enterprises (SMEs) in 2011 and beyond is growing stronger. For instance, the importation of cheaper, finished textiles and clothing products into the country have threatened and hurt the domestic industry including batik products. The domestic textile and clothing industry is believed to be vulnerable to Chinese cheaper imports and will lead to the destruction of small and micro businesses in Indonesia. In this scenario, labour-intensive firms and hundreds of small companies will bear the brunt of the market downturn and would shut down entirely because they are unable and do not have the capacity to compete with China’s cheaper products. Based on data from the Indonesia Textiles and Clothing Report in 2009, the export growth of textiles and clothing that averaged 13.9 percent in 2008 will decline to 7.6 percent in 2013. The reduction in exports indirectly affects employment in the industry. There are estimates that as many as 2.5 million workers in the labour-intensive leather and clothing factories, and agribusiness industries could potentially lose their jobs because firms cannot outperform their China rivals. For a worst case scenario, a budget of more than Rupiah 1 trillion has been prepared in order to fund employees for termination claims (Lim and Kauppert, 2010).

Textiles and clothing have become politically sensitive products and their trade has been a battleground particularly since 1974 when the legal structure o f the international textile trade was basically established with Multi Fibre Arrangement (MFA). Roughly speaking, on the one hand, there are some brisk developing countries which have boosted their textile and clothing exports and are very determined to carry on this dynamic expansion. On the other hand, there are developed countries which have eagerly protected their domestic textile and clothing industry in the face of a massive inflow o f competitive imports. In this basic conflict o f interest, the developed countries have unsurprisingly, made textile trade and clothing industry the main industry to which special international trade regulations apply in the form o f trade restrictions. These restrictions have been mostly based on the General Agreement on Tariffs and Trade (GATT) (concluded after the second world war and marked the beginning o f the legal structure o f international trade based on principles o f free trade) but have not ruled out safeguard measures (tariffs and quotas) under certain conditions when domestic producers have suffered serious injury from increased imports (Blokker 1989, GATT 1992, Toyne 1984, Zheng 1988). Taking advantage o f these clauses on safeguard measures, in the beginning o f the 1960s the states o f the major advanced textiles countries initiated separate international arrangements which exempted the international trade o f cotton textiles from GATT rules. In 1973 the Multi-Fibre Agreement (MFA) with its more developed supervisory and dispute settlement framework, was concluded. Not all the applications o f trade restrictions started with the MFAs; some were bilateral “gentlemen’s agreements” between exporter and importer countries, which have set the restrictions higher than the arrangement under the MFAs.

The textile and clothing industry has become very competitive in the world over. There are many players in the industry. The most prominent player is China. Recent statistics reveal that China continue to be the world’s largest textile and clothing producer in 2016 (Textiles outlook, 2017). China’s major export markets are EU, USA and Japan. However, rising labour costs and production costs of China will shift production to lower cost suppliers. This will give South Asia and South-East Asia an opportunity to capitalize in their exports. The question is, can these regions in Asia take this challenge? To overcome the challenges, they must be ready with highly skilled manpower. The Tertiary and Vocational Educational Training system across Asian re- gion must be geared to take this challenge of training the new recruits. Can these countries have adequate numbers of skilled, effective and experienced trainers to train the new recruits? Qualified trainers may be in short supply. Then, how quickly can these trainers be made available for training? Half-baked trainers would turn half-baked workers that will not give right condition to meet the future challenges. A recent study by the author has re- vealed that there are not enough qualified trainers to impart knowledge and skill for those in the textile and clothing industry in Sri Lanka. This can be the case across Asia. It is time that responsible professionals in the training in- dustry should consider about trainers if they are to launch a massive skilling project to meet requirements of the textile/clothing industry. Skilling the trainers must be a priority. It will be interesting to note that there is a mis- match between trainees and training courses. Also, students are not attracted to training courses. So, there is a concern about who should be trained and are they available?

In order to embark on such an approach, it is necessary to define overall policy objectives, referring to the future role of the textile and clothing industry in, and its contribution to[r]

onbehalfoftheGroupoftheEuropeanProgressiveDemocrats with request for urgent debate pursuant to Rule 14 of the Rules of Procedure on the situation in the textile and clothing industry ftr[r]

In the field of textile and clothing, radio frequency identification (RFID), which is one of the most promising technological innovations, is used in manufacturing, inventory control, warehousing, distribution, logistics, automatic object tracking and supply chain management. Various retailers and manufacturers (of clothing as well as con- sumer goods) such as CVS, Tesco, Prada, Benetten, Wal-mart and Procter & Gamble, are now implementing the technology and exploring the impact of the technology on their business. RFID technologies may improve the potential benefits of supply chain management through reduction of inventory losses, increase of the efficiency and speed of processes and improvement of information accuracy. The basic of success lies in understanding the technology and other features to minimize the potential prob- lems. Although the technology existed for several years, the technological challenges and cost issues are the major hurdles for the widespread use of RFID. In this paper, the authors have addressed the technology of RFID and various applications related to inventory management, production control, retail management, brand segregation etc. in textile and clothing industry. In addition, the disadvantages, challenges and future directions of RFID technology have also been highlighted.