Apparel Agreement by wgb15852

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									Apparel Industry:
     China
 “The Sleeping Dragon”



     By:
     Amanda LaConte
     Kate McElroy
     Brian Morris
History of Multi-fiber Agreement (MFA)
   1974: Replaced Long Term Agreement (LTA)
     Extended coverage to wool & manmade fibers and imposed a
       growth rate on quotas

   1994: MFA Expired
     US imposed quotas on developing country exports


   1995: MFA replaced by Agreement on Textiles and Clothing
    (ATC)
     Increased quota growth rates so remaining quotas would be phased
       out by 2005

   2004: US imposed a higher number of binding quotas on China
     China:    31/87 binding quota restrictions
     Thailand: 1/46 binding quota restrictions
Trends in U.S. Imports from China, 1990-2005

           250,000



           200,000                                          The effects of China joining
                                                            the WTO with the removal
                                                            several quotas
           150,000
 Imports




           100,000



            50,000
                                                           Restrictions placed on
                                                           Chinese exports
                 0
                 1990 1992 1994 1996 1998 2000 2002 2004
                                   Years
Impacts of Quota phase-out in 2005
   Consumers in importing countries “benefit”
     Cheaper prices and more choices



   Producers in importing countries “lose”
     Can not compete with the cheaper prices



   Globalization increases trade worldwide with integration of
    apparel textiles trade

   Foreign Investment flows out of previously-unrestricted countries
    to previously-restricted ones
     Smaller developing countries suffer
U.S. Trade with China over the Years

                                                  Annual Growth Rate
                                             1990-2000       2000-2005
                                                      21%              19%


                                        What will the Future hold for the US?
                                           Year             Future Imports
                                           2010                     592,631
                                           2020                   3,511,477
                                           2030                  20,806,314
                                           2040                 123,282,242
                                           2050                 730,475,905
Figures are in millions of US dollars
   15               Wool Apparel
                                               PRICE OF CHINESE
                                               APPAREL IMPORTS

   10


US $

             Cotton Apparel
       5
                                     Apparel



           Man-made Fiber Apparel



             2004                    2005                2006


                                    YEAR
United States is China’s #1 Customer
                    China's Top Trade Partners in 2005 ($ million)

 100,000.00

  75,000.00

  50,000.00

  25,000.00

        0.00




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                                                    Country/Region
United States is China’s #1 Customer
                    China's Top Trade Partners in 2005 ($ million)

 100,000.00

  75,000.00

  50,000.00

  25,000.00

        0.00




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                                                                           e
                                                                          Th
                                                  Country/Region
                            % of Pop
             Population    Employed in
             (Millions)      Apparel

Bangladesh          143           1.3%
China             1,300           0.4%
India             1,100           0.4%
Pakistan            151           0.5%
Sri Lanka             19          1.8%
Thailand              62          1.4%
Vietnam               82          2.4%
                   % Change in US Apparel Imports
                                   2004-2005
60
                   China
50
40

30

20                         India

10
      Bangladesh
 0

-10                                  Pakistan Sri Lanka
-20                                                       Thailand
                                                                     Vietnam
-30
China’s Manufacturing Industry
   Four Main Categories in China’s Manufacturing Industry

   Ratio of Employees per Corporation is significantly higher for the
    Apparel Industry

   However, this table does NOT display the number of Establishments
    per Corporation

   One of China’s main focus in
    manufacturing involves more                      Number of                Ratio of
    workers and corporations in the                  Industrial              Employees
                                                                                 per
    Apparel Industry                                Corporations   Employees
                                                      (10 000)      (10 000) Corporation
            Manufacturing of Apparel                    16            1,583           99
            Manufacturing of Industrial Goods           23            1,085           47
            Manufacturing of equipment                  32            1,996           62
            Manufacturing of Food and Agriculture       11              483           44
Revenue of Industrial Corporations
                        Electricity, Gas and
           Mining and    Water Supply and
           Quarrying        Production
                                                  The Manufacturing Industry
                                                   generates the greatest
                                                   amount of revenue from
                                                   sales and customer
                                                   activities.
Manufacturing


                        13% Food and
                         Agriculture           20% Apparel



  Breakdown of the                                       19% Industrial Goods
   Manufacturing :
      Industry
                             48% Equipment
                      U.S. Employment in Apparel Manufacturing
                                   (Thousands)

            900
            750
            600
Employees




            450
            300
            150
             0
              1996   1998          2000          2002            2004   2006
                                          Year
China’s Competitive Advantage

     Large, highly productive, low cost labor
      force

     Price competitiveness

     Efficient port facilities
       China’s shipping time to the US

         “12-18 days”
“With Quotas gone and Chinese goods setting the market’s
price floor, those who cannot compete on price are marching
to a familiar anthem…”


   Quality
   Quick Return
       need a steady delivery of
        finished goods
       focus on supply chain
        management
   Customer Service
Globalization has altered the Dynamics
       of the Apparel Industry.
   IT’S TIME WE TAKE NOTICE

             Made in China

								
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