Global Apparel Sourcing for US----The post January 01, 2005 scenario.

The topic of my research paper is “Global Apparel Sourcing for US----The post January 01, 2005 scenario” January 01, 2005 is the date when free trade agreement of WTO will come into effect and all trade barriers---quotas, duties, tariffs-will be either eliminated or subjected to reduction under a time frame of a few years.

In this paper I have attempted to investigate and conclude the optimal trade policy US should implement in order to achieve maximum advantage for its economy without undermining or exploiting the economies of its trading partners. Throughout this paper the primary focus will be on apparels with bilateral trade and advantage to the US economy taken in a broader perspective. In other words the apparel industry will be the focal point in concluding as to how the US economy and industry as a whole will be benefited by the recommendations provided by this paper.

The primary source of my research has been Internet, books, periodicals and articles from industry experts, policy makers and academia.

The primary reason to work on this topic is three fold.

1. I have been associated with the apparel industry through

The US being a huge market of apparels consuming 25% of the total output at one time had its own booming apparel industry up until the 70s in addition to sourcing from a handful of Asian countries like Hong Kong, Korea and Taiwan. The 80s saw the emergence of new vendor countries all over the world from Macau to Mexico and from Lithuania to Lesotho. US retailers and importers now have the world to shop from. This changed the whole outlook the way US retailers and importers source their products.

all over the world following the principle “you call the quantity, I will call the price, quality and delivery”. And who can underestimate the importance of this consumer perception to the economy. As Bernie Marcus, co-founder of Home Depot, Inc, the largest Home Improvement chain in the world aptly puts in his book Built from Scratch, “ Sixty years ago, grocery stores, cut butter out of a tub. If you wanted a half a pound, they went in with a knife and cut it out, and we all paid for the butter and the labor. When supermarkets came along, butter was precut and pre-measured. It sold for much less because it could be made and delivered much more efficiently. Efficiency should give you lower prices. Lower prices should be better for the consumer. Whatever is better for the consumer is better for the economy”

FOUR January 01, 2005 Remainder (maximum 49%) when the ATA itself is to disappear on this date resulting in full integration into GATT..

As stated above, in order to prevent disruption to their domestic industries, developed nations have insisted on a framework to manage the international trade of textiles. This framework contained rules for the impostion of selective quantitative restraints when surges in imports caused, or threatened to cause, market disruption. This framework or trade regime was formally adopted in 1974 and is known as the Multifibre Agreement (MFA). What is the purpose of MFA? To provide for the orderly development of world textile trade. For the last 20 years MFA has regulated textile imports into the United States through annual quotas, set on a country-by-country basis. These quotas incorporated annual growth rates, the standard being 6%, although the actual rates varied considerably.

The aesthetic side of the apparel industry is creation of fashion. The apparel industry manufactures clothing, but it sells fashion. And fashion changes generate hundreds of billions of dollars in sales for an industry which ones was a major manufacturing force in the US—but not anymore. No other industry more rapidly reflects changing consumer lifestyles. Social, political and psychological influences, as well as whims of style, create sudden shifts in buying patterns. Today this is particularly true. The cry for new different clothing has never been greater as increasing numbers of men and women ignore the dictates of the fashion establishment and seek clothes which express their individuality.

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