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1.Why is it necessary to view textile and apparel from a global perspective?

1.Why is it necessary to view textile and apparel from a global perspective?
-Globalization of fashion- ex.gucci; originally from Italy. Stores in New York, Hong Kong, Tokyo, Miami+ other countries.

-24- Hour Fashion- very common to imitate couture looks. Merchandise can be made, and sent to sell in 24 hours. Its getting bigger and faster and keeps moving ahead always. quick response.
-The largest source of industrial employment in the world; (textile mills, factories) - not true in the United States. Have to look at the world. Other countries (china, Vietnam, and india it could be the main income for most people in those countries, some towns everyone works in the factories)


2.What are the reasons for the shift to a global perspective for textiles and apparel?

A. Economic Growth
1. Consumers in many countries have the means to purchase products from various parts of the world
2. Companies have been willing to add capacity to serve foreign markets
3. Fewer restrictions have been applied to imports when the economy has been booming.
B. Varying stages of economic development in many newly developing countries
1. T & C production have been the 1st industries for most countries as they have moved toward economic and industrial development.
2. Diversity in term of economic development attracts different countries to one another.
C. New Communications technologies
- Skype, faxing
D. Easy Access to most parts of the world through improved transportation.
1. People Transportation
2. Goods Transportation
*Importing goods and personal travel
E. Institutional Arrangements on the part of business and government
1. The development of basic rules and guidelines to establish order in international trade.
2. The transfer of payment for those goods and services from one country to another.


3.What is textile complex, textile sector, textile industry, softgoods chain?

A. Textile Complex - The industry chain from fiber, to fabric, through end uses of apparel, interior furnishings and industrial products
B. Textile Sector - same as textile complex
C. Textile Industry - the fiber-to-fabric-segment of the industry
D. Apparel Industry?
E. Softgoods Chain - textile complex plus the retailing or other distribution phases associated with making the products available to the consumer.


4.What are upstream activities and downstream activities?

- Up stream activities- those processes in the early stages of manufacturing chain, such as fibers, textile machinery and dyestuffs.
-Downstream activities-closer to the end- use customer, such as wholesale and retail.


5.What are developed countries, developing countries, and newly industrialized countries?

Developed countries- the more industrially advanced and prosperous countries in which a higher level of living is common .
Developing countries- limited in their economic progress and have little or no industrial development.
Newly industrialized countries (NICs)- former developing countries, then have progressed to more advanced levels of economic and industrial development.


What are imports and exports?

Imports- buying goods and services from other countries
Exports- selling goods and service to other countries
*Developing countries tend to export more than developed countries because of cheap labor.


1.How did the textile sector develop in historical global industrial movements? In other words, what is the general movement of the textile sector according to the history?

1.Textile led the Industrial Revolution when it became the first sector to shift from the use of skilled hand labor to production based on hand-powered machines and, later, steam power(Developed countries used textiles to lead industrial revolution) 1st picture - Use of machines for production (Industrial Revolution) 2.First sector to build factories to apply the new developments on a large scale. 2nd picture - Development of Factories 3.The development of mill towns in rural areas. 3rd picture - Migration from farms, development of mill towns 4.create the jobs that led to participation of the first generations women in widespread employment for wages outside the home. 5.Poor working conditions in the textile mills and later in the garment factories led to the first industrial reform . in many developing countries today they are still on the 5th step B. U.S. followed the same procedure 1. Golden age of textile machinery 2. samuel slater- spinning mill (1789) a. eli whitneys cotton gin- clean cotton (1793) b. power loom (1795)


2.When the transitional years for international trade are considered, what happened in the 17th and 18th centuries, the 19th century, the early 20th century, the mid-20th century, and the late 20th century?

II. Transitional years for international trade
A. Stage A (the Mid - 20th Century) (50’s & 60’s)
1. Trade became more volatile
B. Stage B (The Early - 20th Century) (1900 thru 1940’s)
1. Development of an international economy
2. Economic nationalism builds
3. Emergence of protectionism
4. US as a leader in world trade (textile)
C. Stage C (stage 1) (the 17th and 18th Century)
1. The era of mercantilism
2. The emergence of capitalism
D. Stage D (the late 20th century) (70’s thru 90’s)
1. Development of floating exchange rates
2. Growing difficulties in textile trade
E. Stage E (the 19th century)
1. Foreign expansion
2. A time of important changes in the US
3. Migration of labor

II. Transitional years for international trade
A. The 17th and 18th centuries (Stage C)
1. The era of mercantilism
2. The emergence of capitalism
B. The 19th Century (Stage E)
1. Foreign expansion
2. A time of important changes in the US
3. Migration of labor
C. The early 20th century (Stage B)
1. Development of an international economy
2. Economic nationalism builds
3. Emergence of protectionism
4. US as a leader in world trade
D. The mid-20th century (Stage A)
1. Trade became more volatile
E. The late 20th century (Stage D)
1. Development of floating exchange rates


1.When economy and trade are discussed, what do scarcity and choice mean?

Scarcity and Choice
1. No society can provide everything its people want
2. Resource of time, labor, machinery, land is scarce
3. We choose between competing demands on resources


2.What is opportunity cost?

2.What is opportunity cost?
1. The opportunity cost of using resources a certain way is the value of what these resources could have produced if they have been used in the best alternative way
example: growing cotton in NY vs. selling cotton in a building in NY


3.What are the laws of supply and demand? What is equilibrium price?

1. Law of Supply
a. a general statement about how producers adjust the quantity of
goods or services available in relation to incentives (price)
b. When the reward offered for a specific product rises, this reward
provides an incentive to produce more of the products
2. Law of Demand
a. a general statement about how individuals respond to changes in
b. rising prices for a product usually cause a drop in demand
3. Equilibrium Price
a. the price at which the quantity demanded equals the quantity


4.When can voluntary exchange happen?

1. In a voluntary exchange, that is, buying and selling of goods and services - both parties must feel they are benefitting
2. Both parties are pursuing their own best interests and believe they will
be better off as a result of the trade.


5.What is Mercantilism? What is the background of Mercantilism?

A. Mercantilism (oldest trade)
1. A country’s wealth depends on its holding of treasure, in particular gold.
2. England, France, and Spain competed and fought to acquire colonies
and gold between 1500 and 1750.
3. Economic Nationalism because of the emphasis on building domestic
industries and domestic economies.


6.How to understand the theory of absolute advantage? Who developed it? What might be the limitations of this theory?

1. Adam Smith, 1776
2. Certain efficiency of production by certain country
3. Based on natural advantages, acquired skills/tech and labor


7.How to understand the theory of comparative advantage? Who developed it?

Comparative Advantage
1. David Ricardo, 1817
2. Case of no absolute advantage
3. Example


8.What is Factor Proportions Theory? According to this theory, what are the two requisite factors of production? What questions can this theory answer?

Factor Proportions Theory
1. Answer two questions
a. why this comparative advantage (relative efficiency of labor)
b. How to identify the product areas in which countries might have
their greatest advantage?
2. Two requisite factors of production
a. capital (developed countries) “should focus on”
b. labor (developing countries) “should focus on”
*If I have a lot of money but I don’t have a lot of employees
*If I have less money but lots of employees
3. Capital - abundant countries export capital - intensive products; less
developed countries export labor-intensive products.
-if a countries has lots of labor what industry should they work on?


10.What are the Rostow’s Stages of Development?

1. Rostow’s Stages of Development
a. The traditional society
b. the pre-take-off stage
c. the take-off
d. the drive to maturity
e. the age of high mass comsumption
2. Main Points
a. every country can reach the 5th stage at last (yes eventually they
b. developments means accumulation of capital
c. trickle down economics
d. based on technology


11.How to understand Structural Theories of Development? 1. Main Points

a. the rich country is rich because of the poverty of other countries
b. success/failure dependent
c. Imbalance of resources = development gap
d. T&C play role in exploitation
e. global interdependence


1.If the stages of development in the textile complex are discussed, what are the 6 different developing stages? And what are the characteristics of each stage and what are the examples?

A. The embryonic stage
1. cottage production
2. domestic consumption
3. hand production natural fibers
4. export cotton fibers
Ex. Africa, South America
B . Early export of apparel
1. component assembly, ethnic clothing
2. cheap prices
3. unpredictable quality
Ex. Developing (blue) Pakistan, Bangladesh
C. More advanced production of fabric and apparel
1. fabric/apparel
2. increased improved products
3. fabric export
4. fiber production
5. increased/upgraded apparel
6. foreign investment
Ex. Developing- China, Mexico, India, ASEAN countries
D. The "golden age" stage
1. increased size manufacture
2. large trade surplus
3. more international trade
4. production is too expensive in domestic country
5. shift to other countries
Ex. NIC countries- Taiwan, Hong Kong, Korea
E . Full maturity
1. Increase of consumption
2. diversity of clothing, fiber
Ex. US, Canada, Australia
F. Significant decline
1. # of firms, # of workers
2. huge deficit
3. offshore production
4. European countries- Italy


1,What is the global pattern of textile production? What is the global pattern of apparel production?

Global Patterns of Production
Textile Production (capital)
Developed countries production grow slowly or stay same or decline
Developing countries and NICSs share doubled
Apparel Production (Labor intensive)
Developed countries produce same amount
Developing countries and NIC shares tripled


2.What is the global pattern of employment in the textile industry? What is the global pattern of employment in the apparel industry?

Global Pattern of employment
Developed countries- 30% less people employed
1953-1963 decrease with higher decreasing rate
1973-1987 decrease with higher decreasing rate
Developing countries: 40% more people employed
1953-1963 Increase
1963 to 173 increase with higher increasing rate
1973 to 1987 increase with lower increasing rate
Apparel: bigger shift in apparel than in textiles

1954-1963 increase
1963-1973 increase with lower increasing rate
1973-1987 decrease
Developing countries
1953-1963 increase
1963-1973 increase with higher increase rate
1973 to 1987 increase with higher increase rate


3.What are the key points in the global pattern of production and employment?

Key points in production and employment
Textile and apparel industries are growing but less now than ever before
Production is shifting from developed countries to developing countries.
Employment is shifting from developed countries to developing countries
Changes toward developing countries are larger in apparel than in textiles due to characters of apparel industry and textile industry


4.What is the global pattern of textile trade? What is the global pattern of apparel trade?

Trade in apparel
1. Patterns of trade: the shift of apparel trade is more dramatic than in textile
a. Developed countries
1. exports decrease, imports increase
2. exports of developed countries
a. 1955 to 71%
b. 1992: 39%
b. Developing countries
1. imports decrease, exports increase
2. Leading apparel exporters: HK, China, Italy, Germany, korea
3. Leading apparel importers: US, Germany, Japan, HK, France


1.The overview of US fiber industry. The overview of US textile components and products industries.

The US textile industry
The fiber industry
Natural fibers
2nd largest producer
Exports to Japan, South Korea, other Pacific Rim
Manufactured fibers
Leading world producer (US)
Capital & technology intensive
15 large multinational corporations
top 10 account for more than 90% of US production (dominated by 10 US companies)


2.The US trade of fiber industry and textile components and products industries (You do not need to memorize those figures, but you need to know the basic pattern and changes.)

The textile components and products industries – textile mill products
Decreasing number of business
Increased productivity
1973 – 1 million
1993 – 593,000
Fiber industry
Exports – increased
1972 – less than $200 million
1992 - $1.7 billion (cotton & manmade fibers)
US share of market decreasing
1979 – 33%
1991 – 18%
Textile mill products
Focus on domestic need
Early 1980’s – 97%
1993 – 93%
1989 - $2.8 billion
1993 - $4.7 billion
Exports to Canada, Mexico, W. Europe
31% of US imports are from NICs
26% from European Union


3.The overview of US apparel industry

. Overview
More companies & employees than textiles
Small companies
63% of clothing factories in the U.S. employ fewer than 20 employees
largest 20% of clothing factories employ 78% of all workers who work in clothing factories
Family owned
Geographically dispersed


4.What is import penetration?

Import penetration
Ratio of imports to consumption
Import penetration = imports / (imports + domestic production – exports)
Physical quantities or value
Large number of imports from China, Hong Kong, Taiwan, Dominican Republic, South Korea, Mexico


1.What is GATT? What is the primary goal of GATT? What are the basic principles of GATT?


What is GATT?
General agreements of tariffs & trade, the first multilateral trade agreement
What is the primary goal of GATT?
To liberalize trade to free trade from the web of restraint that had evolved
What are the basic principles of GATT?
Trade without discrimination, protection through tariffs is allowed, quantitative restrictions on imports were prohibited-quota, a stable basis for trade


2.What is STA? Why did STA start? What was STA about? What is Market Disruption?

What is STA?
Short Term Arrangements
Why did STA start?
Because GATT couldn’t take care of textiles so part of textiles trade policy needed to be separated from GATT.
What was STA about?
Restrictions on 64 categories of cotton textiles to avoid market disruption until a more permanent mechanism could be developed.
What is Market Disruption?
To export products to a market with a price lower than the cost in that market.


3.What is LTA? What was LTA about?

What is LTA?
Long Term Agreement
What was LTA about?
LTA included provisions for government to follow if they claimed market disruption. LTA limited volume growth of imports to 5% per year for most common textile products. Still focused on cotton products.