A new study released by the Harvard Center for Textile and Apparel Research concludes that the end of the global quota system need not be a fatal blow to the U.S. textile and apparel industries. “Some might have you believe that these U.S. industries are hanging by their last thread,” says Professor Fred Abernathy, Gordon McKay Professor at Harvard’s Division of Engineering and Applied Sciences. “It
simply isnt true.”
Abernathy and David Weil, principal investigators at the Harvard Center for Textile and Apparel Research, view the U.S. textile-apparel-retail chain as a dynamic, complex industry that has as much to do with geography and
ongoing trade relations as it does with the end of quotas under terms of the General Agreement on Tariffs and Trade (GATT). For instance, they point out the tariffs on garments will remain in place long after the end of quotas.
More importantly, the stringent demands that modern retailers place on their apparel suppliers result in sourcing decisions that rely on many factors including, but not limited to, direct cost. The entire paper Apparel and Textile Industries after 2005: Prospects and Choices can be downloaded online.
Chief among the recent concerns is that goods from China will suddenly flood the U.S. marketplace, wiping out domestic manufacturers as well as other sources of apparel like Mexico. Research by Abernathy and Weil shows other
outcomes are more likely. They have found that the United States imports a large portion of its apparel from countries that are geographically proximate,
primarily because those products arrive more quickly.
“The Wal-Mart model that dominates the U.S. retail scene requires suppliers to replenish their products on a weekly basis,” says David Weil, Associate Professor of Economics at Boston University School of Management. “We dont see that relationship changing just because quotas are being
eliminated.”
