Part 1: Textiles and "Free" Trade

Marjorie says...

Speaking of there being no jobs in the U.S., on January 1 the industrialized nations eliminated the Agreement on Textiles and Clothing, which may cause the global textile industry to shift dramatically to India or China in the next two years. These ‘quotas’ limited the amount of textiles that could be imported from any one country, thereby making it possible for small third world countries to develop textile industries. The quotas also supported the U.S. textile industry, which has lost almost half of its production in the past ten years. Even with the quotas, it has been hard to compete with the cheap labor costs of China and India.

The WTO estimates that China’s share of the U.S. apparel market will rise from 22% to 50% in the next two years. This could cause millions upon millions of textile workers to lose their jobs, not only in developing nations throughout the world that depend on the textile industry, but right here in the U.S.

I ran across a comment by the CEO of Perry Ellis, George Feldenkreis, that Central American nations that sign on to the Central American Free Trade Agreement (CAFTA) will have a better chance of competing. This comment really impressed upon me the vicious circle of the WTO, IMF, and "Free" Trade agreements. The WTO regulates global trade in the name of “Free Trade” (although it has to have rules so the moniker is a little misleading). These regulations in turn are like a guillotine over the heads of nations who resist entering into these "free" trade agreements with behemoths like the U.S. And the IMF, of course, imposes strict conditions for how debtor nations are to structure their governance, insisting on privatization, little to no social spending, and elimination of import tariffs and subsidies to domestic industry.

It begs a big question – how on earth are poor countries supposed to develop? How are they to survive in this cut-throat global trade regime that imposes upon them ideological, neoliberal rules?

Of course, one of the biggest ironies is that the U.S. itself, a country that has a huge external debt but doesn’t suffer from the imposition of IMF rules (since we essentially are the IMF), will feel the effects of the elimination of these textile quotas. Or perhaps it isn’t ironic. Maybe it’s all part of a plan towards a global world, with the ‘third world’ and the ‘first world’ to found in every country, existing alongside one another.