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The apparel sector has traditionally been a gateway to export diversification and industrial development for low-income countries (LICs). In the context of heightened competition and recent changes in the global apparel sector related to trade liberalization and global buyers' sourcing policies, the paper discusses to what extent the apparel sector can still provide this role for LICs today. Recent developments have important implications for LICs that aim to develop through apparel exports, in particular related to (i) increasing entry barriers and global consolidation, (ii) global demand, supply and asymmetric market structures, (iii) high competition in wages and labor standards, (iv) shifting end markets to emerging and regional markets, and (v) the importance of foreign investment with often limited local linkages. The paper concludes that global consolidation and asymmetric market and power structure have increased entry barriers and made upgrading processes more complicated and contested. Even if LIC suppliers fulfill higher requirements and achieve upgrading this does not necessarily secure improved rewards in terms of higher prices, more secure orders and better working conditions. However, shifting end markets to large developing countries, regional and domestic markets, and the increasing importance of developing countries' buyers lead to new opportunities for LIC apparel exporters. Overall, the sector still provides opportunities for industrial development; however, this requires proactive industrial policies in LICs to further upgrading and local value capture as well as a focus away from solely exporting to the US and Europe to regional and domestic markets. At the EU and international level, regulations to secure labor standards and responsible business practices of buyers and changes in the trade and investment regime to increase policy space to support upgrading and industrial development in LICs are necessary.
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In: Trade and Development
The world is in the midst of a sporadic and painful recovery from the most severe economic crisis since the 1930s' Great Depression. The unprecedented scale of the crisis and the speed of its transmission have revealed the interdependence of the global economy and the increasing reliance by businesses on global value chains (GVCs). These chains represent the process of ever-finer specialization and geographic fragmentation of production, with the more labor-intensive portions transferred to developing countries. As the recovery unfolds, it is time to take stock of the aftereffects and to draw lessons for the future. Have we experienced the first global crisis of the 21st century or a more structural crisis of globalization? Will global trade, demand, and production look the same as before, or have fundamental changes occurred? How have lead firms responded to the crisis? Have they changed their supply chain strategies? Who are the winners and losers of the crisis? Where are the engines of recovery?Global Value Chains in a Postcrisis World: A Development Perspective attempts to answer these questions by analyzing business reactions to the crisis through the lens of GVCs. After reviewing the mechanisms underpinning the transmission of economic shocks in a world economy where trade and GVCs play increasing roles, the book assesses the impact of the crisis on global trade, production, and demand in a variety of sectors, including apparel, automobiles, electronics, commodities, and off-shore services. The book offers insights on the challenges and opportunities for developing countries, with a particular focus on entry and upgrading possibilities in GVCs postcrisis. Business strategies and related changes in GVCs are also examined, and the book offers concrete policy recommendations and suggests a number of interventions that would allow developing
In: Review of international political economy, Band 30, Heft 3, S. 1125-1150
ISSN: 1466-4526
In: Marslev , K & Staritz , C 2021 , ' Towards a stronger EU approach on the trade-labour nexus? Pre- and post-ratification impacts, domestic labour reforms and social struggles in the context of the EU-Vietnam Free Trade Agreement ' , Paper presented at 7th Regulating for Decent Work Conference , Geneve , Switzerland , 06/07/2021 - 09/07/2021 .
The EU-Vietnam Free Trade Agreement (EVFTA) seems to deviate from the poor track record of 'trade and sustainable development' (TSD) chapters in EU FTAs. Ahead of ratification, Vietnam embarked upon pathbreaking reforms, culminating in a new labor code and accession to outstanding ILO core conventions. This article assesses the pre-ratification impact of the EVFTA on these reforms as well as potential post-ratification impacts through the civil society mechanisms (CSMs) that are an integral part of EU FTAs. Building on literatures on the trade-labor nexus and externalization of EU governance, we call for a more comprehensive analysis of power dynamics in partner countries and address the lacunae by embedding FTAs and labor reform in a strategic-relational conceptualization of states. We argue that the pre-ratification success of the EVFTA was the outcome of specific conjunctures of so-cio-political forces in, and outside of, state institutions on both sides, and their mediation across trans-national space. Amid free trade skepticism in the EU, particular members of the Parliament and the Council wielded their veto powers to negotiate with Vietnam and pull the Commission into a stronger position. In Vietnam, the external pressure resonated with internal struggles and empowered reform-ists to drive forward labor reforms within the party-state. However, these reforms still need to be im-plemented, for which sustained external pressure and the institutional mechanism of the EVFTA could be supportive. In the authoritarian-communist system in Vietnam, the establishment of the CSM, in-cluding a domestic advisory group (DAG) made up of independent civil society organizations, is unprec-edented, but it remains to be seen how it is implemented. The Vietnamese party-state is scrutinizing the text of the FTA and is reassessing the concessions it is willing to make, while the few independent labour NGOs are skeptical to apply for the DAG. The Commission seems to take the TSD chapter more seriously also post-ratification but has limited leverage in this phase. While this outcome supports pre-ratification conditionality in labor clauses, given the much stronger bargaining position that the EU has at this stage, it also stresses the importance of social struggles in the EU and particularly partner coun-tries to leverage such clauses.
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In: The journal of development studies, Band 57, Heft 6, S. 980-1000
ISSN: 1743-9140
World Affairs Online
In: The journal of development studies, Band 57, Heft 6, S. 980-1000
ISSN: 1743-9140
In: The European journal of development research, Band 30, Heft 3, S. 557-574
ISSN: 1743-9728
In: Staritz , C & Whitfield , L 2017 ' Made in Ethiopia : The Emergence and Evolution of the Ethiopian Apparel Export Sector ' Roskilde Universitet , Roskilde .
The apparel export industry in Ethiopia began modestly in the 2000s, but increased significantly by the mid-2010s and will continue to do so in the coming years, positioning Ethiopia to be an important supplier country in the globalized apparel industry. This paper provides an overview of the emergence and evolution of the apparel export sector in Ethiopia. It argues that the EPRDF government's pro-active industrial policy played an important role in the development of the sector. While foreign firms are an important driver behind the growth of apparel exports, there are also locally owned firms exporting apparel, which makes Ethiopia distinct from most other Sub-Saharan African apparel exporter countries. Ethiopian-owned apparel firms exhibit diverse ownership patterns, including state-owned, party-owned, and private sector-owned firms. The first phase of industrial policy particularly focused on incentivizing local investment in apparel production for export while later phases of industrial policy shifted the focus to attracting foreign direct investment, in order to boost exports and generate employment more quickly as well as bring knowledge and global networks into the country. Despite the focus on exports, the EPRDF government simultaneously has pursued import-substitution policies in the textile and apparel sector, which has helped the development of locally owned apparel firms by subsidizing the cost of learning to export as well as building a national supply chain from cotton to textile to apparel. The challenges for the government's industrial policy approach is to retain the focus on local firms given their important role in productive transformation and to ensure incentives and support for local firms to export, and through this to increase their capabilities and value added, despite the existence of a protected domestic market. ; The apparel export industry in Ethiopia began modestly in the 2000s, but increased significantly by the mid-2010s and will continue to do so in the coming years, positioning Ethiopia to be an important supplier country in the globalized apparel industry. This paper provides an overview of the emergence and evolution of the apparel export sector in Ethiopia. It argues that the EPRDF government's pro-active industrial policy played an important role in the development of the sector. While foreign firms are an important driver behind the growth of apparel exports, there are also locally owned firms exporting apparel, which makes Ethiopia distinct from most other Sub-Saharan African apparel exporter countries. Ethiopian-owned apparel firms exhibit diverse ownership patterns, including state-owned, party-owned, and private sector-owned firms. The first phase of industrial policy particularly focused on incentivizing local investment in apparel production for export while later phases of industrial policy shifted the focus to attracting foreign direct investment, in order to boost exports and generate employment more quickly as well as bring knowledge and global networks into the country. Despite the focus on exports, the EPRDF government simultaneously has pursued import-substitution policies in the textile and apparel sector, which has helped the development of locally owned apparel firms by subsidizing the cost of learning to export as well as building a national supply chain from cotton to textile to apparel. The challenges for the government's industrial policy approach is to retain the focus on local firms given their important role in productive transformation and to ensure incentives and support for local firms to export, and through this to increase their capabilities and value added, despite the existence of a protected domestic market.
BASE
In: The European Journal of Development Research, Band 30, Heft 3
SSRN
In: Oxford development studies, Band 45, Heft 3, S. 303-320
ISSN: 1469-9966
In: Transfer: the European review of labour and research ; quarterly review of the European Trade Union Institute, Band 22, Heft 2, S. 233-248
ISSN: 1996-7284
Although the expansion of global production networks (GPNs) has been an important source of employment generation in many developing and transition countries, the qualitative aspects of this employment are less promising, often being characterized by high flexibility, uncertainty and precariousness. Drivers of these outcomes are industry dynamics and lead firm strategies such as fast fashion in the apparel industry. Equally important are, however, multi-scalar institutional contexts and state policies that influence social up- and downgrading trajectories. Against this background, the article assesses the up-/downgrading of apparel workers in Romania, a key regional supplier of western European markets. In addition to the sourcing practices of lead firms, and particularly fast fashion, we highlight the legacy of the country's state socialist past and its post-socialist transformation, Europeanization and the global economic crisis as drivers of GPN outcomes.
In: Cambridge journal of regions, economy and society, Band 8, Heft 3, S. 421-438
ISSN: 1752-1386
In: World development: the multi-disciplinary international journal devoted to the study and promotion of world development, Band 56, S. 243-257