US textile wasn’t prepared for globalization

The NMI has indeed become the Whipping Boy of the US textile industry. It isn’t that we have displaced their employees, but we have cut our share of profits in the global market it begins to find difficult to deal with.

Let us, for the sake of discussion, map-out what has actually gone wrong that triggered the current controversy.

Globalization of apparel manufacturing is the culprit that the US textile industry finds awfully difficult to fathom. Perhaps it has rested on its laurels that nobody would snatch its thriving business domain from its hands. But as liberalization of free trade creeps in, it wasn’t prepared to deal with the reality that it is in a marginal industry that pays hefty wages versus those in Mexico, Latin and South America and Asian countries.

As perplexing as globalization of apparel manufacturing may be, it also encouraged other US manufacturing industries to head south of the border or to Asian countries. You see, investors (especially manufacturers) have become a very mobile group. They move into new investment venues uninterested in securing large plots of land.
They are there because labor is cheaper than their home country (US), therefore, why must they pay $18 an hour for stateside employees when they can still produce the same quality products for $6 a day in some foreign land?

This phenomenon, triggered by NAFTA and eventually GATT, has rendered political borders inconsequential in the movement of export products from one country to another. It has also forced a once powerful manufacturing base US economy into the service industry. The argument of “Made in the USA” is rendered baseless in light of the establishment of Japanese automobile manufacturing plants and electronics industries in the US mainland. Such claim is further rendered windless by the habits of consumers who, more often than not, search for affordable items that enables them to stretch the family pocketbooks. They aren’t after labels, but greater mileage for their hard earned nickels and dimes. This is true wherever you go.

Whether a consumer is stateside, an islander, Australian or an Asian, the primary focus in their buying food and clothing is far removed from political patriotism, but economic opportunities to stretch the loss of strength of the dollar or devaluation of their currencies. This is especially true in Japan and Asia whose currencies have suffered devaluation. We can see in nearby Japan that consumers are not only frugal, but extra cautious in how they spend their income or savings. They are not about to splurge at a time when economic recovery is bogged down in politics.

Meanwhile, the NMI has developed its garment industry into a powerful sector worth $1.2 billion annually. Despite the fact that the Covenant legally permits finished garment products to enter the US duty free, the US textile industry finds the growth of the local garment industry too bitter a pill to swallow. And so it must, in concert with liberal members of Congress whose political career have been bankrolled for years by labor unions, find a scapegoat to ease the onslaught of stiff competition from Little David in the Pacific.

It wasn’t prepared for stiff competition wrought by globalization. It refuses to do its homework in order to stay apace of the implication of globalization. And, most definitely, it resorted to political arm twisting to bring Little David to his knees. Like an aging athlete, he has difficulty coming to terms that the new kids in the block are young and dynamic whose reflexes are indeed far superior than his aging muscles. He no longer can compete on an equal footing. Thus, the employment of adolescency in a backstabbing ploy to bring competition to his level. It’s history!

We too want our share of freedom and a good working rapport with the great US of A. We’ve given up so much for this relationship. What then is the culprit for all these unwarranted and often contentious feud? Obviously, we can’t be blamed for all that we have done right in wealth creation against all that the US textile unions have taken for granted or have failed to do to keep abreast with competition brought to its doors by globalization. God Bless America!