The Travels of a T-Shirt in a Global Economy
“The Travels of a T-Shirt in a Global Economy” projected not only value chain of T-Shirt but also explain us through U.S. textile industry and how globalization and free trade work. Projecting integration of product and resource across international markets, fundamental and important of globalization has been indicated.
Tracing T-shirt value chain starting at Texas where raw material was grown, explains how the U.S cotton industry has been able to dominate the world’s production for a very long period of time. Although American cotton growers are well-known for being “innovative entrepreneurs”, the big theme of discussion and controversy here lies in the subsidies farmers receive from U.S government. The whole set of quotas, tariffs and subsidies they receive are called protectionist policies.
Moving on the value chain to manufacturing process in China, the fact that U.S. T-Shirt retailers’ attempt to provide more value to their customers by offering less and less expensive goods, has introduced speed bumps in the economics race for the bottom. With integration of globalization and technology, communication and transportation, could make it happen. Players in apparel industry have looked for ways to reduce costs by outsourcing their productions outside the US. As a result, some groups think that the phenomenon has led to domestic unemployment. But in fact, globalization is not the only source of the problem; it is the advancement of production technology. Productivity has been higher while using less labor force.
Nevertheless, Quota system, an import barrier, was implemented with interference from politics. Reverse effects of the policy benefited China more than small developing countries that the US was trying to help and US textile companies themselves. Importers were unable to predict and establish relationship with their suppliers. This also means costs of finding new suppliers and risk to business. Import barriers limited flexibility for US fabric producers
Tracing T-shirt value chain starting at Texas where raw material was grown, explains how the U.S cotton industry has been able to dominate the world’s production for a very long period of time. Although American cotton growers are well-known for being “innovative entrepreneurs”, the big theme of discussion and controversy here lies in the subsidies farmers receive from U.S government. The whole set of quotas, tariffs and subsidies they receive are called protectionist policies.
Moving on the value chain to manufacturing process in China, the fact that U.S. T-Shirt retailers’ attempt to provide more value to their customers by offering less and less expensive goods, has introduced speed bumps in the economics race for the bottom. With integration of globalization and technology, communication and transportation, could make it happen. Players in apparel industry have looked for ways to reduce costs by outsourcing their productions outside the US. As a result, some groups think that the phenomenon has led to domestic unemployment. But in fact, globalization is not the only source of the problem; it is the advancement of production technology. Productivity has been higher while using less labor force.
Nevertheless, Quota system, an import barrier, was implemented with interference from politics. Reverse effects of the policy benefited China more than small developing countries that the US was trying to help and US textile companies themselves. Importers were unable to predict and establish relationship with their suppliers. This also means costs of finding new suppliers and risk to business. Import barriers limited flexibility for US fabric producers