The Competitive Status of the U.S. Fibers, Textiles, and Apparel Complex A Study of the Influences of Technology in Determining International Industrial Competitive Advantage (1983) / Chapter Skim
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4. Future Scenarios, Policy Options, and Their Implications
4. Future Scenarios, Policy Options, and Their Implications
Pages 66-86
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From page 66... ...
, (2) identify government policy options in a number of areas that could alter the basic scenario, and (3)
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From page 67... ...
· The projected overall slow growth in domestic demand for the output of the complex in the face of increasing imports and productivity will result in employment declining slowly but steadily. The greatest reduction will take place in apparel and in those parts of the fiber and fabric segments that are heavily dependent on the apparel segment.
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From page 68... ...
Trade Mechanisms As a preamble to this discussion of trade mechanisms, several key points are important. First, there is an existing, official, and highly complex framed work governing international trade that comprises a number of specific mechanisms: primarily, the General Agreement on Trade and Tariffs (GATT)
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From page 69... ...
While the renewed (12/81) MFA is expected to help reduce these problems, faster enforcement and more strict controls would lessen import surges and market disruptions, lessen the risks and improve the planning ability of domestic firms, and make for a more orderly transition and adjustment by the complex.
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From page 70... ...
In addition, there are required consultations with a country whose exports to the United States increase rapidly, either because they were not covered by a bilateral agreement or because the particular agreement did not set a quota for the specific product. If no agreement can be reached, the United States can usually act unilaterally, either in accordance with the provisions of the bilateral under Article 3 of the MFA, or under the provisions of Section 204 of the Agricultural Act as amended, as the case may be.
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From page 71... ...
Changing the Export Authorization System Unlike many countries, including European countries, the United States allows exporting countries to decide who shall export within the limits set forth in their bilateral agreements and does not employ a double check system. This permits foreign exporters to buy or sell their licenses to export, thus giving the economic rents (profits)
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From page 72... ...
The consensus of the panel, with one strongly dissenting opinion,8 was that offshore processing (the use of Item 807) preserves jobs9 in the fiber and fabric sectors and even some in apparel and may allow some U.S.
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If business prospects and capital availability are high, RED increases, competitiveness increases, business prospects and capital availability improve further, and so on. The obvious trick is to get the cycle moving upward.
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From page 74... ...
Fiber In the man-made fiber segment of the complex, the R&D emphas~s of the past seven years on energy-cost reduction and EP A equipment-r elated technology will shift to product and process variant technology: taking existing polymers and making new combinations, nigher value products, and better products in terms of quality and aesthetic and processing properties. It is not expected that any major, totally new fibers will be developed.
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From page 75... ...
Dyeing, Printing, and Finishing Fabric dyeing, printing, and finishing represent still other areas where technology is expected to advance. The main reason is that these processes add flexibility to firms' strategies and products and help differentiate them from developing country firms, which compete mainly in undifferentiated low-price goods.
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From page 76... ...
Home Furnishings and Industrial Fabrics Except for carpet, the manufacturing technologies of the home furnishings sector are fairly similar-to those of the fabric sector. Therefore, future technology scenarios for them are similar to those just mentioned for fabrics.l3 However, technologies of the industrial fabric sector are much more varied.
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From page 77... ...
Government policy options affecting these expected trends are
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From page 78... ...
was feasible nor desirable for the United States to pursue. The anticipated impact of the other policy changes would be a more highly skilled labor force for the textile complex and less short-term unemployment for the United States as a whole.
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From page 79... ...
The panel also believed that more middle management development programs will be needed because the nature of the textile business and its work force will be continually changing. Unfortunately, current curricula of many business schools place emphasis on large organizations, growth industries, and on preparing people for top management.
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From page 80... ...
In a broad sense, this process and related procedures concern strategic management, the most critical aspect of which is strategic marketing; identifying what market niches will best protect the firm from competition while placing it in a position to take best advantage of opportunities. The strategic planning process and its outwardly focused orientation are particularly critical for mature, slow growth industries.
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From page 81... ...
and foreign taxation on the respective textile complexes. It has been alleged that taxation systems and procedures in foreign countries give competitive advantages to their complexes, even in countries where official corporate income tax rates are higher than their U.S.
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From page 82... ...
The same conclusion is basically true for cooperative export market development, despite the fact that expanding exports are a government priority and that cooperative export associations are legally excluded f ram antitrust regulation under the Webb Pomerene Act.~5 Antitrust regulations may also become increasingly important as the fabric and apparel sectors continue to consolidate, and if further integration (horizontal or vertical) takes place.
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From page 83... ...
policy should also be more proactive rather than reactive. That is, the future impact on the textile complex of changing economic conditions and government policies at home and abroad should be estimated, and then policies should be enacted to facilitate the adjustment process (lessen the expected adverse impacts and increase the desirable impacts)
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From page 84... ...
Th is conclusion is based on several estimates that per capita consumption of fiber (and hence fiber products) will increase faster in developing countries because their current consumption levels are so low relative to those in developed countries.
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From page 85... ...
Yet offshore processing is also said to have lessened even more drastic reductions in employment that would have occurred if the moves offshore had not been made. That is, by increasing the firms' competitiveness, domestic employment shrinkage was lessened.
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From page 86... ...
18. One can argue whether such government assistance i s advisable or desirable compared to letting market forces determine which firms survive.
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