Innovation Policies and International Trade Rules: The Textiles and Clothing Industry in Developing Countries
Edited by Kaushalesh Lal and Pierre A. Mohnen
Contents
List of Figures vii
List of Tables ix
Notes on the Contributors xii
Acknowledgements xiv
1 Introduction 1
Kaushalesh Lal and Pierre A. Mohnen
2 The Textiles and Clothing Industry and Economic
Development: A Global Perspective 10
Kaushalesh Lal
3 The Institutional Environment and the Textiles and Clothing Industry in China 37
Yanyun Zhao, Danbo Guo, Fang Chen, Feng Zhen, Zhi Li,
Enjing Li, Haodi Li and Qingping Zhang
4 The Indian Textiles and Clothing Industry and
Innovation Policies 97
K. Narayanan
5 The Textiles and Clothing Industry and Economic Development: A Case Study of Mauritius 141
Aveeraj S. Peedoly
6 Technological Capacity-Building Initiatives in the Ghanaian Apparel Industry 195
Donatus Kosi Ayitey
7 International Trade Rules and the Textiles and Clothing Industry in Uruguay 231
Adriana Peluffo
Index 291
List of Figures
2.1 Trends in T&C exports in first tier countries 16
2.2 GDP and export performance of T&C in first tier countries 16
2.3 Wage rates and export performance of T&C in first tier countries 17
2.4 Trends in T&C exports in second tier countries 18
2.5 GDP and export performance of T&C in second tier countries 19
2.6 Wage rates and export performance of T&C in second tier countries 20
2.7 Trends in T&C exports in Korea 20
2.8 GDP and the export performance of T&C in Korea 21
2.9 Wage rates and export performance of T&C in Korea 22
2.10 Trends in T&C exports in Asia and the Middle East 23
2.11 GDP and export performance of T&C in Asia and the
Middle East 24
2.12 Wage rates and export performance of T&C in Asia 24
2.13 Trends in T&C exports in Africa 25
2.14 GDP and export performance of T&C in Africa 26
2.15 Wage rates and export performance of T&C in Africa 27
2.16 Trends in T&C exports in Latin America and the Caribbean 28
2.17 GDP and export performance of T&C in Latin America and
the Caribbean 29
2.18 Wage rates and export performance of T&C in Latin America
and the Caribbean 29
3.1 Global market share of China’s T&C exports, 1986–2002 48
3.2 Trade competitive index of textiles and clothing, 1980–2005 49
3.3 Revealed comparative advantage index of T&C sectors 53
3.4 Regional market of Shandong Weiqiao Pioneering 89
4.1 Share of textiles exports 120
4.2 Textiles exports to major destinations 123
5.1 Growth rate of the EPZ (%) 149
5.2 Foreign direct investment in EPZ 150
6.1 International trade rules and innovation within the
T&C industry 198
6.2 Structure of Ghana’s textiles and garment industry, 1997 199
6.3 Textiles and clothing value added in manufacturing 200
6.4 Value of T&C composition in gross manufacturing output
in percentage 201
6.5 T&C growth in gross manufacturing output in percentages 202
6.6 Growth of textiles and clothing manufacturing value added 205
6.7 T&C manufacturing production growth rates (1977=100) 208
6.8 Price differences of textile prints in percentage with respect
to China 223
7.1 Share of the textiles sector in total manufacturing 235
7.2 Physical volume index (base year 1988) 236
7.3 Employment index (base year 1988) 237
7.4 Textiles imports in relation to textiles sector gross product 240
7.5 Evolution of labour productivity 245
7.6 Total factor productivity, textiles and total manufacturing,
1988–1995 245
7.7 Share of the clothing sector in total manufacturing 252
7.8 Physical volume index 253
7.9 Employment index 253
7.10 Imports in the clothing sector in relation to gross product 255
7.11 Evolution of labour productivity 258
7.12 Total factor productivity, clothing and total manufacturing,
1988–1995 258
2.2 GDP and export performance of T&C in first tier countries 16
2.3 Wage rates and export performance of T&C in first tier countries 17
2.4 Trends in T&C exports in second tier countries 18
2.5 GDP and export performance of T&C in second tier countries 19
2.6 Wage rates and export performance of T&C in second tier countries 20
2.7 Trends in T&C exports in Korea 20
2.8 GDP and the export performance of T&C in Korea 21
2.9 Wage rates and export performance of T&C in Korea 22
2.10 Trends in T&C exports in Asia and the Middle East 23
2.11 GDP and export performance of T&C in Asia and the
Middle East 24
2.12 Wage rates and export performance of T&C in Asia 24
2.13 Trends in T&C exports in Africa 25
2.14 GDP and export performance of T&C in Africa 26
2.15 Wage rates and export performance of T&C in Africa 27
2.16 Trends in T&C exports in Latin America and the Caribbean 28
2.17 GDP and export performance of T&C in Latin America and
the Caribbean 29
2.18 Wage rates and export performance of T&C in Latin America
and the Caribbean 29
3.1 Global market share of China’s T&C exports, 1986–2002 48
3.2 Trade competitive index of textiles and clothing, 1980–2005 49
3.3 Revealed comparative advantage index of T&C sectors 53
3.4 Regional market of Shandong Weiqiao Pioneering 89
4.1 Share of textiles exports 120
4.2 Textiles exports to major destinations 123
5.1 Growth rate of the EPZ (%) 149
5.2 Foreign direct investment in EPZ 150
6.1 International trade rules and innovation within the
T&C industry 198
6.2 Structure of Ghana’s textiles and garment industry, 1997 199
6.3 Textiles and clothing value added in manufacturing 200
6.4 Value of T&C composition in gross manufacturing output
in percentage 201
6.5 T&C growth in gross manufacturing output in percentages 202
6.6 Growth of textiles and clothing manufacturing value added 205
6.7 T&C manufacturing production growth rates (1977=100) 208
6.8 Price differences of textile prints in percentage with respect
to China 223
7.1 Share of the textiles sector in total manufacturing 235
7.2 Physical volume index (base year 1988) 236
7.3 Employment index (base year 1988) 237
7.4 Textiles imports in relation to textiles sector gross product 240
7.5 Evolution of labour productivity 245
7.6 Total factor productivity, textiles and total manufacturing,
1988–1995 245
7.7 Share of the clothing sector in total manufacturing 252
7.8 Physical volume index 253
7.9 Employment index 253
7.10 Imports in the clothing sector in relation to gross product 255
7.11 Evolution of labour productivity 258
7.12 Total factor productivity, clothing and total manufacturing,
1988–1995 258
List of Tables
A2.1 Sample countries 34
3.1 Gross output, import, and export value of the T&C industry 38
3.2 Output volume changes of the main T&C products 39
3.3 Domestic market share of T&C sectors, 1985–2005 40
3.4 Value added and labour productivity, 1993–2005 41
3.5 Productive elements of the textiles sector 42
3.6 Productive elements of the clothing sector 43
3.7 Import–export of China’s T&C product in 1999–2004
($100 mill.) 47
3.8 Trade competitiveness index of T&C industry in selected
countries 50
3.9 Trade competitiveness index of textiles sector in selected
countries 51
3.9A Trade competitiveness index of the clothing sector in selected
countries 51
3.10 RCA index of the T&C industry in selected countries 54
3.11 RCA index of the textiles sector 55
3.12 RCA index of the clothing sector 56
3.13 Comparison of chemical technology between 1983 and 2003 63
3.14 Share of combed yarn, non-shuttle cloth, and knotless yarn 64
3.15 Basic data of the Youngor group 74
3.16 Basic data of the Hongdou Corporation 80
3.17 The basic statistical data of the Changshan Textile Group 85
3.18 Employment and asset data of the Shandong Weiqiao
Pioneering Group 90
4.1 Employment in the textiles industry, 2004–05 103
4.2 World cotton production 113
4.3 Per capita availability of cloth 114
4.4 Textiles and garments exports at a glance from 1992–93 to
2005–06 115
4.5 Share of textiles items exported to total textiles exported 116
4.6 Annual growth rate of exports of textiles 118
4.7 Performance of the share of items in textiles exports 119
4.8 Share of textiles exports to total exports 120
4.9 Compound growth rate of the export of textiles 121
4.10 Export of all textile items in percentage terms – major
countries 123
4.11 Total textiles imports at a glance from 1992–93 to 2005–06 124
4.12 Compound growth rate of the imports of textiles 126
4.13 Case study firms 129
4.14 Financial performance of Ambattur Clothing Ltd 130
4.15 Financial performance of Gokaldas Exports Ltd 131
4.16 Financial performance of Arvind Mills 132
4.17 Financial performance of Indo Rama Synthetics 133
4.18 Compound growth rates of selected indicators for the firms (%) 134
A4.1 Overview of the textiles industry 136
A4.2 Market share of case study firms 138
5.1 Main economic indicators for the EPZ sector (selected years) 148
5.2 Investment in Madagascar from Mauritian TC companies 151
5.3 Textiles and clothing exports, 1984–2005 (MUR million) 152
5.4 Clothing exports by main destination, 1997–2005 152
5.5 Imports of yarn and fabrics (MUR million) 153
5.6 Imports of knitted and non-knitted garments
(MUR million CIF) 154
5.7 The distribution of TC sub-sectors in terms of number of
firms and employment 154
A5.1 Macroeconomic indicators for Mauritius, 2000–2004 183
A5.2 Existing investment schemes and their objectives 184
A5.3 SWOT analysis of the TC industry 186
A5.4 Profile of case studies 187
A5.5 List of abbreviations 191
A5.6 Composition of exports by main products 191
6.1 Share of textiles and apparel employment in manufacturing 203
6.2 Rate of capacity utilization in the T&C industry for
medium-sized and large firms (percentages) 207
6.3 Taxes on imports of some selected textiles and apparel
products 209
6.4 Value of US T&C imports from Ghana (’000 US dollars) 211
6.5 T&C trade relationships between Ghana and
the United States under AGOA (’000 US dollars) 211
6.6 Export performance of Ghana to the European Union
and vice versa 212
6.7 PSI on textiles and garments 215
6.8 Medium-technology content T&C products exports from
Ghana 215
6.9 Ghana’s trade performance in textiles with the world in
US million dollars at current prices 216
6.10 Ghana’s trade performance in clothing with the world in
US million dollars at current prices 216
6.11 Change in production capacity of four major textiles firms
(in million yards) 222
6.12 Changes in the delivery times of exports to the United States 224
A6.1 Profile of some textiles manufacturing companies in Ghana 227
A6.2 Profile of some apparel manufacturing companies in Ghana 227
7.1 Main features of the Uruguayan textiles sector 233
7.2 Share of the textiles sector in the total manufacturing sector 234
7.3 Share of manufacturing product in gross domestic product 235
7.4 Share of the various sub-sectors of the textiles industry in
gross product, value added, exports and employment 238
7.5 Import penetration during the period 1990–2001 240
7.6 Exports and export propensity of the textiles sector 242
7.7 Coverage ratio and regional orientation index 242
7.8 Composition of exports by type of fibre 244
7.9 Coverage ratio and regional orientation index of textile
products 244
7.10 Cost structure of the textiles sector, input–output matrix,
1997 246
7.11 Main features of the clothing sector 251
7.12 Importance of the clothing sector in total manufacturing 252
7.13 Exports and export propensity of the sector 255
7.14 Coverage rate and regional orientation index for the
clothing sector 256
7.15 Main export markets for clothing sector products 257
7.16 Cost structure of the clothing sector 259
7.17 Projects of national interest, 1992–1997 265
7.18 Projects of national interest, 1998–2001 267
7.19 Imports under the temporary admission regime
(US$ million) 269
7.20 Evolution of the rebate for textiles and clothing exports 270
A7.1 Objective of the projects promoted 288
3.1 Gross output, import, and export value of the T&C industry 38
3.2 Output volume changes of the main T&C products 39
3.3 Domestic market share of T&C sectors, 1985–2005 40
3.4 Value added and labour productivity, 1993–2005 41
3.5 Productive elements of the textiles sector 42
3.6 Productive elements of the clothing sector 43
3.7 Import–export of China’s T&C product in 1999–2004
($100 mill.) 47
3.8 Trade competitiveness index of T&C industry in selected
countries 50
3.9 Trade competitiveness index of textiles sector in selected
countries 51
3.9A Trade competitiveness index of the clothing sector in selected
countries 51
3.10 RCA index of the T&C industry in selected countries 54
3.11 RCA index of the textiles sector 55
3.12 RCA index of the clothing sector 56
3.13 Comparison of chemical technology between 1983 and 2003 63
3.14 Share of combed yarn, non-shuttle cloth, and knotless yarn 64
3.15 Basic data of the Youngor group 74
3.16 Basic data of the Hongdou Corporation 80
3.17 The basic statistical data of the Changshan Textile Group 85
3.18 Employment and asset data of the Shandong Weiqiao
Pioneering Group 90
4.1 Employment in the textiles industry, 2004–05 103
4.2 World cotton production 113
4.3 Per capita availability of cloth 114
4.4 Textiles and garments exports at a glance from 1992–93 to
2005–06 115
4.5 Share of textiles items exported to total textiles exported 116
4.6 Annual growth rate of exports of textiles 118
4.7 Performance of the share of items in textiles exports 119
4.8 Share of textiles exports to total exports 120
4.9 Compound growth rate of the export of textiles 121
4.10 Export of all textile items in percentage terms – major
countries 123
4.11 Total textiles imports at a glance from 1992–93 to 2005–06 124
4.12 Compound growth rate of the imports of textiles 126
4.13 Case study firms 129
4.14 Financial performance of Ambattur Clothing Ltd 130
4.15 Financial performance of Gokaldas Exports Ltd 131
4.16 Financial performance of Arvind Mills 132
4.17 Financial performance of Indo Rama Synthetics 133
4.18 Compound growth rates of selected indicators for the firms (%) 134
A4.1 Overview of the textiles industry 136
A4.2 Market share of case study firms 138
5.1 Main economic indicators for the EPZ sector (selected years) 148
5.2 Investment in Madagascar from Mauritian TC companies 151
5.3 Textiles and clothing exports, 1984–2005 (MUR million) 152
5.4 Clothing exports by main destination, 1997–2005 152
5.5 Imports of yarn and fabrics (MUR million) 153
5.6 Imports of knitted and non-knitted garments
(MUR million CIF) 154
5.7 The distribution of TC sub-sectors in terms of number of
firms and employment 154
A5.1 Macroeconomic indicators for Mauritius, 2000–2004 183
A5.2 Existing investment schemes and their objectives 184
A5.3 SWOT analysis of the TC industry 186
A5.4 Profile of case studies 187
A5.5 List of abbreviations 191
A5.6 Composition of exports by main products 191
6.1 Share of textiles and apparel employment in manufacturing 203
6.2 Rate of capacity utilization in the T&C industry for
medium-sized and large firms (percentages) 207
6.3 Taxes on imports of some selected textiles and apparel
products 209
6.4 Value of US T&C imports from Ghana (’000 US dollars) 211
6.5 T&C trade relationships between Ghana and
the United States under AGOA (’000 US dollars) 211
6.6 Export performance of Ghana to the European Union
and vice versa 212
6.7 PSI on textiles and garments 215
6.8 Medium-technology content T&C products exports from
Ghana 215
6.9 Ghana’s trade performance in textiles with the world in
US million dollars at current prices 216
6.10 Ghana’s trade performance in clothing with the world in
US million dollars at current prices 216
6.11 Change in production capacity of four major textiles firms
(in million yards) 222
6.12 Changes in the delivery times of exports to the United States 224
A6.1 Profile of some textiles manufacturing companies in Ghana 227
A6.2 Profile of some apparel manufacturing companies in Ghana 227
7.1 Main features of the Uruguayan textiles sector 233
7.2 Share of the textiles sector in the total manufacturing sector 234
7.3 Share of manufacturing product in gross domestic product 235
7.4 Share of the various sub-sectors of the textiles industry in
gross product, value added, exports and employment 238
7.5 Import penetration during the period 1990–2001 240
7.6 Exports and export propensity of the textiles sector 242
7.7 Coverage ratio and regional orientation index 242
7.8 Composition of exports by type of fibre 244
7.9 Coverage ratio and regional orientation index of textile
products 244
7.10 Cost structure of the textiles sector, input–output matrix,
1997 246
7.11 Main features of the clothing sector 251
7.12 Importance of the clothing sector in total manufacturing 252
7.13 Exports and export propensity of the sector 255
7.14 Coverage rate and regional orientation index for the
clothing sector 256
7.15 Main export markets for clothing sector products 257
7.16 Cost structure of the clothing sector 259
7.17 Projects of national interest, 1992–1997 265
7.18 Projects of national interest, 1998–2001 267
7.19 Imports under the temporary admission regime
(US$ million) 269
7.20 Evolution of the rebate for textiles and clothing exports 270
A7.1 Objective of the projects promoted 288