By Constance Gustke & Evan Clark
This is the age of Asia, including in apparel production. Indonesia, Cambodia and especially China are winning business away from Central America at an impressive clip. Even the passage of the Central American Free Trade Agreement last year, which lowers barriers to commerce, cannot stem the tide. So far, CAFTA has had minimal impact. For example, Mexico, which once had favorite apparel-making status, saw its business slip 13 percent in the 12-month period ending May 31. El Salvador and the Dominican Republic also have had double-digit dips.
1) China
Square meter equivalents: 5.6 billion, up 38 percent
China is a perfect combination of business essentials: 1.3 billionpeople, a government focused on building effective infrastructure and the elimination of key global export restraints in 2005. When fashion executives talk about narrowing their supplier base, they often mean moving more production to China. Eventually, the county may account for more than half of all imported fashion, many experts believe. Life isn't all free and easy, though. Quotas on 34 types of U.S. apparel and textile imports will still restrain trade through the end of 2008.
2) Mexico
SME: 1.6 billion, down 13 percent
Spurred by the 1993 North American Free Trade Agreement that knocked down trade barriers, U.S. apparel producers started heading south of the border for Mexico's cheaper labor. Now, major manufacturers are increasingly eyeing Asia's even lower costs, draining business fromMexico despite NAFTA and a proximity to the U.S. market. However, Mexico is still the largest producer of jeans shipped to the U.S. and has carved out a niche in man-made fibers.
3) Bangladesh
SME: 1.2 billion, up 18 percent
A poor, overpopulated country smaller than Iowa, Bangladesh endures floods each monsoon season that inundate one-third of its land, restricting economic development. Nearly two-thirds of the country's 147million inhabitants work in agriculture, though the apparel manufacturing business has boomed. About 68 percent of Bangladesh's apparel imports into the U.S. are goods made of cotton, with particular strength in underwear and men's and boys' non-knit shirts.
4) Honduras
SME: 1.17 billion, down 6 percent
Like Mexico, apparel manufacturers in Honduras have lost business as U.S. brands shift production to Asia. But there's hope CAFTA will eventually give Honduras a leg up in the U.S. market. Shipments of cotton apparel, which make up the lion's share of U.S. apparel imports,are down 6.6 percent year-over-year.
5) Indonesia
SME: 880 million, up 18 percent
Eliminating apparel quotas in January 2005 proved to be a big boonto manufacturers in Indonesia, where cotton apparel imports to the U.S. jumped by nearly 50 percent last year. The economy of this formerDutch colony composed of 17,508 islands, which won its independence after being occupied by Japan in World War II, was dealt a setback bythe Asian financial crisis in the late Nineties. The country still struggles with an 11.8 percent unemployment rate and poor infrastructure.
6) Vietnam
SME: 873 million, up 10 percent
One of the few countries still restrained by apparel quotas, Vietnam's imports into the U.S. have still continued to grow. They are expected to rise further once the country's bid to join the World Trade Organization is successful and quotas are finally dropped for the Communist country. The Senate Finance Committee earlier this week passeda bill to give Vietnam permanent normal trade relations status, but several senators are threatening to block the legislation when it comes to the full Senate.
7) India
SME: 837 million, up 21 percent
With its population of 1.1 billion, India has a sufficient labor pool to grab a larger portion of the apparel market. But poor infrastructure and strict factory regulations have kept the country somewhat in the wings compared with China. Still, India has increased its imports to the U.S. in the post-quota world with nearly across-the-board gains.
8) Cambodia
SME: 786 million, up 19 percent
After decades of strife, this former French protectorate is finally enjoying peace. In 1999, Cambodia signed a textile agreement with the U.S. that boosted its economy by tying improved conditions in its apparel factories to greater access to the U.S. market. Forced by theexpiration of global quotas in 2005 to compete head-to-head with theworld, Cambodian producers have fared better than some experts predicted. The upshot: over 30 percent growth in U.S. imports of man-made fiber apparel in the year ending May 31 and double-digit gains in cotton apparel.
9) El Salvador
SME: 760 million, down 14 percent
Smaller than Massachusetts and home to 6.8 million people, El Salvador has seen broad declines in its apparel imports to the U.S., mostof which are made of cotton. On March 1, the country implemented CAFTA, which offers relatively unfettered access to the U.S. market and is intended, in part, to make the country more attractive to U.S. brands.
10) Dominican Republic
SME: 655 million, down 16 percent
While situated in the Caribbean, the Dominican Republic is permitted to join CAFTA although it has yet to enact the pact. Like CAFTA countries, the Dominican Republic has seen its primary apparel imports to the U.S., made of cotton and man-made fiber, fall in the face of increased Asian competition.
11) Hong Kong
SME: 629 million, down 3 percent
The tiny country, only six times larger than Washington, D.C., is under the administrative control of China. With the quota regime thatexpired last year, Hong Kong businesses worked hand in glove with their Chinese counterparts. In what was known as outward processing, Hong Kong companies constructed garments from pieces made on the Mainland, so they would be recognized as originating in Hong Kong when shipped to the U.S. A new regime of quotas on 34 types of apparel and textiles from China have recently helped prop up business in Hong Kong.
12) Pakistan
SME: 610 million, up 12 percent
Pakistan wants to become a bigger apparel player to alleviate the poverty that afflicts many of the country's 166 million inhabitants. Last year, cotton apparel imports into the U.S. were up, though man-made fiber apparel imports decreased. According to WWD, Pakistani officials plan to strengthen the country's transportation system and expand its largest seaport by an undisclosed date to take better advantage of its neighbors' booming business in central Asia and western China.
Sources: U.S. Commerce Department and Central Intelligence Agency.
