| ||
← "Who to believe" |
Return to Main Page
| "Cyberschool" →
March 09, 2005
You are on the invidual archive page of Free trade working too well. Click Simon World weblog for the main page.
|
Free trade working too well
Ask someone if they prefer cheaper clothes prices for the same quality product and the answer is obvious. Likewise the manufacturer who can produce the clothes at a cheaper price but still turn a profit. Especially happy should be the Governments of the manufacturing nation (all those extras jobs) and the consuming nations (all those happy voters/consumers). Alas, not always. On January 1st this year the world abolished quotas on textiles. China was expected to rapidly claim market share from other producers who had previously benefited from favourable quotas. And so it has been. In the extended entry is a chart from today's SCMP detailing China's textile exports to America and the EU. Some of the figures are stunning. From January 2004 to January 2005 China's exports of cotton trousers to the USA increased by 1,332% and of cotton knit shirts by 1,836%. Over the same period to the EU exports of jerseys expanded by 735% and blouses by 301%. At the same time the average unit cost of those jerseys and blouses fell by 36%. People are buying more for less. But it's not that simple. China is rightly petrified of protectionist action by the EU and America, with both domestic and international competitors wailing. The option exists for these countries to impose "safe-guard actions" to protect their domestic industries, which will re-impose quotas. But from the SCMP: Some industry executives, however, disputed that much had changed. They argue that with the scrapping of quota controls, firms that once disguised their China-made goods as Hong Kong, Macau or Taiwan exports are simply reporting the real country of origin.China has responded by introducing a new licensing system to track textile exports. The Government is alo considering imposing minimum prices on textile exports and a crackdown on textile exporters' violations of labour law. This last action should happen regardless, but that's for another post. It's a race to see who can impose the restrictions first: China or the EU/USA. So if you are wondering why your clothes were cheaper for a couple of months before they became more expensive again, this is the answer: because countries are competing over trade barriers, not on products and price. From the SCMP, EU and USA imports of Chinese made apparel.
Trackbacks:
TrackBack URL for this entry: http://blog.mu.nu/cgi/trackback.cgi/70301 Send a manual trackback ping to this post. Free Trade in Textiles Excerpt: From Simon World: Simon World :: Free trade working too well: "Ask someone if they prefer cheaper clothes prices for the same quality product and the answer is obvious. Likewise the manufacturer who can produce the clothes at a cheaper price but still ... Weblog: Brad DeLong's Website Tracked: March 10, 2005 03:40 AM Textile Trade Working Too Well Excerpt: The textile quotas expired on January 1st and free trade is working too well. Look for protectionism to flare up soon.... Weblog: Exploit the Worker Tracked: March 10, 2005 05:39 AM Simon sez Excerpt: Simon sez: Ask someone if they prefer cheaper clothes prices for the same quality product and the answer is obvious. Likewise the manufacturer who can produce the clothes at a cheaper price but still turn a profit. Especially happy should be the ... Weblog: The Flemish Beerdrinker. Ivan's weblog. Tracked: March 13, 2005 06:00 PM
Comments:
Over the past few years more than two million jobs were lost in the Chinese textile industry. Cause? Rising productivity. Chinese employment could however increase again if output were to grow more than productivity. So exporting more textiles goods would help to stop job loss in the Chinese textile industry. But what about jobs over here then? Well, we are richer than China. We have a better working labor markets. We have unemployment insurance and we can retrain workers so that they can get other jobs. And of course there is the global economic effect of cheaper imports of textiles. Free trade here really is win-win. For Western consumers, and for Chinese workers. posted by: ivan on 03.10.05 at 06:10 PM [permalink] |
|