Change, Challenge, and China: an Analysis of Competition in the North American Textile and Apparel Industries

  • Katrina D. Connolly
Keywords: free trade, China, textiles, apparel, North American Free Trade Agreement, NAFTA, Agreement on Textiles and Clothing, ATC, trade liberalization, World Trade Organization, WTO

Abstract

Media, manufacturers, and politicians are blaming China for intensified competition, downward pressure on prices and job loss in the U.S. manufacturing sector. A brief history of textile and apparel trade suggests that people over-reacted to a surge of Chinese imports in 2005 because of a historical focus on defining single countries as threats to domestic markets. Approaching trade policy from a broader perspective reveals that bilateral thinking overstates China as a threat. A broader approach studies how trade policies interact to create changes in market prices rather than a single country. To illustrate these effects, an economic analysis of the North American Free Trade Agreement first explains how this regional trade policy bolstered higher prices and demand for North American textile and apparel products. Economic models then explain how a global policy that liberalized trade, Agreement on Textiles and Clothing, undermined NAFTA's benefits and enhanced the competitive pressure perceived by these manufacturers. The article concludes that as one of many countries liberalized by the ATC, China plays a smaller role than the public assumes in diminishing NAFTA's benefits as perceived by North American textile and apparel manufacturers.

Author Biography

Katrina D. Connolly
Katrina D. Connolly is a second-year doctoral student at The George Washington University School of Public Policy and Public Administration. She explores her interest in the making and impact of public policies in a globalizing world within her concentration of international urban policy. She currently works as a research assistant for Professor Michael Wiseman. She received a B.A. in International Studies from Emory University in 2003. The author would like to thank Dr. Judith Dean for guidance in initial research, Professor John Forrer for big-picture discussions, and Professor Jill Kasle for her writing expertise. She would also like to thank the student editors for their diligent work and thoughtful suggestions: Jessy Defenderfer, Scott Olson, Christine Brown, and Hayley Trakas.
Published
2007-05-01
Section
Articles