View full report - Fibre2fashion

2.2 The Global Industry – post-2005
The termination of quotas, which related to the Agreement on Textiles and Clothing (ATC)
took place on 1 January 2005, when all the reservations and limits it contained ended, the
objective being to integrate the clothing and textile industries. International buyers are
now able to reduce the number of their international suppliers, and can act on a
preference to buy from suppliers offering the cheapest price on international orders.
Various policies in ATC were put in place to preclude discrimination against imports, and to
ensure that all members practise fair and equitable trading conditions. Mayer (2004)
argues that the ATC will, in due course, increase global socio-economic welfare, as
resource allocation becomes more efficient and further reduces the price of products,
which will benefit consumers.
According to a 2005 report from the International Labour Office (ILO), textiles and clothing
currently represent about 7 per cent of total world exports. It is estimated that developing
countries account for three-quarters of world clothing. According to the same report, a
largely female workforce predominates in the global clothing industry. It estimates that in
countries such as Bangladesh, 80% of the workforce consists of women, with 82% in Sri
Lanka and 89% in Cambodia. In Africa, women dominate the labour demographic in the
clothing industry but in India, there are fewer than 50% women employed in this sector
(Sajhau, 2005:7).
Several countries, including the United States, South Africa and those in the European
Union, feel that the post-ATC environment will see an increase in cheaper clothing flooding
their domestic markets: “Job losses and plant closures are expected to accelerate” after
2005 (Sajhau, 2005:10).
The ending of quotas has caused concern in terms of its consequences for global
unemployment and factory closures in the clothing and textile industries in both the
developed and developing countries. Although job losses in one country may enable jobs
to be gained in another, the competition to lower production costs has resulted in
developing countries competing with each other for global orders. Reports by the
International Trade Union in December 2005 estimate that one-million jobs will be lost in the
next five years in the European Union alone. In the US, between September 2004 and
September 2005, some 25 000 jobs were lost in the garment industry (International Trade
Union Report, 2005: 9).
12