Magazine article International Trade Forum

Textiles and Garments. (Market Profile)

Magazine article International Trade Forum

Textiles and Garments. (Market Profile)

Article excerpt

The textile sector represents around 25% of LDCs' total exports. Bangladesh alone accounts for more than 75% of textile exports, to the value of US$ 4 billion.

LDC products: low-price garments in a higher-quality market

In clothing as in cotton fabrics, the LDCs tend to focus on exporting standard products such as T-shirts, men's shirts, and woven and printed fabrics, for which price is the main determinant of success and in-depth knowledge of fashion and design trends is not essential. However, in recent years a change has been taking place in the developed markets, away from cheap imports towards better-finished, higher-quality casual fashion and more individual clothing, the opposite of LDC garment exports.

Success: up the value chain

Nevertheless, Bangladesh has a number of 'champion' export products (i.e., achieving high growth in a dynamically expanding market), particularly women's knitwear. Haiti, another example of a textile-exporting LDC, has been doing very well with exports of cotton T-shirts and women's clothing. Its garment exporters are increasingly exporting sophisticated items like high-quality suits, jackets and branded items. This has helped them to penetrate Japan's extremely quality-conscious market.

Bangladesh has shown that it is possible to move successfully up the value chain by exporting finished products. In 1999, it was by far the largest single LDC exporter of finished, woven fabrics with 85% cotton or more, weighing up to 200 g/[m.sup.2].

Production moving to lower-cost countries

Labour shortages and rising costs of labour have forced even the leading Asian producing and exporting countries, such as India and the Republic of Korea, to move their production facilities to lower-cost countries (Bangladesh, Cambodia, Lesotho, Madagascar or Nepal), as well as to offshore processing zones in China.

The result is that the major world exporters are also becoming major importers, buying intermediate inputs to produce the products in which they specialize.

A new structure of the world textile trade is taking place, based on specialization. As different products are moved backwards and forwards across the value chain, competition between exporters is becoming increasingly fierce. …

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