Free Trade and Uneven Development: The North American Apparel Industry after NAFTA

By Gary Gereffi; David Spener et al. | Go to book overview

13 Fragmented Markets, Elaborate Chains:
The Retail Distribution of Imported
Clothing in Mexico

Jorge Mendoza, Fernando Pozos Ponce, and David Spener

Since the beginning of its opening to international trade in 1986, the Mexican economy has undergone a series of transformations. Some of these arose as a consequence of the continuation of the financial crisis that erupted in 1982. Others were the result of Mexico’s new relationship to the world economy in general and with the United States and Canada in particular. Mexico’s reinsertion into the world economy called into question the patterns of production, distribution, and service provision that prevailed during its importsubstitution period. For this reason many entrepreneurs, some with experience in the international market and others who were complete novices, developed new strategies to keep their enterprises competitive during an uncertain period of economic restructuring that continues to this day. Many manufacturers underwent radical restructuring in response to the new productive and marketing challenges, while others simply could not meet the competitive challenge and closed their doors, contributing to soaring unemployment levels during the peak years of the crisis in the mid1980s (Calva 1996). Other firms abandoned manufacturing but survived by converting themselves into distributors of the foreign imports that flooded the Mexican market during these years. Moving to the sale of these products offered greater short-term profits to such firms and avoided the problems inherent in upgrading their manufacturing processes. In fact, three of every ten small-to-medium-scale enterprises in Mexico switched from manufacturing to the distribution of imported manufactures, a move that typically involved a reduction in employment in these firms (Pozos 1996a, 130).

The garment industry has been transformed by the globalization of markets and productive restructuring in Mexico. Since 1988 it has gone from being an industry featuring moderate growth and exports to one undergoing dramatic expansion, especially in the exportoriented sector, such that Mexico has replaced the Asian countries as the leading exporter of garments to the United States (Gereffi 1997, Table 1; Ramzy Casab, president of the Cámara Nacional del Vestido, cited in Ocho columnas 1996). At the same time clothing consumption in Mexico grew substantially, from around U.S.$9.2 billion in 1988 to U.S.$12.2 billion in 1992. A substantial portion of this increased

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