The End of Apparel Quotas: A Faster Race to the Bottom?

The right to organize is the worker's most effective weapon against exploitative conditions. Yet the global “race to the bottom” has turned the weapon of unionizing – and the anti-sweatshop struggle overall – into a double-edged sword. If workers organize they are likely to lose their jobs, as corporations pursue factories where unions are forbidden and cheap labor is therefore guaranteed. But if workers do not organize, their rights will continue to be violated. These conditions pose a significant challenge for the anti-sweatshop movement – a challenge that will increase with the end of apparel quotas. This paper begins by reviewing the impact of the Multifiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC) – two regulatory frameworks that have governed global trade in these commodities for 30 years. This regulatory framework came to an end on January 1, 2005 with the WTO-mandated end of textile and apparel import quotas. A large body of research on the probable result of the end of the quota system concludes that a small number of countries (and primarily China) are likely to be the chief beneficiaries of the end of quotas, while a large number of countries are likely to suffer significant declines in their apparel and textile export industries. The paper discusses two trends which are transforming the nature of global trade in textiles and apparel (indeed, in all consumer goods): The rise of giant retailers as the key actors in the global supply chain, and the rise of giant transnational contractors – based mainly in East Asia – that are emerging as its chief suppliers. The paper concludes with a discussion of what countries can do to mitigate the impact of the end of quotas on their textile and apparel industries, as well as some suggestions for the anti-sweatshop movement.