Policy Change Impacts

Central America in Manufacturing Global Value Chains (GVCs)

This research uses the global value chain (GVC) framework to analyze Central America’s participation in global manufacturing value chains, to understand the region’s competitiveness drivers and to evaluate potential risks to continued participation if US trade policies were to change. Central America’s entry into manufacturing GVCs has been through the insertion in various chains including apparel, wire harnesses (automotive) and medical devices. These sectors span low-, medium-, and high-tech manufacturing. They are important contributors to the region’s export basket, and the US is central to their trade. To understand how the region operates in these manufacturing sectors, this report analyzes the participation of select countries in each of the three value chains: apparel (El Salvador, Guatemala, Honduras, and Nicaragua), wire harnesses (Honduras and Nicaragua) and medical devices (Costa Rica and Dominican Republic).

Bahrain’s Position in the Global Apparel Value Chain: How the U.S.-Bahrain FTA and TPLs Shape Future Development Options

This report analyzes the situation and potential future outcomes of Bahrain’s apparel industry in light of the upcoming TPL expiration in July 2016.

Regional trade agreements and export competitiveness: the uncertain path of Nicaragua’s apparel exports under CAFTA

The Central American Free Trade Agreement (CAFTA) has been a mixed blessing for economic development. While exports to the US economy have increased, dependency may hinder economic growth if countries do not diversify or upgrade before temporary provisions expire. This article evaluates the impact of the temporary Tariff Preference Levels (TPLs) granted to Nicaragua under CAFTA and the consequences of TPL expiration. Using trade statistics, country- and firm-level data from Nicaragua’s National Free Zones Commission (CNZF) and data from field research, we estimate Nicaragua’s apparel sector will contract as much as 30–40% after TPLs expire. Our analysis underscores how rules of origin and firm nationality affect where and how companies do business, and in so doing, often constrain sustainable export growth.

Nicaragua and the Apparel Value Chain in the Americas: Implications for Regional Trade and Employment

The textile and apparel value chain has changed rapidly in the past decade. In the context of trade liberalization and the phase-out of the global quota regime, textile and garment production has become more concentrated in a smaller set of countries, with Asian exporters such as China, Bangladesh and Vietnam claiming an increasing share of the world import market. At the same time, preferential trade agreements have become more important in maintaining textile and apparel production in the western hemisphere. With the looming expiration of the Tariff Preference Levels (TPLs) granted to Nicaragua under the Central American Free Trade Agreement (CAFTA), trade policy is at a critical juncture. This report explores these issues by examining how textile and apparel manufacturers in the Americas are linked to the value chains coordinated by U.S. importers. Our key finding is that all segments of the textile and apparel value chain in the Americas—U.S. yarn and fabric manufacturers as well as apparel producers in the CAFTA region—benefit from measures, such as the TPL one-to-one benefit, that encourage importers to maintain or expand their sourcing in the western hemisphere.

Developments in the Global Apparel Industry after the MFA Phaseout

Stacey Frederick and Cornelia Staritz wrote 10 chapters in the following World Bank book: Sewing Success? Employment, Wages, and Poverty following the End of the Multi-fibre Arrangement, p. 41-86 and pp. 211-497 in G. Lopez-Acevedo & R. Robertson (Eds.), Washington, DC: The World Bank. Chapter 3 introduces dynamics in the global apparel value chain with a focus on the impacts of the lifting of the Multi-fibre Arrangement on Textiles and Clothing (MFA/ATC) and the global economic crisis in nine countries. A detailed analysis of each country is in Part 2 of the book. Countries include Bangladesh, Cambodia, Honduras, India, Mexico, Morocco, Pakistan, Sri Lanka and Vietnam.

Strengthening Nicaragua’s Position in the Textile-Apparel Value Chain: Upgrading in the Context of the CAFTA-DR Region

This study examines the competitiveness of the textile-apparel sector in Nicaragua, with the objective of producing a diagnosis of the textile – apparel industry in Nicaragua and the United States, an assessment of the opportunities and obstacles to upgrading, and concrete proposals for steps to be taken in the short and medium term. The research team from Duke-CGGC carried out field research in Nicaragua between September 30 and October 12, 2010, which included interviews with 19 textile and apparel companies in the country, as well as interviews with numerous governmental, labor, and other institutional actors connected with the industry. The results of this fieldwork, and extensive statistical and background analysis, are presented in this report.

The Global Apparel Value Chain, Trade and the Crisis: Challenges and Opportunities for Developing Countries

This paper commissioned by the World Bank analyzes the recent evolution and impact of the global economic crisis on the apparel industry.

Protectionism in Textiles and Apparel

Chapter in Effective Crisis Response and Openness: Implications for the Trading System, p. 321-344 in Simon Evenett, Bernard Hoekman, and Olivier Cattaneo (eds.), Washington, DC and London: The World Bank and the Centre for Economic Policy Research (CEPR).

Review and Analysis of Protectionist Actions in the Textile and Apparel Industries

Publication details: Book Chapter: The Fateful Allure of Protectionism: Taking Stock for the G8.Pp. 65-68 in Simon Evenett, Bernard Hoekman, and Olivier Cattaneo (eds.), Washington, DC and London: The World Bank and the Centre for Economic Policy Research (CEPR).