![handle is hein.tera/crser0161 and id is 1 raw text is: Order Code RS20436
Updated February 1, 2002
Textile and Apparel Trade Issues
Bernard A. Gelb
Specialist in Industry Economics
Resources, Science, and Industry Division
Summary
Because of their importance to the U.S. economy and to many trade partners of the
United States, textiles and apparel have been major issues in U.S. trade relations with a
number of countries and regions. In attempts to resolve conflicts between the interests
of exporters and importers, a number of agreements (multilateral and bilateral) have been
signed over the years bearing on, and generally restricting, the quantities of textiles and
apparel traded. Developing countries, whose exports have been limited, believe that
developed countries have unfairly delayed import liberalization, and continue to press for
accelerated implementation of the phase-out of quotas. Congress eased trade terms on
textiles and apparel from Caribbean and sub-Saharan nations in its latest move to boost
economic growth in poorer regions. This report will be updated as events warrant.1
The Economics of Textile and Apparel Production and Trade
Textile and apparel manufacture, and international trade in those products, have been
important elements of economic activity and growth since the Industrial Revolution.
Major reasons are (1) textiles and apparel are basic items of consumption in all countries,
and (2) textile and apparel manufacture - particularly apparel- is labor-intensive, requiring
relatively little fixed capital for entrepreneurs to establish production facilities. Thus, these
industries are major generators of employment. Modest capital requirements contributed
to textiles and apparel being among the major industries at the start of the Industrial
Revolution and being important to developing countries now. The share of total
manufacturing value added accounted for by textile and apparel production among
developing countries was more than double that for industrialized countries in 1995.2
Lower wage rates in developing countries together with the labor-intensiveness of
textile and apparel manufacture tend to give developing countries a comparative advan-
1 CRS analyses and references to CRS reports on a wide variety of trade issues can be found in
CRS's electronic briefing book on trade [http://www.congress.gov/brbk/html/ebtral.html.]
2 United Nations, Industrial Development Organization. International Yearbook of Industrial
Statistics 1999. Vienna: 1999. p. 57. 1995 is the latest year of such data for developing countries.
Congressional Research Service °0° The Library of Congress
CRS Report for Congress
Received through the CRS Web](ViewImageLocal?handle=hein.tera/crser0161&div=1&collection=&method=preview&ext=.png&size=3)
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