NAFTA and the apparel commodity chain: Corporate strategies, interfirm networks, and industrial upgrading

The apparel industry is one of the oldest and largest export industries in the world, with global trade and production networks that connect firms and workers in countries at all levels of economic development. This chapter examines the impact of the North American Free Trade Agreement (NAFTA) as one of the most recent and significant developments to affect patterns of international trade and production in the apparel and textile industries. Tr ade policies are changing the institutional environment in which firms in this industry operate, and companies are responding to these changes with new strategies designed to increase their profitability and strengthen their control over the apparel commodity chain. Our hypothesis is that lead firms are establishing qualitatively different kinds of regional production networks in North America from those that existed prior to NAFTA, and that these networks have important consequences for industrial upgrading in the Mexican textile and apparel industries. Post-NAFTA crossborder production arrangements include full-package networks that link lead firms in the United States with apparel and textile manufacturers, contractors, and suppliers in Mexico. Full-package production is increasing the local value added provided by the apparel commodity chain in Mexico and creating new opportunities for Mexican firms and workers. The chapter is divided into four main sections. The first section uses trade and production data to analyze shifts in global apparel flows, highlighting the emergence and consolidation of a regional trade bloc in North America. The second section discusses the process of industrial upgrading in the apparel industry and introduces a distinction between assembly and full-package production networks. The third section includes case studies based on published industry sources and strategic interviews with several lead companies whose strategies are largely responsible for the shifting trade patterns and NAFTA-inspired cross-border production networks discussed in the previous section. The fourth section considers the implications of these changes for employment in the North American apparel industry. © 2009 by Temple University Press. All rights reserved.

NAFTA and uneven development in the North American apparel industry

The various contributions to this book have documented how NAFTA-inspired firm strategies are changing the geography of apparel production in North America. The authors show in myriad ways how companies at different positions along the apparel commodity chain are responding to the new institutional and regulatory environment that NAFTA creates. By making it easier for U.S. companies to take advantage of Mexico as a nearby low-cost site for export-oriented apparel production, NAFTA is deepening the regional division of labor within North America, and this process has consequences for firms and workers in each of the signatory countries. In the introduction to this book we alluded to the obvious implications of shifting investment and trade patterns in the North American apparel industry for employment in the different countries. In this concluding chapter we focus on Mexico in the NAFTA era, specifically the extent to which Mexico's role in the North American economy facilitates or inhibits its economic development. W e begin with a discussion of the contemporary debate about Mexico's development, which turns on the question of how to assess the implications of Mexico's rapid and pro-found process of economic reform. Second, we focus on the textile and apparel industries as sectors that have been significantly affected by changes in regulatory environments at both the global and regional levels. Third, we examine the evidence regarding Mexico's NAFTA-era export dynamism, and in particular we emphasize the importance of interfirm networks, both for making sense of Mexico's meteoric rise among apparel exporters and for evaluating the implications of this dynamism for development. Fourth, we turn to a consideration of the national political-economic environment that shapes developmental outcomes for all Mexicans. Although regional disparities within Mexico are profound, aspects of government policy, such as management of the national currency, and characteristics of the institutional environment, such as industrial relations, have nationwide effects, and critics of NAFTA charge that these factors are contributing to a process of economic and social polarization that is ever more evident (Morales 1999; Dussel Peters 2000). Finally, we suggest that the mixed consequences of Mexico's NAFTA-era growth can be taken as emblematic of the contradictions that the process of globalization poses for economic and social development. The anti-sweatshop campaign in North America is one example of transnational or crossborder movements that are emerging to address the negative consequences of this process. In bringing attention to the problem of sweatshop production in North America, activists are developing strategies that rely on a network logic that is not dissimilar to the approaches reflected in the various chapters of this book. © 2009 by Temple University Press. All rights reserved.

Quantitative pathways for Northeast Atlantic fisheries based on climate, ecological–economic and governance modelling scenarios

Here we present quantitative projections of potential futures for ecosystems in the North Atlantic basin generated from coupling a climate change-driven biophysical model (representing ecosystem and fish populations under climate change) and a scenario-driven ecological–economic model (representing fleets and industries under economic globalization). Four contrasting scenarios (Baseline, Fortress, Global Commons, Free Trade) were defined from the perspective of alternative regional management and governance of the oceanic basin, providing pathways for the future of ecosystems in the Northeast Atlantic basin by 2040. Results indicate that in the time frame considered: (1) the effects of governance and trade decisions are more significant in determining outcomes than the effects of climate change alone, (2) climate change is likely to result in a poleward latitudinal shift of species ranges and thus resources, with implications for exploitation patterns, (3) the level of fisheries regulation is the most important factor in determining the long term evolution of the fisheries system, (4) coupling climate change and governance impacts demonstrates the complex interaction between different components of this social–ecological system, (5) an important driver of change for the future of the North Atlantic and the European fishing fleets appears to be the interplay between wild fisheries and aquaculture development, and finally (6) scenarios demonstrate that the viability and profit of fisheries industries is highly volatile. This study highlights the need to explore basin-scale policy that combines medium to long-term environmental and socio-economic considerations, and the importance of defining alternative sustainable pathways.

The Terror that Underpins the “Peace”: The Political Economy of Colombia's Paramilitary Demobilization Process

Studies on terrorism have traditionally focused on non-state actors who direct violence against liberal states. These studies also tend to focus on political motivations and, therefore, have neglected the economic functions of terrorism. This article challenges the divorce of the political and economic spheres by highlighting how states can use terrorism to realise interconnected political and economic goals. To demonstrate this, we take the case of the paramilitary demobilisation process in Colombia and show how it relates to the US-Colombian free trade agreement. We argue that the demobilisation process fulfils a dual role. First, the process aims to improve the image of the Colombian government required to pass the controversial free trade agreement through US Congress to protect large amounts of US investment in the country. Second, the demobilisation process serves to mask clear continuities in paramilitary terror that serve mutually supportive political and economic functions for US investment in Colombia.

A review of the global pesticide legislation and the scale of challenge in reaching the global harmonization of food safety standards

Pesticide use is important in agriculture to protect crops and improve productivity. However, they have the potential to cause adverse human health or environmental effects, dependent on exposure levels. This review examines existing pesticide legislation worldwide, focusing on the level of harmonisation, and impacts of differing legislation on food safety and trade. Pesticide legislation varies greatly worldwide as countries have different requirements guidelines and legal limits for plant protection. Developed nations have more stringent regulations than developing countries, which lack the resources and expertise to adequately implement and enforce legislation. Global differences in pesticide legislation act as a technical barrier to trade. International parties such as the European Union (EU), Codex Alimentarius Commission (Codex), and North American Free Trade Agreement (NAFTA) have attempted to harmonise pesticide legislation by providing maximum residue limits (MRLs), but globally these limits remain variable. Globally harmonised pesticide standards would serve to increase productivity, profits and trade, and enhance the ability to protect public health and the environment. 

The International Regulatory Regime on Capital Flows

Capital controls and exchange restrictions are used to restrict international capital flows during economic crises. This paper looks at the legal implications of these restrictions and explores the current international regulatory framework applicable to international capital movements and current payments. It shows how international capital flows suffer from the lack of a comprehensive and coherent regulatory framework that would harmonize the patchwork of
multilateral, regional, and bilateral treaties that currently regulate this issue. These treaties include the Articles of Agreement of the International Monetary Fund (IMF Articles), the General Agreement on Trade in Services (GATS), free-trade agreements, the European Union treaty, bilateral investment treaties, and the Organization for Economic Co-operation and Development (OECD) Code of Liberalization of Capital Movements (OECD Code of Capital Movement). Each
of these instruments regulate differently capital movements with little coordination with other areas of law. This situation sometimes leads to regulatory overlaps and conflict between different sources of law. Given the strong links between capital movements and trade in services, this paper pays particular attention to the rules of the GATS on capital flows and discusses the policy space available in the GATS for restricting capital flows in times of crisis.

Memorial of citizens of Chesterfield, Marlborough, and Darlington, assembled at Cheraw in South Carolina, against a further increase of duties on imported articles, February 4, 1828 : referred to the Committee of the Whole House on the state of the Union

This document contains a memorial, which was written by the citizens of Chesterfield, Marlborough, and Darlington, assembled in the town of Cheraw, on July 25, the 25, 1827 in the state of South Carolina who were engaged in agriculture and commerce and presented it to oppose the tariff increase. It was presented to the Congress of the United States.

Portuguese footwear

This case study deals with the reasons why the Portuguese Footwear Cluster evolved from a small industry focused on the Portuguese internal market into a high-tech industry capable of designing and producing some of the best and most expensive shoes in the world. It went from using the low labor costs of an under-developed economy to produce long series of shoes for pre-designated brands in Northern Europe to having the ability to produce some of the highest quality shoes in the world, in small orders, designed and delivered in record timing, while offering a service of excellence. In 1960, when Portugal became a founding member of EFTA, the footwear industry in Portugal was globally irrelevant, producing low quality shoes directed to the puny internal market and its African colonies. The new free trade zone with economies much more developed that itself, led to the transfer of the labor-intensive, low skilled manufacture from the UK and Scandinavian countries to Portugal. Mostly through joint ventures, the industry was able to mechanize itself so it could produce shoes in long series at low prices. It grew based on that model up until the 1990s, when the emergence of the Asian countries meant either a different strategy or extinction. Taking advantage of a clarified leadership of its trade association, it used the European funds made available to it during the 1990s, to modernize its factory floors, so it could become more nimble and flexible, expand its design capabilities and dramatically change its image abroad. The role of the trade association, APICCAPS, was instrumental throughout the process going well beyond what came to be expected of trade associations. It used its privileged position to provide understanding regarding the current situation and competitive landscape, alerting for changes ahead and at the same time providing a strategic vision on how to deal with the challenges. Moreover, it helped companies get the resources they needed by creating a research center in collaboration with a University, by creating a process that allowed companies to learn from each other via the show casing of projects sponsored by the association or by helping industrials traveling to locations where new customers could be found. The case study provides insight on how the trade association leadership, which has no formal authority over its members, was able to guide and motivate an industry through a consistent positive approach. That approach focused on the solutions, on the opportunities and on the success stories of companies in the cluster rather than on what was wrong or needed to be addressed. Based on this case, one could use the leadership role of the trade association to discuss and change leaders’ roles and styles in other sectors or even companies.

Multinational drug corporations, intellectual property rights and the Canadian state : a historical and critical analysis

This study critically analyzes the historical role and influence of multinational drug cotpOrations and multinational corporations in general; the u.s. government and the Canadian state in negotiating the global recognition ofIntellectual Property Rights (IPR) under GATT/NAFTA. This process began in 1969 when the Liberal government, in response to high prices for brand-name drugs amended the Patent Act to introduce compulsory licensing by reducing monopoly protection from 20 to seven years. Although the financial position ofthe multinational drug industry was not affected, it campaigned vigorously to change the 1969 legislation. In 1987, the Patent Act was amended to extend protection to 10 years as a condition for free trade talks with the u.s. Nonetheless, the drug industry was not satisfied and accused Canada of providing a bad example to other nations. Therefore, it continued to campaign for global recognition ofIPR laws under GATT. Following the conclusion of the GATTI Trade-Related aspects of Intellectual Property Rights agreement (TRIPS) in 1991, the multinational drug industry and the American government, to the surprise of many, were still not satisfied and sought to implement harsher conditions under NAFTA. The Progressive Conservative government readily agreed without any objections or consideration for the social consequences. As a result, Bill C-91 was introduced. It abandoned compulsory licenses and was made retroactive from December 21, 1991. It is the contention of this thesis that the economic survival of multinational corporations on a global scale depends on the role and functions of the modem state. Similarly, the existence of the state depends on the ideological-political and socioeconomic assistance it gives to multinational corporations on a national and international scale. This dialectical relation of the state and multinational corporations is explored in our theoretical and historical analysis of their role in public policy.

A crisis of social democracy : organized labour and the NDP in an era of neoliberalism

The NDP was founded out of the ashes of the Co-Operative Commonwealth Federation to cooperate with the Canadian Labour Congress to become the 'political arm of organized labour' in Canada. The NDP has long claimed they are the party which represents the policy goals of organized labour in Canada: that the NDP alone will fight for trade union rights, and will fight for Canadian workers. Divergent Paths is an examination of the links between the labour movement and the ND P in an era ofneo-liberalism. Provincial NDP governments have become increasingly neoliberal in their ideological orientation, and have often proved to be no friend to the labour movement when they hold office. The Federal party has never held power, nor have they ever formed the Official Opposition. This thesis charts the progress of the federal NDP as they become more neoliberal from 1988 to 2006, and shows how this trend effects the links between the NDP and labour. Divergent Paths studies each federal election from 1988 to 2006, looking at the interactions between Labour and the NDP during these elections. Elections provide critical junctions to study discourse - party platforms, speeches, and other official documents can be used to examine discourse. Extensive newspaper searches were used to follow campaign events and policy speeches. Studying the party's discourse can be used to determine the ideological orientation of the party itself: the fact that the party's discourse has become neoliberal is a sure sign that the party itself is neoliberal. The NDP continues to drive towards the centre of the political spectrum in an attempt to gain multi-class support. The NDP seems more interested in gaining seats at any cost, rather then promoting the agenda of Labour. As the party attempts to open up to more multi-class support, Labour becomes increasingly marginalised in the party. A rift which arguably started well before the 1988 election was exacerbated during that election; labour encouraged the NDP to campaign solely on the issue of Free Trade, and the NDP did not. The 1993 election saw the rift between the two grow even further as the Federal NDP suffered major blowbacks from the actions of the Ontario NDP. The 1997 and 2000 elections saw the NDP make a deliberate move to the centre of the political spectrum which increasingly marginalised labour. In the 2004 election, Jack Layton made no attempt to move the party back to the left; and in 2006 the link between labour and the NDP was perhaps irreparably damaged when the CAW endorsed the Liberal party in a strategic voting strategy, and the CLC did not endorse the NDP. The NDP is no longer a reliable ally of organized labour. The Canadian labour movement must decide wether the NDP can be 'salvaged' or if the labour movement should end their alliance with the NDP and engage in a new political project.

Manufacturing 'authenticity' : a case study of the Niagara wine cluster

In this thesis, I use "Fabricating Authenticity," a model developed in the Production of Culture Perspective, to explore the evolving criteria for judging what constitute "real" and authentic Niagara wines, along with the naturalization of these criteria, as the Canadian Niagara wine cluster has come under increasing stress from globalization. Authenticity has been identified as a hallmark of contemporary marketing and important to cultural industries, which can use it for creating meaningful differentiation; making it a renewable resource for securing consumers, increasing market value; and for relationships with key brokers. This is important as free trade and international treaties are making traditional protective barriers, like trade tariffs and markups, obsolete and as governments increasingly allocate industry support via promotion and marketing policies that are directly linked to objectives of city and regional development, which in turn carry real implications for what gets to be judged authentic and inauthentic local culture. This research uses a mixed methods research strategy, drawing upon ethnographic observation, marketing materials, newspaper reports, and secondary data to provide insight into the processes and conflicts over efforts to fabricate authenticity, comparing the periods before and after the passage of NAFT A to the present period. The Niagara wine cluster is a good case in point because it has little natural advantage nor was there a tradition of quality table wine making to facilitate the naturalization of authenticity. Geographic industrial clusters have been found particularly competitive in the global economy and the exploratory case study contributes to our understanding of the dynamic of '1abricating authenticity," building on various theoretical propositions to attempt to derive explanations of how global processes affect strategies to create "authenticity," how these strategies affect cultural homogeneity and heterogeneity at the local level, and how the concept of "cluster" contributes to the process of managing authenticity.

Natural-Resource Exploitation with Costly Enforcement of Property Rights

This paper proposes a model of natural-resource exploitation when private ownership requires costly enforcement activities. For a given wage rate, it is shown how enforcement costs can increase with labor's average productivity on a resource site. As a result, it is never optimal for the site owner to produce at the point where marginal productivity equals the wage rate. It may even be optimal to exploit at a point exhibiting negative marginal returns. An important parameter in the analysis is the prevailing wage rate. When wages are low, further decreases in the wage rates can reduce the returns from resource exploitation. At sufficiently low wages, positive returns can be rendered impossible to achieve and the site is abandoned to a free-access exploitation. The analysis provides some clues as to why property rights may be more difficult to delineate in less developed countries. It proposes a different framework from which to address normative issues such as the desirability of free trade with endogenous enforcement costs, the optimality of private decisions to enforce property rights, the effect of income distribution on property rights enforceability, etc.

Inter-temporal Price Discrimination when Imports are Restricted by Quotas

A dominant firm holding import quota engages in inter-temporal price discrimination when facing a competitive fringe engaged in seasonal production. This causes a welfare loss that comes in addition the loss attributable to limitation of imports below the free trade level.

The right to health, the TRIPS agreement and the public health safeguards to encourage the universal access to essential medicines

The privileges arising from patent protection on pharmaceutical products often prevent the full realization of the right to health, especially in developing countries with scarce resources. This thesis first identifies the international agreements that have established the right to health in international law, obligations and violations associated with it, the problems encountered in the implementation of human rights on the field, compared with the implementation and sanctions associated with economic rights from the World Trade Organization regulatory framework. A comparative study of the legislative frameworks of both developed and developing countries will reveal to what extent Canada, the United States, the European Union, Brazil, India, and South Africa conformed with patent protection exceptions arising from international patent law to protect public health. Finally, the author identifies the crucial indicators that need to be considered in order to assess the conformity of a given approach with the right to health, before he underscores the temporary character of the relevant WTO measures, and the future stakes concerning an increased access to essential medicines.

L'évolution de la réglementation internationale des investissements directs étrangers dans les Amériques : vers de nouvelles perspectives ?

"Mémoire présenté à la Faculté des études supérieures en vue de l'obtention du grade de LL.M. Droit Dans le cadre du programme de Maîtrise en droit(LL.M.) 2-325-1-0 en option recherche et droit des affaires"