“The Travels of a T-Shirt in a Global Economy” projected not only value chain of T-Shirt but also explain us through U. S. textile industry and how globalization and free trade work. Projecting integration of product and resource across international markets, fundamental and important of globalization has been indicated. Tracing T-shirt value chain starting at Texas where raw material was grown, explains how the U. S cotton industry has been able to dominate the world’s production for a very long period of time.
Although American cotton growers are well-known for being “innovative entrepreneurs”, the big theme of discussion and controversy here lies in the subsidies farmers receive from U. S government. The whole set of quotas, tariffs and subsidies they receive are called protectionist policies. Moving on the value chain to manufacturing process in China, the fact that U. S. T-Shirt retailers’ attempt to provide more value to their customers by offering less and less expensive goods, has introduced speed bumps in the economics race for the bottom.
With integration of globalization and technology, communication and transportation, could make it happen. Players in apparel industry have looked for ways to reduce costs by outsourcing their productions outside the US. As a result, some groups think that the phenomenon has led to domestic unemployment. But in fact, globalization is not the only source of the problem; it is the advancement of production technology. Productivity has been higher while using less labor force. Nevertheless, Quota system, an import barrier, was implemented with interference from politics.
Reverse effects of the policy benefited China more than small developing countries that the US was trying to help and US textile companies themselves. Importers were unable to predict and establish relationship with their suppliers. This also means costs of finding new suppliers and risk to business. Import barriers limited flexibility for US fabric producers to respond to the changing needs of the domestic market, which led to lower competitiveness. Moreover, the situation forced Chinese manufacturers to improve and produce higher value product to US market.
It is certain that the US companies have brought their technology to China when they shifted sourcing there. And with complete value chain within the country, flexibility in production and technology, China can be as competitive as developed countries in apparel industry. China now, has become the world’s factory and holds a key role in the global economy. Despite the growing influence of democracy in the world, the cash-rich nation proves that capitalism does not require democracy. Globalization may open up the economy but not the politics.
The political landscape remains national. Another interesting point in T-Shirt value chain is in Africa, this stage in T-shirt life has projected textile recycling that has positive environmental impact in Africa. Used T-Shirts from U. S. are export to Tanzania to be resold as affordable T-Shirt for poorest nation in the world. According to those factors mentioned above, it can be clearly inferred that globalization benefits allocation of resources, increase income, world output, variety of goods, and is essentially good for the consumer.
Combined with supporting factors like Information technology, enables the exchange of information among nations, corporations and individuals around the world, while transportation technology facilitates trade and other physical exchange in global value chains. With these factors, I believe that Globalization and free trade across the world will virtually happen because the world is now without borders. The flow of goods, services, and people can move seamlessly because of cheap transportation and information technology.
Still those national borders will remain because they are driven by politics and psychology. Globalization levels the playing field for nations around the world, but at the same time it threatens them. Consequently, countries will defend their national markets against globalization, it will provoke nationalism. Globalization creates universal global culture while at the same time strengthens traditional culture as a counterbalance. Cultural Brands will be adopted by business to cope with this situation.