Industrial Crisis and the Open Economy: Politics, Global Trade and the Textile Industry in the Advanced Economies

297 Pages·1998·31.697 MB·English

by  Geoffrey R. D. Underhill (auth.)

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Industrial Crisis and
the Open Economy
Politics, Global Trade and the Textile
Industry in the Advanced Economies
Geoffrey R. D . Underhill
Professor of International Governance
University ofA msterdam
and
Lecturer in International Political Economy
University of Warwick
First published in Great Britain 1998 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-26905-1 ISBN 978-1-349-26903-7 (eBook)
DOI 10.1007/978-1-349-26903-7
First published in the United States of America 1998 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-21594-1
Library of Congress Cataloging-in-Publication Data
Underhill, Geoffrey R. D.
Industrial crisis and the open economy: politics, global trade,
and the textile industry in the advanced economies I Geoffrey R.D.
Underhill.
p. cm. - (International political economy series)
Includes bibliographical references and index.
ISBN978-0-312-21594-1 (cloth)
1. Textile industry. 2. International trade. I. Title.
II. Series.
HD9850.5.U53 1998
338.4'7677-DC2l 98-17294
CIP
© Geoffrey R. D. Underhill 1998
Softcover reprint oft he hardcover 1s t edition 1998
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Any person who does any unauthorised act in relation to this publication may be liable to
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with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10987654321
07 06 05 04 03 02 01 00 99 98
To Magdalena
Contents
List of Tables IX
Preface and Acknowledgements Xl
List of Abbreviations XVll
Introduction 1
Focus of the Study 2
The Arguments: The Political Economy of Trade
Liberalisation 6
Implications for Theory 18
Structure of the Book 25
1 Material Underpinnings: Economic Structure
and Industrial Crisis, 1974-84 33
Economic Dimensions of the Sector: Complexity
and Fragmentation 34
Decline and Adjustment in the Textile
and Clothing Sector 40
Global Competition and Production Costs:
The 'Competitive Equation' in Textile
and Clothing Industries 47
Conclusion 61
2 International Competition, Domestic
Industrial Crisis, and the Strategies of
Firms 70
International Trade and Industrial Adjustment 72
The Textile Problematic: The French Case 74
Conclusion 94
3 State, Market Governance, and Particularistic
Interests: The Political Economy of Capture 101
Textile and Clothing Interests: the US and UK 103
French Textile and Clothing Interests 109
Vll
Vlll Contents
Policy Issues and State-Industry Relations in France:
The Political Economy of Capture 120
Flexible Specialisation and Associational Systems in
the Italian Textile and Clothing Industry 136
Conclusion 142
4 Capturing the Global Trade Regime 153
From STA to MFA 157
The First MFA Agreement 160
Renewing the MFA: France, Transnational Capture,
and the EU on the Offensive 165
Conclusion: The Fourth MFA 187
5 Dismantling Protectionism: The Political
Economy of Liberalisation in the Uruguay Round 197
Firm Strategies and Changing Economic Structure:
the Accelerating Globalisation of Textile and
Clothing Production in the 1980s and Early 1990s 204
The 1986 MFA Renewal and the Uruguay
Round Launch 221
Conclusion: State and Market in Global Textile Trade 252
Appendix: Uruguay Round Agreement on
Textiles and Clothing 258
m
~~
List of Tables
1.1 Consumption of textile products in industrialised
countries by final use, 1978 35
1.2 Evolution of textiles consumption in Western
Europe by final use, 1970-9 35
1.3 Top ten textile and clothing firms in the EU, 1980 40
1.4 Domestic textile and clothing consumption
by end-use in France, 1980 44
1.5 Evolution of world consumption of textile
fibre types, 1958-78 49
1.6 Manufacturing costs, spinning, 1978 51
1.7 Manufacturing costs, weaving, 1978 52
1.8 Real growth rates of clothing and textile imports
to the industrialised countries in Western Europe
and North America, 1963-78 55
1.9 Changing shares held by competing suppliers
of imports to industrialised countries of Western
Europe and North America, 1963-78 56
1.10 Trends in import penetration and net trade
balance of major industrial countries, 1970-80 58
2.1 Evolution of relative prices of textile products
in France, 1960-80 83
5.1 Selected EU countries: shares of companies'
turnover derived from own production and
subcontracting, extra-EU and intra-EU, 1983-92 216
ix
Preface and
Acknowledgements
The research project which lies behind this book was extensive, and as
a result the book itself has undergone a number of metamorphoses.
The project began in the early 1980s as a study of industrial adjust
ment in France and Europe. The question I was posing in the research
was an important one in those early stages of the globalisation process:
what do states do, indeed what can states do, as their industrial
structures become transnationalised? It seemed that states had lost to
global markets a number of traditional instruments of policy at a time
when, politically, they needed them more than ever. The last half of the
1970s had been years of acute industrial crisis, and the early 1980s
proved worse. Firms became more multinational, trade patterns
changed rapidly as a result of liberalisation policies, and company
failures and job losses mounted. A world which had been relatively
certain and had produced the most miraculous economic growth in
history was clearly at an end.
It seemed that states were faced with an economy which increasingly
cut across traditional national borders, and yet the domestic political
ramifications of industrial crisis were undiminished for state officials
in search of policy responses to deal with the problems of unemploy
ment, apparently perpetual industrial adjustment, and popular unrest
at declining income growth. The way in which states came to terms
with these immense problems, which unseated many governments,
from the Labour Party in the UK (1979) through the coalition of the
Right in France (1981) and the Social Democrats in Germany (1982)
to the Liberal Party in Canada (1984), not to mention President Car
ter's attempted Democratic revival in Washington (1976-80), is now
history, but is worth repeating briefly. States began to choose radical
market-oriented solutions, deliberately divesting themselves of both
policy instruments and the day-to-day management of distributional
conflict in their societies. Labour had to adjust to the new climate with
less sympathy from governing coalitions, firms had to learn to survive
without the institutionalised programmes of assistance which had been
their crutches in the post-war period, and economic structures began
to change rapidly in what was eventually labelled globalisation.
Xl