Rivoli Questions Ch. 9

1. How does the seam in the toes of your sock demonstrate that the US apparel industry continues to be protected even while global trade is liberalized.
I should have written "continued" instead of continues.  The US gave preferential access to the US market for Caribbean-made socks only if the toe seams were sewed in the US.

2.  Explain how the terrorist attacks of September 11, 2001 created a trade war between Pakistan and the US's "alphabet army".  Who won? Use these terms in your explanation: quota, Bush, Wal-Mart.
Pakistan had become an apparel exporter before 9-11 but had almost met their yearly quota and their exports to the US faced a high tariff.   US retailers and Pakistani government officials proposed that the quota be raised and the tariffs suspended because, otherwise, Wal-Mart would stop buying apparel from Pakistan.   In return, Pakistan would cooperate in the War on Terror.   As a neighbor of Afghanistan, Pakistan's cooperation was crucial to US military activities in the region. Because the Bush administration was able to only make relatively minor adjustments to Pakistan’s quota, Rivoli concludes that the US textile industry and its “alphabet army" won. 

3.  How did DeMint's victory suggest that the decades of textile industry protection were almost over?
DeMint was running for South Carolina's Republican senatorial nomination.  His opponent ran as a protectionist.  DeMint ran as a free trader.  DeMint won. 

4.  During the past 40 years of trade negotiations what has happened to tariffs on trade between rich countries?
They have been almost completely removed.

5.  During the past 40 years of trade negotiations what has happened to tariffs on products exported from poor countries to rich countries?
Extensive barriers remain to limit imports from poor countries to rich countries.  Why?  Protection of textile industry and agriculture.

6. Which "major cost-competitive exporters" have been constrained by MFA?
Japan before MFA.  China post-MFA.

7. How do major retailers plan to change the geography of the apparel industry after the MFA expires?
Instead of buying from more than 50 countries, they will focus on 5-6 countries.

8. How does Figure 9.1 demonstrate the dramatic changes that occurred in apparel manufacture when some of the apparel quotas were removed?   Also, use the Esquel example to explain this change.
More than 15 small countries experienced decreases in their exports to US while China's share increased by 900%.  With the lifting of quotas, Esquel was able to close up shop in Mauritius and move production back to China.

9.  Compare projected textile and apparel industry job losses in the US with the countries in the developing world.  Which countries and workers will be worse off?  Far more textile-related jobs will be lost in developing countries of the world, up to 30 million, than in the US.  These workers will have far fewer employment alternatives than laid-off workers in the US.  This could create increases in emigration and cause political instability.

10. Explain how the information in Figure 9.2 is related to question #9?
Figure 9.2 shows that apparel manufacturing is the primary source of industrial jobs in many countries.  These are the best jobs in these countries.  When apparel manufacturing leaves, these countries will have lost their most lucrative exports.

11. How might Cambodia successfully compete with China?  Use the terms "socially responsible" and premium in your answer.
Cambodia is trying to capture some of the socially responsible market, that is, consumers who care about the people who manufacture their clothes and the conditions they work in.  These consumers will pay a higher price for a t-shirt if they are certain that it wasn't made in a sweatshop.    China has shown no inclination to provide sweat-free apparel.

12.  How was the "Istanbul Declaration" evidence that Auggie had support beyond the Carolinas?
The Istanbul Declaration was signed by 47 countries.  The document focused the WTO's attention on China's unfair trade practices: currency manipulation, repressive labor practices.  

13. Why were the CIA and NSA interested in the fate of the MFA?
The CIA and NSA were worried that 10 million unemployed manufacturing employees in the Muslim world could cause political instability and possibly increase terrorism.