The Caribbean Clothing Industry: The US and Far East Connections
A Textiles Intelligence research report on Caribbean apparel production, US trade policy and Asian producers in the region
The Caribbean Basin contains some of the world's fastest growing apparel producing countries. These countries have very low wage costs, and benefit from being geographically close to the important US market. Suppliers of clothing assembled in the Caribbean from US fabric are guaranteed free access to the USA, without quotas. This Textiles Intelligence report provides a detailed analysis of the US apparel market and US legislation, examines the strengths and weaknesses of US policy with regard to US imports, and looks at prospects for Costa Rica, the Dominican Republic, Haiti and Jamaica, as well as those for Asian companies basing themselves in the Caribbean region in order to reach US markets. Textiles Intelligence, formed in 1992 as a spin-off from the Economist Intelligence Unit, supplies global business information to the fibre, textile and apparel industry, with customers in more than 60 countries.
Why the Caribbean Mattered to the US Market
Three advantages run through the report's analysis. Wage costs in the Caribbean Basin were very low by international standards. The region sits geographically close to the United States, the market its producers chiefly supply, so shipping times stay short. And clothing assembled in the Caribbean from US fabric received guaranteed free access to the USA without quotas — an arrangement that tied Caribbean sewing capacity directly to US fabric mills and made the region a natural extension of the US supply chain rather than a purely offshore competitor.
Asian companies recognised the same logic. The report examines Asian producers basing themselves in the Caribbean in order to reach US markets, and an appendix documents a South Korean offshore apparel plant in the Caribbean in 1987 — evidence that the region's role was as much about trade rules and market access as about labour costs alone.
Inside the Report: US Market, Policy and Suppliers
The report is organised in three parts. Part 1 introduces and summarises the findings. Part 2 covers the US market: a profile of the US apparel industry covering investment, employment, wage levels and productivity; apparel market trends, import penetration and the mid-1980s import surge; textile trade policy; the international framework, including the influence of the USA and the Multi-Fibre Arrangement; regulatory instruments and policy implementation; the effectiveness of US policy; and the promotion of developing country exports through TSUSA 807, the provision under which Caribbean assembly of US fabric operated. It closes with the Caribbean as a special case, the CBI Textile Program, and alternatives to apparel trade policy, including the US industry lobby.
Part 3 turns to the Caribbean suppliers themselves. Separate chapters profile the Dominican Republic, Haiti, Costa Rica and Jamaica, each examining industry structure, institutional arrangements, international competitiveness, overseas investment and export performance, followed by a comparative assessment of the Caribbean producers against other locations and a chapter on future prospects. Appendices cover subsidies and incentives in major apparel exporting countries, US imports of restricted categories from China in 1986-88, other CBI textile trade agreements, and the South Korean offshore plant case.
Who This Report Serves
The report serves US apparel companies weighing Caribbean assembly against Far East sourcing, fabric mills supplying the 807 trade, and investors comparing Caribbean locations country by country. Its country chapters give each of the four main suppliers the same treatment — structure, institutions, competitiveness, investment and exports — so a reader can compare Costa Rica with Jamaica, or Haiti with the Dominican Republic, on identical terms before turning to the report's own comparative assessment and prospects.
Common Questions
Why did Caribbean clothing assembled from US fabric matter?
Suppliers of clothing assembled in the Caribbean from US fabric were guaranteed free access to the USA without quotas, and the region combined very low wage costs with geographic closeness to the US market — the combination the report analyses in detail.
Which Caribbean countries does the report profile?
Costa Rica, the Dominican Republic, Haiti and Jamaica, each with chapters on industry structure, institutional arrangements, international competitiveness, overseas investment and export performance, followed by a comparative assessment.
What US policy topics does the report cover?
US apparel market trends and import penetration, textile trade policy, the Multi-Fibre Arrangement, TSUSA 807 and the promotion of developing country exports, the CBI Textile Program, and the effectiveness and weaknesses of US policy on imports.