NAFTA on Textile and Apparel Term Paper

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"While wages south of the border were lower than within the United States, lower productivity and higher costs for critical elements such as power and water made Mexico less viable than many originally thought" (Sinclair, 2004). But even so, the factories continued to operate, causing job loses for the American workers. It is rather difficult to give a clear number of the jobs created, according to NAFTA advocates, or the number of jobs lost, according to disclaimers of NAFTA. "When NAFTA was established, it was promised that this trade agreement would create hundreds of thousands of jobs for U.S. workers. However, it is very difficult to determine how many U.S. textile and apparel jobs have been created or lost as a direct result of NAFTA. When looking at a pro-trade source, over a hundred thousand jobs have been created because of NAFTA; when viewing a pro-labor source, however, over a hundred thousand jobs have been lost because of NAFTA. It is nonetheless safe to assume that the jobs that have possibly been created are not in the U.S. textile industry." (Parrish and Oxenham, 2003) the image below presents the workforce occupation in the U.S. textile and apparel industry between 1985 and 2001, revealing a net decreasing trend in the latter years.

Source: Parrish, E.D., Oxenham, W., September 2003, the Effect of NAFTA on the U.S. Spinning Industry, AUTEX Research Journal, Vol. 3, No. 3

It can be observed that the number of jobs in the U.S. textile industry increased slightly in 1994, the year of NAFTA's implementation, but they continued to decrease following 1995. Specialists explain that however the North American Free Trade Agreement is a primary cause for the job loses, other factors also contributed; the major secondary factor is represented by the technological advancements made, which increase the efficiency of the operational process and require the assistance of fewer employees (Parrish and Oxenham, 2003).

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In Canada on the other hand, the apparel industry managed to grow nationally after the implementation of the NAFTA and even created more jobs. The number of textile jobs had increased from 82,800 in 1994 to 93,700 in 2000. In Mexico, the number of jobs in the industry has also increased. The statistics of the jobs in the textile industry adherent to the three countries of the NAFTA are presented in the table below:

Source: Spener, D., Gereffi, G., Bair, J., the Apparel Industry and North American Integration, Temple University major implication for the Mexican apparel and textile industry was given by a modification in not just the quantity of the products manufactured and exported to the U.S., but also in their quality. In this particular sense, "Mexico has witnessed the emergence of cutting, laundering and finishing operations, as these parts of the production process are moved south of the U.S. border to various sites that are undertaking 'full package' production. This upgrading of Mexico's productive capacity has, in turn, attracted a number of large textile producers" (Spener, Gereffi and Bair)

3. Conclusions

The North American Free Trade Agreement was signed in 1994 by the United States, Canada and Mexico and its aim was to stimulate trade between the three countries through the reduction of barriers. The agreement had numerous positive and negative implications on various industries and sectors, including textile and apparel. This particular industry flourished in all countries, but it had varying side effects. For instance, while the number of jobs in Canada and Mexico increased, it decreased within the United States. But overall, the agreement supported the development of the textile and apparel industry in all three countries and it eased their access to numerous resources, including commodities, technologies and labor force......

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