A Global World
Improved transport networks and communications technologies made global trade in the twentieth century easier. Jet planes move packages quickly around the world and telephones, faxes and email enable people to share thoughts and make instant decisions.
Companies used these developments to expand their businesses. Courtaulds and Coats Paton opened up overseas factories where they employed workers on a lower wage than in the UK. Courtaulds opened factories in Morocco, Tunisia, Turkey, the Philippines, China, Thailand, and Sri Lanka. By 1986, Coats had interests in thirty countries including India, Pakistan, Turkey, Philippines and Hong Kong. Coats' Clothing Division opened cut and sew factories in Morocco and Mauritius in 1992.
Courtaulds and Coats, as a result of the takeovers in the 1960s and 1970s, were the two largest European companies in the textiles and clothing industry in 1980. Courtaulds employed 153,003 and Coats 60,000. Both companies continued to invest outside of the UK following demands by retailers for low cost clothing. In 1997, 65% of Coats' turnover was generated outside of the UK.
Western governments became concerned by the level of imports from low cost countries and introduced the Multi Fibre Arrangement (MFA). The 1974 MFA established an annual negotiation of quotas between nations. The exporting nation allocated quotas to its manufacturers to ensure that the national quota was not exceeded. The MFA will be phased out by 2005 and open up the textile market to international competition.
Production of clothing and textiles has continued to move to Asia. Industries in Korea, Hong Kong, Singapore, Taiwan, Thailand and China have all grown. The end of the MFA is expected to lead to growth in the Chinese industry and India and Pakistan are also expected to benefit. Within Britain and other developed countries employment is expected to fall in the industry as imports increase from low cost countries.
Free trade areas
Since World War II countries have formed trading blocs based upon common interests. Particularly significant was the 'COMECON' trade agreement formed in 1949 between the Warsaw Pact Nations. Eastern European countries dominated by the USSR were joined by Cuba, Mongolia and Vietnam in the bloc. When this fell apart in 1991 there was a release of manufacturing capacity particularly in the nations bordering on the European Economic Community. In 1957 the European Economic Community was founded with six member states (Belgium, France, Germany, Italy, the Netherlands, Luxembourg). The European Union (the current name for what was the EEC) now contains fifteen member states, including the United Kingdom. The introduction of the 'Single Market' in 1992 removed internal trade barriers across the EU and allowed free trade between member states. The North American Free Trade Area (NAFTA) was founded with similar objectives. Also of importance was the Commonwealth.
The European knitting industry is now dominated by Italy. British and German companies have lost business to the Italian industry. The introduction of advanced multi-feed circular knitting machines in Italy led to a rapid growth in the hosiery and tights division, followed by expansion in most other sectors of the industry. In 1994 the Italian industry employed 141,000 workers while the British and German industries employed 58,900 and 40,300.