By Kaushalesh Lal, Pierre A. Mohnen (eds.)
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Extra resources for Innovation Policies and International Trade Rules: The Textiles and Clothing Industry in Developing Countries
Consequently, foreign firms might have preferred to relocate to home countries, leading to a decline in textiles exports from third tier African countries. In either case local firms did not seem to develop enough capacity to remain competitive in international markets. 14 presents the trend followed by T&C exports vis-à-vis the economic growth of third tier African countries. 14 that the decline in garments exports was experienced at more or less the same level of GDP per capita as in the case of their counterpart in Asia and, to some extent, similar to that of second tier countries.
Opportunities in other sectors are also expected to lead to the non-availability of workers at internationally competitive wage levels. Hence higher GDP per capita, which could be the result of the emergence and the growth of other sectors in the economy, are expected to result in an exit of T&C firms from the sector. 5 that exports of both the textiles and clothing sectors began to decline when GDP per capita reached a threshold level of more than US$10,000 in this group of countries. The interesting aspect is that sector-specificity seems to have played no role in the exit of this industry from the global market.
14 GDP and export performance of T&C in Africa Second, textiles-exporting firms may not be local firms. They could be Asian firms that were unable to export textiles from their own countries because of quota restrictions such as MFA. Since 1995 these restrictions have been removed in a phased manner. Consequently, foreign firms might have preferred to relocate to home countries, leading to a decline in textiles exports from third tier African countries. In either case local firms did not seem to develop enough capacity to remain competitive in international markets.