Europe generally requires what is known as a “double transformation” in goods for them to be considered made in a certain region. In the case of clothing, one step, or “transformation,” would be weaving yarn into a fabric. A second transformation would be assembling the fabric into a garment.
The United States requires a “triple transformation” that extends back to the production of yarn from synthetic or natural fibers, like cotton.
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To Lower Tariffs, Vietnam Pushes for Easing Trade Rules - NYTimes.com - 0 views
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Lien Phat Ltd.'s factory,
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Its supplies are imported. “I mainly take orders from international corporations, who give us materials and designs,” said Truong Thi Thuy Lien, the owner of Lien Phat. “Usually the clients will designate us to certain suppliers, most of them are in China.”
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“I don’t deal with the exporting process. I take the order and deliver the goods to the port” in Ho Chi Minh City, she said. “The rest lies with my clients.” <img src="http://meter-svc.nytimes.com/meter.gif"/>
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After Bangladesh, Seeking New Sources - NYTimes.com - 0 views
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Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries — really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan — have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.
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The clothing needs to be labeled correctly so that it travels smoothly through a large retailer’s distribution centers
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The process requires formidable numbers of skilled workers who can oversee quality control as well as labeling and shipping of garments.
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Big retailers and fashion companies have repeatedly tried and failed to develop alternatives, experimenting in India, Africa and Latin America, only to run into infrastructure bottlenecks and shortages of skilled managers or workers.
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India was not organized for large-scale, timely production,
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Africa did not have enough workers with the right skills for high-volume labeling and shipping,
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and Latin America did not have enough workers interested in operating sewing machines.
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In Guatemala, the quality was excellent, he said, but, “They can’t handle big orders and they’re slow on delivery.”
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What may save Bangladesh from a sharp, immediate drop in export orders is simply that most Southeast Asian factories are already fully booked with orders from multinationals fleeing China’s ever-rising costs.
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“For this year, it’s impossible — we’re already full,”
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Indonesia’s national training center for seamstresses — women make up 98 percent of the students — is here in Semarang, producing 12,000 graduates a year. But even that isn’t enough. Four factories with a combined employment of 30,000 are to open in the next year in Semarang, and many more factories are being built nearby.
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“It’s going to take time, but it’s going to eventually filter out all over the place,” he said. “It’ll take two or three years.”
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Newly opened factories have started competing for scarce seamstresses by offering free meals and free health insurance
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Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries — really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan — have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.
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He said that he and a couple of other suppliers of elite retail chains always worried about Bangladesh’s reliance on high-rise factories,
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After Bangladesh, Seeking New Sources - NYTimes.com - 0 views
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Bennett Model helped pioneer the exporting of garments from China in 1975, the year before Mao Zedong died,
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Buying from Bangladesh, said Mr. Model, “has been politically incorrect ever since problems started there, so a lot of major players had already been looking for alternatives.”
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Western executives are checking on potential new suppliers in southern Vietnam, central Cambodia and the hinterlands of Java in Indonesia.
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“Right now, the name of Bangladesh just gives a bad rep to a company,”
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Bangladesh, which is the world’s second-largest garment manufacturer after China
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Garment manufacturing makes up a fifth of the economy in Bangladesh and four-fifths of its exports,
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“People are on the one hand looking at contingency plans in case the unrest gets worse,” said Bruce Rockowitz, the group president and chief executive of Hong Kong-based Li & Fung, one of the world’s largest sourcing companies.
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Greece's Bogus Debt Deal by Ashoka Mody - Project Syndicate - 0 views
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The economist Larry Summers has invoked the analogy of the Vietnam War to describe European decision-making. “At every juncture they made the minimum commitments necessary to avoid imminent disaster – offering optimistic rhetoric, but never taking the steps that even they believed could offer the prospect of decisive victory.”
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Instead of driblets of relief, a sizeable package, composed of two elements, is the way forward.
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A simple structure would be to make all debt payable over 40 years, carrying an interest rate of 2%.
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The second element of the debt-relief package would be more innovative: If Greece’s economy performs well, the generous extension of maturities can be clawed back or the interest rate raised. A formula for this could be linked to the debt/GDP ratio
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Why bother? Because the very premise of the current deal and the expectations it sets out are wrong. First, the notion that there is a smooth transition path for the debt/GDP ratio from 200% to 124% is fanciful. Second, even if, by some miracle, Greece did reach the 124% mark by 2020, the claim that its debt will then be “sustainable” is absurd.
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Make no mistake: policymakers’ track record on forecasting Greek economic performance during the crisis has been an embarrassment. In May 2010, the International Monetary Fund projected – presumably in concurrence with its European partners – that Greece’s annual GDP growth would exceed 1% in 2012. Instead, the Greek economy will shrink by 6%. The unemployment rate, expected to peak this year at 15%, is now above 25% – and is still rising. The debt/GDP ratio was expected to top out at 150%; absent the substantial write-down of privately held debt, which was deemed unnecessary, the ratio would have been close to 250%.CommentsView/Create comment on this paragraphIn September 2010, four months after the official Greek bailout was put in place, the IMF issued a pamphlet asserting that “default in today’s advanced economies is unnecessary, undesirable, and unlikely.” The conclusion was that official financing would carry Greece past its short-term liquidity problems. Calls for immediate debt restructuring went unheeded. Six months later, after substantial official funds had been used to pay private creditors, the outstanding private debt was substantially restructured.CommentsView/Create comment on this paragraphSuch were the errors committed over short time horizons.
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And, again, even if Greece somehow did achieve the 124% milestone, its debt would still not be sustainable.
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Staying the course, as Summers warns, will lead only to “needless suffering” before that course inevitably collapses, bringing Greece – and much else – crashing down.
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Shipping Costs Start to Crimp Globalization - NYTimes.com - 0 views
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The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.
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Jeffrey E. Garten, the author of “World View: Global Strategies for the New Economy” and a former dean of the Yale School of Management, said that companies “cannot take a risk that the just-in-time system won’t function, because the whole global trading system is based on that notion.” As a result, he said, “they are going to have to have redundancies in the supply chain, like more warehousing and multiple sources of supply and even production.”
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In a more regionalized trading world, economists say, China would probably end up buying more of the iron ore it needs from Australia and less from Brazil, and farming out an even greater proportion of its manufacturing work to places like Vietnam and Thailand.
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As Panama Canal Expands, West Coast Ports Scramble to Keep Big Cargo Vessels - NYTimes.com - 0 views
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Making Everything Shipshape
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The ports in Tacoma, Seattle, Oakland, Los Angeles, Long Beach and elsewhere offer much shorter sailing times than Gulf Coast and East Coast ports. But for shippers of some goods, the web of logistics, including trucks and railroads, ends up being less expensive if they go through the Panama Canal.
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While the widened Panama Canal will allow an all-water route for big ships to the East Coast, the project — originally scheduled to open this year — has been plagued with construction delays. And the authorities have yet to announce toll charges for passing ships. In the end, it might be too expensive for some ships to use.
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At the same time, sailing patterns may shift as Asian manufacturing continues to move from China to countries to the south, like Singapore and Vietnam, which are actually closer by sea to East Coast ports through the Suez Canal than to West Coast ports across the Pacific.
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For trade with China, Prince Rupert’s appeal is proximity. Prince Rupert is two to three days closer than the western coast of the United States, helping ships cut fuel costs.
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While the railways and truck lines in Canada have a history of labor instability, cargo carriers sailing into the country can avoid taxes levied by the United States government.
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Intel Says It Will Cut 1,500 Jobs in Costa Rica - WSJ.com - 0 views
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Intel, based in Santa Clara, Calif., has been grappling with the effects of a slowdown in sales of personal computers that use its microprocessor chips. The company has also been slow to build a sizable business in chips for smartphones and tablets.
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Brian Krzanich and Renee James —appointed last May as Intel's chief executive and president, respectively—have been studying Intel operations and concluded that reducing the assembly and test operations in Costa Rica made most economic sense, said Chuck Mulloy, an Intel spokesman. "We have to be more efficient and effective," he said. Most of Intel's chips are fabricated in the U.S., Ireland or Israel and then sent to other companies to be encapsulated in packaging and tested. Those chores now handled in Costa Rica will be moved to existing Intel operations in Malaysia, Vietnam and China, Mr. Mulloy said.
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Citi Cuts Costa Rica Growth Forecast After Firings - Bloomberg - 0 views
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Citi Cuts Costa Rica Growth Forecast After Firings
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Hours later, BofA said it would be exiting operations in Costa Rica, Guadalajara, Mexico and Taguig, Philippines, without saying how many jobs would be lost. Costa Rica’s foreign investment agency said the BofA move would result in 1,500 layoffs.
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“This is a strong call to the country to keeps tabs on things like the rising cost of electricity, telecommunications, wages and social guarantees.”
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The country of 4.7 million people climbed seven spots to 102nd in the World Bank’s annual “Doing Business” report this year, lagging behind China, Vietnam and Namibia. Moody’s Investors Service lowered its outlook on Costa Rica to negative from neutral in September, citing a rising debt burden and widening budget deficit. Moody’s rates the country Baa3, putting it in the same category as Turkey and Iceland.
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In a Bloomberg survey published last month, Costa Rica was ranked fourth behind Russia, Argentina and Ukraine on a list of countries confronting the biggest loss of investor confidence. The survey cited data including the rising cost of credit default swaps and the currency’s performance against the dollar.
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California-based Intel, whose processors run more than 80 percent of personal computers shipped worldwide every year, originally chose to establish operations in Costa Rica after studying sites in Indonesia, Thailand, Brazil, Argentina, Chile and Mexico, according to a 2000 case study by Harvard University’s Center for International Development. The company’s $600 million investment at the time represented about 4.2 percent of GDP, prompting the company’s then-Vice President Bob Perlman to say Intel’s arrival was like “putting a whale in a swimming pool,” according to the study.
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n 2013, about 21 percent of Costa Rica’s exports of goods came from Intel, according to investment promotion agency CINDE