are not easily available except for such studies as were undertaken by the UN for Latin American countries and overall statistical measures of output and manpower. It would appear that the higher wage paying countries do tend to utilize employees more effectively and therefore have considerably reduced their manpower requirements per unit of product. But this gap has been considerably narrowed under the pressures of international competition and through the spread of technical information and improvement in the arts of supervision and managerial competence reaching even in to the developing countries, particularly those now building new textile mills.

One of the remaining basic elements in the competitive process is the disparity in hourly labor costs. Even as respects this more tangible item there is no readily complete international measure. A systematic study made of the relative levels of hourly wage costs in the European and American textile industries by the French National Institute of Statistics and Economic Studies found that, inclusive of social charges, the United States average hourly textile wage costs were three times as great as the highest European nation (United Kingdom). The other countries studied, in descending order of average hourly labor costs, were: Switzerland, West Germany, Belgium, France, the Netherlands and Italy. The labor cost for the last country was 19 per cent below that of United Kingdom.10

A comparison of countries solely on the basis of direct cash wages indicates that a somewhat different relationship exists. The United States remains at the top of this distribution. Following this country, we find Canada, Sweden, Norway, Israel, United Kingdom, Switzerland, Belgium, West Germany, the Netherlands, France, Mexico, Italy, Peru, Poland, Japan, India, Burma and Taiwan.

A summary of the money wage relationship places the United States about three times above the United Kingdom rate, with the latter about two and one-half times the Italian rate, with Japan about sixty per cent of the Italian level and Taiwan less

9

United Nations Department of Economic Affairs, Labor Productivity of the Cotton Textile Industry in Five Latin American Countries (New York, 1951), p. 293.

10 Institute National de la Statistique et des Etudes Economiques, Etudes et Conjoncture, No. 3, March, 1960.

than half of the Japanese level, making the range from Taiwan to the United States a ratio of one to 23.

Fourth, the expansion of textile industries in some countries is currently being financed through international bodies and foreign organizations. There is no overall measure of the extent of such financing but reports of loans, credit extended by machinery companies, loans underwritten by agencies such as the American Export-Import Bank and grants by the United States International Cooperation Administration indicate that the sums involved are considerable.

One question raised by such international financing of textile expansion is the degree to which it should aid in the creation of an industry of such size as would enable and impel the new industries to seek foreign markets.

Fifth, disparities in wages, combined as they are with considerably reduced differences in operating efficiencies and productivity and wide differences in production costs, have created the potentialities for widespread structural dislocations in the textile industry in the advanced countries should the current restraints on trade be reduced. The potential magnitude of these disruptions is clearly indicated by the ability of the new lower cost textile producing countries rapidly to shift considerable proportions of their present output and operate more intensively for the export trade. Such opportunities are constantly being sought and rapidly seized upon.

The capacity of the older textile countries to absorb the extensive flow of imports is dependent largely upon their willingness to see their domestic industries contract at a faster rate than they have in recent years and to yield an increasing proportion of their domestic markets to the new textile producing countries. The shift of the sources of world trade to the lowest cost areas, primarily the Asian countries, would also endanger the ability of the less industrialized western nations such as Italy to engage in textile world trade. Presumably competition may be centered among Asian and later African producers, unless impending technological developments will favor production by the capital rich nations. Such transfers of operations will present formidable adjustment and structural problems to the economies of North America and Europe.

THE GARMENT PROBLEMS

The world trade problems of the ready-made garment industry are of recent origin. Nevertheless, they have assumed acute forms in several specific areas. They are interrelated to the study of textiles, because clothing imports represent direct imports of textile materials.

The industry is relatively new in most countries. Beginning in the middle of the last century, it spread throughout the world only within the last decade. In the pioneering countries like the United States, it received its initial stimulus from the manufacture of work clothing and military uniforms. More recently, the industry expanded because men and women in the industrialized nations with higher incomes first supplemented and then supplanted their home-made and custom-made garments by ready-made dress and business garments. At the present time most clothing worn in the United States is ready-made as is also a substantial proportion of that used in other industrialized countries.

The major producer of ready-made clothing is still the United States. The American industry grew slowly but gained momentum in the second decade of this century and has grown substantially ever since. In the period from 1938 to 1953 for which comparative world statistics are available, output of clothing, footwear and made-up textiles in the Northern North American region (United States and Canada) rose by forty per cent, a rate not equalled in any continent. The increase in the Oceania area was 30 per cent and Europe, only 14 per cent. But since 1953 the area of greatest growth shifted from North America to Asia where production jumped by 1958 to 64 per cent. The countries of the European Economic Community reported an increase of 27 per cent whereas the gain was smaller in the remainder of Europe and insignificant in Northern North America.11

The ready-made garment industry has only begun to establish itself in Latin America and is still quite limited in Africa. Only 3.3 per cent of the value added in 1958 by the clothing, footwear and made-up textiles industry in the non-Communist

"United Nations Statistical Office, Patterns of Industrial Growth, 1938-1958, op. cit., p. 81.

countries was in Latin America and the percentage for Africa and the Middle East was 1.4 per cent. Despite the expansion in Asia, the per cent was still only 6.3 per cent. Europe contributed 35.5 per cent and the two Northern North American countries, 51.3 per cent of the value added by this world industry.

The upsurge of the garment industries is associated with the rise in the per capita income and the relatively low prices of ready-made clothing. As income increased, people became more receptive to the purchase of clothing made outside of the home. As mass production procedures reduced the costs of manufacture, as sizes were standardized and quality and style improved, more and more people were willing to accept ready-made clothing. Advertising and promotion did much to encourage broader consumption. Moreover, innovations by garment manufacturers resulted in new garments and items of apparel which stimulated the further growth of the industry. These forces converted the mass of consumers into purchasers of ready-made clothing. After penetrating the simpler and staple garment markets, the clothing industries have taken over more and more sectors of the fashion trade.

Two trends have stimulated the growth of the textile industry in Asian countries. First, western dress has been accepted so that a need has arisen for lower-priced ready-made clothing. The simplification of manufacturing methods and the ready availability of the sewing machine encouraged this development. Second, a number of countries organized export industries generally at the instigation of representatives of the importing countries. Production mounted, employment increased and garment factories have become increasingly more important elements in the total economies.

Until the appearance of the ready-made garment industry, there was little possibility for a sizable volume of world trade in clothing. Countries were self-sufficient since they produced for their own needs. Such trade as existed in wearing apparel was limited in scope and confined to high-quality or highfashioned items or specialities. Britain sold men's overcoats; Paris produced gowns for export. Other countries sold their handicraft. Some special items loomed large such as hand-sewn handkerchiefs and gloves or hand-embroidered women's and

children's garments. The only volume item in trade was cheap work clothing.

The dollar volume of apparel imports for the world has been relatively small. In 1958, the total imports of clothes, not furs (SITC Group 841) amounted to some $638 million, with one quarter of that volume being received by the United States. Countries obtaining imports between $55 and $65 million were, in declining order, West Germany, Canada, United Kingdom and the Netherlands. Five countries with imports between $40 million and $20 million were, in declining order of value of imports, Sweden, Belgium and Luxembourg, Norway and Rhodesia. The nations with imports valued between $17 million and $10 million were, in order, Malaya, Denmark, Australia and Hong Kong.

These imports on the whole were of relatively minor significance in most countries when measured by the total volume of national garment production. Imports into the United States of $175 million in 1958 represented less than 2 per cent of domestic garment output but they disrupted several local markets sufficiently to create considerable consternation. In Great Britain, the ratio of apparel imports to total clothing expenditures was below the two per cent level.

Most of the garment trade of the European countries is with neighboring countries. More than 90 per cent of the imports of the OEEC countries came from other member countries. More than half of the exports from the OEEC countries were destined for other member countries.

The emergence of two large new Asian exporters and the imminent appearance of new garment capacity for exports in other Asian countries have changed the nature of the problems of international apparel trade. The Japanese apparel industry grew in the post-war years not because of the saturation of its own market but because it was organized primarily for exports. The market for this new capacity was not Southeast Asia, the traditional Japanese outlet, but the United States, Canada and then Western Europe. Japanese apparel exports to the world markets increased between 1953 and 1958 from $37.6 million to $148.6 million, a rise of 296 per cent as compared with an increase of 126 per cent of her total exports. The major target was