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What lies ahead for Mexico’s garment industry?

August 18, 2005

On August 18, 2005, representatives of Mexican garment manufacturing firms, the Mexican government, national and international labour organizations, leading international brands, and Mexican labour rights organizations gathered together in Mexico City to discuss the future of the country's textile and garment industry after the demise of the MFA import quota system at the end of 2004.

The one-day conference entitled "What lies ahead for the Mexican garment and textile industry? The impact of end of the MFA on the industry and labour rights" was co-sponsored by MSN and the Mexican women's organization, MUTUAC. The public meeting and a follow-up workshop for Mexican civil society organizations were part of a series of activities related to MSN's participation in the MFA Forum, an international multi-stakeholder initiative promoting responsible business practices and respect for workers' rights in the post-quota period.

Speakers at the public meeting included representatives of the National Chamber of the Garment Industry, the National Union of the Textile and Garment Industry of the Confederation of Mexican Workers (CTM), the Ministry of the Economy, the International Textile, Garment and Leather Workers' Federation (ITGLWF), the MFA Forum, Nike, Gap Inc., Levi Strauss, the Central American Regional Network for Social Responsibility and Decent Work (IRSTD), and Mexican labour rights expert Arturo Alcalde.

Post-quota Mexico

Mexico is one of ten countries identified by the MFA Forum as particularly vulnerable in the post-MFA world. After three years of stiff job decline - from 2001 to 2003 a quarter of a million Mexican garments and textile workers have lost their jobs - the situation, according to official statistics, seems to have stabilized. Still, with overall employment in the industry down by 33.6% from the peak of 2000, the new free trade regime and anticipated shifts in global investment and sourcing patterns continue to bring fears of large-scale job losses.

With a total workforce of about 600,000 (about 20% of total manufacturing jobs), the garment industry remains one of the country's biggest employers, and in some parts of the country it is clearly the single largest source of jobs and local income.

"The end of the quotas system has been marked by factories closures, increased uncertainty and, downward pressure on working conditions, especially for those workers employed in smaller factories and among subcontractors," says Milisa Villaescusa of MUTUAC one of the co-organizer of the forum. Why the end of quotas would receive national attention in Mexico is not hard to understand.

Looking to the future

The public meeting and workshop provided Mexican civil society organizations the opportunity to question international buyers sourcing from the country about their plans for the future, as well as to debate the current and future impacts of the end of the MFA for garments workers and their communities, and to discuss possible industry survival strategies that include respect for workers' rights. Says Sean Ansett Gap Inc.'s Global Partnerships Senior Manager: "In our recently released 2004 social responsibility report, we state that although the end of the quota system gives us more control over where we do business, we do not intend to put all of our production in one place. We believe that we need a diverse sourcing network to mitigate geographic risk, increase speed-to-market and deliver the wide variety of products we sell. We also continue to encourage garment manufacturers to work with us and with others to improve the working conditions in the factories they own, operate or contract with. In order to do that, we are working to build labour standards directly into our buying decisions." And while the overall picture in Mexico is certainly dark - talk of Chinese competitiveness dominates the debate, there was also consensus that Mexico will remain for years to come a garment producing country.

Differing priorities

For Mexican industry leaders - like, for instance, Tony Kuri Alam, president of the National Chamber of the Garment Industry - a major preoccupation is the prevalence of illegal imports in Mexico's domestic market. By some estimates, the total volume of illegally imported garments represent more than 50% of the apparel products sold in the country. His concern is echoed by Adolfo Gott Trujillo, general secretary of the CTM-affiliated National Union of the Textile and Garment Industry. "Mexico has suffered because of products from other countries being smuggled into the country," says Gott. "Companies and trade unions in the sector need to work together to demonstrate to the authorities that we want to stop this smuggling." Mexican independent unions and labour rights groups in attendance are more concerned with the situation at the factory level in the maquiladoras and other garment factories. They argue that the situation calls for a broader debate that should include issues of worker representation - in particular the transparency of collective bargaining agreements - and ways to address increasing job insecurity. Representatives of the brands were asked to spell out their understanding of freedom of association in the Mexican context. If freedom of association does indeed appear in a company's code of conduct, they were told, considerable effort will be needed to effectively implement that provision in order to satisfy the concerns of Mexican workers. One unanswered question is what steps leading brands would be willing to take to contribute to job stability in the Mexican factories where they currently source.

Opportunities for collaboration

Despite the variety of sectors, perspectives and interests represented at the conference, there was general agreement on the need for follow-up discussion on possible strategies for the Mexican apparel industry to survive and grow. "To survive, the textile and garment industry in Mexico requires an agreement between business, the workers and the Mexican government on a set of new mechanisms, incorporating their diverse perspectives," says Arturo Alcalde, a Mexican labour rights specialist. "We need an agreed-upon standards of corporate social responsibility and an inspection and monitoring system in order to verify its application. The standards should guarantee the respect of the universally recognized human rights at work. This could give Mexico a competitive advantage in the international competition." The following day, participants in the civil society workshop discussed the need to look beyond their local realities and develop common proposals in order to effectively engage with industry and government at the national level. They decided to create a network of labour groups from Mexico's garment-producing centres and to collaborate on a joint research project to map changes taking place in Mexico's garment industry, including industry consolidation, factory closures, job losses, and impacts of these changes on workers and communities.

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