Global shifts in garment production have diminished S. Florida’s role as trade hub
Sun-Sentinel.com, FL
Predictions that Asia will replace garment production from Latin America — hitting hard at South Florida as a regional trade hub — are coming true.
China supplied 26 percent of U.S. imports of clothes last year, roughly double the share it had before quotas ended on world garment trade in 2005.
Central American and Caribbean nations, once the top U.S. supplier, saw their share of U.S. apparel imports plunge below 12 percent, less than half of China’s soaring level, new U.S. Commerce Department data shows.
South Florida is taking the hit, because it long has served as the hub for shipping U.S. fabric to the Caribbean Basin and for receiving finished garments for distribution to stores nationwide. The two-way garment trade is worth billions of dollars a year and serves as a staple for South Florida ports.
Today, South Florida handles less of the two-way garment trade, and more clothing imports from Asia can’t make up for all the volume losses, executives said Tuesday at an international apparel trade show in Miami Beach.
The stakes are enormous in the world’s $400 billion-a-year apparel business, likely the most global of all industries.
Even mammoth China is feeling the competitive heat, as its costs rise with red-hot economic growth and a strengthening currency.
Some U.S. companies are diversifying production from China to other Asian nations, especially lower-cost Vietnam and Cambodia, or to India, where fabrics also are readily available.
Sparking the moves is the lifting in 2005 of a decades-old quota system that limited the amount of garments countries could buy from each other. The new, more open system means production can flow more easily to where it makes most financial sense.
Industry analysts long predicted the change would benefit Asia, especially China because of its sophisticated fabric production and relatively low wages.
Some Caribbean Basin producers, with costs higher than China’s, aimed to compete by making more fashion items at the last minute for the nearby United States. But others lacked the capital or technical skills to make the transition and folded.
In the Dominican Republic, the No. 3 trade partner for South Florida, the number of apparel jobs fell by more than 35 percent to roughly 50,000 people since quotas ended. Pants maker InterAmericana Products International laid off 11,000 people just in the past few months and closed, Dominican executives said.
To compete, some Dominican manufacturers, including Grupo M, are expanding into neighboring Haiti, where wages are lower. They’re excited about a new U.S. trade law dubbed HOPE that boosts incentives for manufacturing in Haiti, the Americas’ poorest country.
“The future for Dominican factories lies in co-production with Haiti to balance costs,” said Fernando Capellán, president of Grupo M, which employs 2,000 people in Haiti.
Central American producers are bullish on new fabric factories being built that will allow them to more quickly make clothes from concept to finish.
North Carolina’s International Textile Group, for instance, is building a $100 million denim factory in Nicaragua that could provide enough denim for 15,000 sewing-machine operators. But attracting investment in factories and building them will take time, said Roberto Bequillard, a principal at the Miami-based Argus Group, which operates growing apparel operations in Nicaragua and El Salvador.
Doreen Hemlock can be reached at dhemlock@sun-sentinel.com or 305-810-5009.
