９３

Vietnam and the End of the Multi-fibre
Arrangement: A Preliminary View
John THOBURN＊

Textiles and clothing（T&C）have been the archetypal ‘starter’ industries in industrialization. Following the examples of Britain in the １８th century and Japan in the ２０th,
many developing countries have stimulated their economic growth by becoming exporters of T&C. World trade in T&C was tightly controlled for the thirty years from
１９７４ under a series of international Multi-fibre Arrangements（‘MFA’s）．Access to major markets–principally the US and the European Union–was restricted by annual quotas imposed on exporting countries, under which total exports in a series of tightly defined categories were limited to volumes specified by country. In １９９４ as part of the‘Uruguay round’ trade negotiations under GATT,１ a gradual phase-out of the MFAover a ten-year period was agreed. This was the Agreement on Textiles and Clothing（‘ATC’），under which all quotas were to be abolished by the end of December ２００４，
with textiles and clothing being ‘integrated’ into the normal WTO rules governing trade.

By restricting the exports of major garment and textile producers, particularly China,
not only did the MFA seek to protect domestic producers in Western markets, but it
also served to encourage producers in other developing countries to become new exporters. Now that the MFA/ATC is no more, a number of developing countries havebecome vulnerable to competition from China and other large producers such as India.
This paper looks at the experience of Vietnam２ as a relatively new entrant to theglobal market. Vietnam is not as vulnerable（dependent on T&C exports）as some countries, since it has a relatively diversified export portfolio, but T&C exports are its largest manufacturing export. By considering the case of Vietnam, this paper hopes to provide partial answers to the question of how vulnerable countries can stay in the game,＊

Visiting Professor, Graduate School of International Cooperation Studies, Kobe University.
Emeritus Reader in Economics, School of Development Studies, University of East Anglia, Norwich, UK.
Email: j.t.thoburn@uea.ac.uk

Journal of International Cooperation Studies, Vol.１
５, No.１（２
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post-MFA３, and–indirectly–whether T&C can continue to be drivers of export-oriented
industrialization for new entrants to the global economy.
Section １ now looks at the issue of vulnerability and further justifies the choice ofVietnam as a case study. Section ２ introduces key characteristics of world T&C trade,including the role of global buyers and the pressures facing all producers. Section ３
discusses the predictions about the impact of the end of the MFA and compares theseto the initial outcomes. Section ４ concludes.
１．Vulnerability and the Choice of Vietnam as a Case Study
１．
１ Vulnerability: Textiles vs Clothing
Although the textiles and clothing sectors are often referred to as if they were a single composite industry, textiles are more capital intensive than clothing, and have become increasingly so（OECD ２００４：２１）．Vulnerability to competition usually refers primarily to clothing exporting, although a few developing countries, such as Pakistan, aresignificant exporters of textiles and face Chinese competition in their export markets.
Historically textiles have been more of a driver of industrialization in low income
countries than clothing, since garments can be produced in households or by smallscale tailoring using purchased fabrics. Textiles, though more capital intensive thanclothing, are typically less capital intensive than the manufacturing average.４ Often built
up under tariff protection as part of import substituting industrialization policies, textiles
in developing countries may lack the ability to produce at international standards ofquality. And as an import-competing industry, they have been vulnerable to competitionin their domestic market as countries reform and liberalise their trade regimes.５ As aresult of this competition, textile production in the world economy has become moreconcentrated geographically（Brenton and Hoppe ２００６：１５１）．

Countries that have entered the world market in recent years as garment exporters
often have not done so on the basis of clothing using domestic textiles. Indeed, garment exporting to take advantage of unused MFA quotas may not even have been the
result of domestic firms expanding into global markets, but of inward direct foreign investment（‘DFI’）．In Cambodia, for example, the industry is almost entirely in the hands

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

９５of foreign firms, although in Bangladesh it is predominantly locally owned（UNCTAD
２００５：１２）；but in both cases the export of clothing depends on imported fabrics. Section ２ will show the key role that global buyers have played in such developments. In
this paper we focus on vulnerability with regard to garment exporting, taking textile
production into account where it affects export competitiveness in clothing. Textiles
themselves, however, are important in world trade, accounting for ４２ per cent of total
world T&C exports in ２００５（WTO ２００６）．This partly reflects trade in non-clothing
items such as industrial and home textiles,６ but it is also the result of the tradeintensive nature of clothing production. Even China, the world’s largest garment exporter and textile exporter,７ is also the world’s second largest textile importing country
after the US（WTO ２００６）．
１．
２ The Choice of Vietnam
Table１illustrates a number of countries that are heavily dependent for their export
earnings on garment exporting, including Cambodia and Bangladesh, already mentioned.
While Vietnam is by no means as heavily dependent on garment exporting as theother countries listed, it is interesting for a number of other reasons too. As Table ２
shows, it experienced an exceptionally rapid increase in its T&C exports in the １９９０s,
as part of its entry into the global economy under its doi moi economic reform programme, started in the mid−１９８０s and following the collapse of its export markets inthe former Soviet Union and Eastern Bloc at the start of the １９９０s. Whilst its highTable １

Dependence on clothing exporting（Shares of total merchandise exports，２００３）

Cambodia

８４％Bangladesh

７６％Lesotho

６５％Mauritius

５３％

Sri Lanka

５２％

Laos

４２％

Vietnam（share of exports）

１８％（incl textiles）

Vietnam（share of manufacturing employment）

２
３％（incl textiles）

Sources：（UNCTAD ２
００
５：４），except for Vietnam. For Vietnam sources
see Nadvi and Thoburn（２００４a and ２
０
０
４b）

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export growth rate was from a low base, a comparison with South Africa–another new
global entrant in the １９９０s following years of economic seclusion under apartheid –is
instructive.８ While Vietnam’s T&C exports were less than South Africa’s in １９９０，by
２００１ they were almost five times greater.
Vietnam’s performance as a T&C exporter was also remarkable in that until ２００１ it
was effectively cut off from the US market. Although the trade embargo imposed by
the United States following the ending of the Vietnam-American war had been lifted
in １９９４，the US imposed substantially higher–and in T&C effectively prohibitive–tariffs
on Vietnam as Vietnam was then not a member of the WTO. The conclusion of a bilateral trade agreement between the US and Vietnam in ２００１
（the ‘USBTA’）opened the
US market to explosive growth in Vietnamese T&C exports. Until ２００１，about ８０per
cent of Vietnam’s exports were divided almost equally between the European Union
and Japan, a bilateral agreement having been concluded with the EU in １９９２，while Ja-

Table ２ Exports of Textiles and Clothing，１
９９０−２００１：
Vietnam and Comparators before the US Bilateral Trade Agreement
Average annual
growth rate
１９９０

２
００１

１９９０−２００１

Exports（US $million）
CHINA
Clothing

９，
６６９

３
６，
６５０

１
３％

Textiles

７，
２１９

１
６，
８３０

８％

２０

２，
０００

３４％

Clothing

８１

２２２

５％

Textiles（narrow definition）

１３１

２３２

５％

Clothing

１９５，
０００

６％

Textiles

１４７，
０００

３％

VIETNAM
Clothing and Textiles[in１９９８C／（T&C）＝８８％］
SOUTH AFRICA

WORLD

Sources: see Nadvi and Thoburn（２００４a and b）for Vietnam;
rest from WTO（２００２）

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

９７pan did not impose MFA quotas or prohibitive tariffs. Following the start of the USBTA, Vietnam’s exports of T&C to the US rose from a negligible amount to almost
２．
９ billion in ２００５９, more than Vietnam’s total to all destinations in ２００１．Of the Vietnamese T&C exports to the US in ２００５，９５ per cent were of clothing, reducing thealready low proportion of textiles in the T&C total in the late １９９０s（see Table２）．

Vietnam, then, appears a rather formidable new entrant to world markets. After an
initial grace period, the US imposed MFA quotas on Vietnam in May ２００３
（Nadvi and
Thoburn ２００４b：２５５）．Following the end of the MFA with effect from １ January ２００５，
the US continued to impose MFA quotas on Vietnam as it was not a WTO member,while virtually all other major exporters, including China（at least initially–see later），
had unrestricted access. As of the beginning of ２００７，Vietnam has been admitted to
WTO membership, but it is too early to say what will be the impact on its T&C exports to the US.

Vietnam is interesting as a case study also for two further reasons. First, like China,
its trade liberalization programme has followed an ‘East Asian’ pattern, where exports
have been developed rapidly while the domestic market has remained protected（Jenkins
and Thoburn ２００３：１）．Now Vietnam’s entry into the WTO and its commitments under the USBTA are driving import liberalization.１０ Secondly, and again like China, its
T&C sector has a more complex industrial structure than those of other new entrants
to the global market like Cambodia or Lesotho. State owned enterprises（‘SOEs’）comprised ２５ per cent of Vietnam’s garment output in ２００４，while the domestic private
sector comprised ３５ per cent and the foreign-owned sector ４０ per cent,１１ although thedomestic private sector was underrepresented in its share of exports. Vietnam’s T&C
SOEs have undertaken great restructuring as part of the country’s moves into theglobal economy, as also have China’s（Eberhardt and Thoburn, ２００７）．
２．Global Textile and Clothing Trade
Global T&C trade is tightly organized within global value chains（‘GVC’s）．This
form of institutional structure controls which countries, and which producers withinthose countries, can enter into global production, and whether their position is sustain-

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２．
１ Global Value Chains１２
To export clothing, producers need to gain access to global value chains. Analysis
of GVCs looks at the process of selling a product from the supply of raw materials
through to the final distribution and marketing of the product（and even recycling）．
But a GVC is more than a series of input-output relations. Economic actors at certain
stages of the chain exercise control over entry and over upgrading（of products andprocesses, and functions）by producers: that is, they exercise governance and they canearn ‘rents’（surplus profits）．Garments are buyer-driven GVCs, where barriers to entry–and rents–are concentrated at the retail end. Production in clothing GVCs is organisedby many economic actors without their own factories, though some（sometimes former）manufacturing firms outsource too（eg Levy Strauss, Sara Lee）．Buyers include
department stores（such as JC Penney），speciality stores with their own brand（such as
The Gap），brands largely without stores（such as Liz Claiborne），supermarkets（suchas Tesco），discounters（such as Walmart），and mail order firms. Note though that the
US market is more homogenous than the markets in Europe, which exhibit many characteristics of organization and demand that are somewhat country-specific（Palpaceur etal ２００４）．In consequence, US orders tend to be much larger and often for lower quality products; this has implications for the kinds of producers who enter the chain.
Another important feature of GVCs in garments is what Gereffi（１９９９）has called‘triangular manufacturing’. That is, production is often organized not directly with producers in developing countries but via garment manufacturing companies based in
Hong Kong, Taiwan or Korea. These manufacturing companies may themselves set up
factories in countries from which buyers wish to source, organize fabric supply（sometimes from textile factories of their own），or subcontract from domestic suppliers. This
arrangement adds further to barriers to entry for domestic producers in developing
countries, in that global buyers often prefer to source from existing vendors（such as
Hong Kong manufacturers）setting up in new locations than from domestic producers inthose locations.１３

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

９９What then drives global buyers’ pattern of world sourcing, and how is this affectedby the end of the MFA? There are three key factors!Distance and lead times!Costs, particularly labour costs（wages relative to productivity）!Trade distortions: the MFA in the past, but also tariffs and preferences
For high and fast fashion items, particularly in womenswear, proximity to the final

market is required. Items must be available quickly on the shops’ shelves if they are
to sell before the current fashion changes. This leads to sourcing from adjacent countries such as Turkey in the case of the European Union and Mexico in the case of
the US. There is some conflict between lead times and costs, since, for buyers to access lower labour costs, they generally have to source from further away. So the further away the supplying country, the more likely the buyer is to source either for very
standard items, like T-shirts or jeans from countries like Lesotho, or items where there
is little fashion change, such as men’s suits from South Africa.

The ‘fundamental’ determinants of buyers’ patterns of sourcing–lead times and costs–
must be considered within a framework of complex trade distortions. The availabilityof unused MFA quotas in the past has been a major stimulus for buyers to move to
new countries of supply and for the foreign investors working for those suppliers toundertake ‘quota-hopping’ DFI. Now, without the MFA, trade preferences and tradebarriers fulfill a similar role. Clothing exporters still face highly differentiated tradebarriers in different markets, and the average level of tariffs on T&C is high relative
to that of manufactured goods as a whole（OECD ２００４：５７）．For example, Bangladesh’s clothing exports can enter the EU market free of import duty since Bangladesh
is a least developed country, whereas Vietnam has to pay around １０ to １
２ per duty
since it is not. Vietnam（as a developing but not least developed country）qualifies for
a ２０ per cent reduction in the duty under the EU’s Generalised System of Preferences
if it meets the EU’s stringent rules of origin, but where its clothing is made from imported fabrics it must pay the full duty. In contrast, clothing from South Africa–aricher country than Vietnam–can enter the US market duty free under AGOA（the US
Africa Growth and Opportunity Act），although only if they use African（or US）fabrics

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Buyers are also influenced by whether potential producers of their garments canmeet environmental and social compliance standards, such as no excessive overtime, nouse of child labour and the avoidance of pollution, although such compliance is a necessary rather than a sufficient condition for sourcing. Some countries have been able toenhance their appeal to buyers by stressing their adherence to social standards: Cambodia is a case in point（ILO ２００５：３６−４１）．Large buyers, especially those from the
US regularly audit their suppliers for compliance, although compliance requirements areless strict in cases where traders–usually from East Asia–source from smaller firms（Nadvi and Thoburn，２００４a：１１５−８）．
２．
２ Increasing Pressures on Suppliers
At the time of the abolition of the MFA, a number of long term challenges were
facing clothing exporters. These remain important and include!Demands by global buyers for cheaper products, higher quality, and shorter lead
times

!Pressures to meet environmental and labour standards, as noted in the previous
subsection!Buyers wishing to reduce number of suppliers–both in terms of countries, and ofvendors in each country, in order to reduce transactions costs!Competition from China, with predictions that China would sweep the board once
MFA quotas had gone

These pressures reflect pressure on buyers as a result of increased competition at theretail end（OECD ２００４：chs １ and ２；UNCTAD ２００５：７−１２）．The end of the MFA
has offered buyers a chance greatly to reduce their transactions costs by limiting their
numbers of suppliers and supplier countries.
３．The End of the MFA and Its Consequences
The end of the MFA from １ January ２００５ saw a situation where pressures onclothing suppliers had been increasing, and where producers in countries with previ-１０１

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

ously underutilized MFA quotas were vulnerable to buyers switching their purchases
elsewhere and to foreign investors moving out. In clothing production, a factory–
whose capital equipment mostly consists of sewing machines–can be moved out in amatter of weeks. Textile production, especially the production of yarns, has heavier andmore expensive capital equipment and is therefore less footloose. Now that the MFA isover, trade preferences exert a greater influence on sourcing–for instance pushing buyers towards a country like Bangladesh–than hitherto.
３．
１ Predictions about the End of the MFA!
One of the most influential set of predictions was that made by Nordas（２００４）forthe WTO, arguing that China was likely greatly to increase its share of the US andEU market（see Table３）．China’s strengthening position was more pronounced in the
US than the EU, and more pronounced in clothing than in textiles.

Table ３

Estimated percentage market shares in the US and EU before andafter elimination of quotas

EU clothing

BeforeAfter

US/Canadaclothing

Before

After

China

１８

２９

China

１６

５
０

India

６

９

India

４

１５

Turkey９６

Mexico１０３

Other ’top ten’exporters

３７

３２

Other ’top ten’exporters

４６

２
２

Rest of world（incl Vietnam）

３０

２４

Rest of world（incl Vietnam）

２４

１０

EU textiles

BeforeAfter

US/Canada
textilesBefore

After

China

１０

１
２

China

１１

１
８

India

９

１
１

India

５

５

Turkey１３

１２

Mexico１３

１１

US and Canada

８

７

EU

１６

１
４

Other ’top ten’exporters

２４

２４

Other ’top ten’exporters

３５

３
１

Rest of world（incl Vietnam）

３６

３４

Rest of world（incl Vietnam）

２０

２１! ００４）
Source: adapted from Nordas（２

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３．
２ The Initial Events in ２
００５１４
Initially there was rapid expansion of exports from China to the EU and the US after MFA quota removal on １st January. Some buyers rushed in, though others not. In
July and August ２００５ garments from China were held in EU ports, and from May toAugust ２００５ Chinese clothing exports to the EU and US more or less stopped. In
September ２００５，the EU released Chinese products from the warehouses in time for
Christmas. New trade restrictions on China were introduced, however: the EU established quotas for imports from China for the period ２００６−７，pre-set but with some
growth. After the EU had decided on quotas, the US followed, imposing quotas on
China for the period ２００６−８．Compared to the EU, the new US quotas had less generous growth provisions than the EU’s and covered wider range of products than theEU（eg the US included woven shirts and the EU did not）．Quotas on China underthese two new systems were set in value terms, not volumes as in the old MFA.
３．
３ Performances of Suppliers
Tables４ and ５ show purchases from the US and the EU, respectively. The US data
shown include textiles. These are of minimal importance for Vietnam（or Cambodia,
Bangladesh or Lesotho）but the inclusion of textiles allows us to see how Pakistan andIndia have been able to increase their exports to the US substantially. The table makes
Table ４
（US $ billion）

US imports of T&C（̀total MFA categories'）
２
００４

２００５

World

８３．
３

８９．
２

Change for year ending August ２
００６
２．
９％

China

１４．
６

２２．
４

１３．
５％

Vietnam

２．
７

２．
８

２
４．
５％

Cambodia

１．
４

１．
７

２７．
２％

Bangladesh

２．
１

２．
５

２１．
４％

India

３．
６

４．
６

１７．
６％

Pakistan

２．
５

２．
９

１
８．
０％

Mexico

７．
８

７．
２

−１１．
３％

Sub-Saharan Africa

１．
８

１．
５

−１９．
５％

Lesotho

０．
４６

０．
３９

−１４．
４％

SouthAfrica

０．
１６

０．
０８６

−４
６．
２％

Source:http://otexa.ita.doc.gov/

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

Table ５（million Euros）

Imports of garments into EU−１５
２００４

２００５

% change

China

１
１０３７．
９

１６３９８

４８．
６

Vietnam

６０９．
６

６６２．
９

８．
７

５１７

４７４．
４

−８．
２

India

２４３３．
８

３１９６．
８

３１．
３

Pakistan

９０５．
８

７７０．
２

−１５．
０

Bangladesh

３６８９

３５００．
９

−５．
１

Lesotho

０．
８４３

０．
６３２

−２５．
０

South Africa

５６．
７

３９．
２

−３０．
９

Mauritius

５１２．
７

４４１

−１４．
０

Turkey

７５１９．
９

７８６８．
４

４．
６

Cambodia１
０３

Source: Eurostat

it clear that there have been losers too, most noticeably in Africa, but Mexico has
seen its exports fall too.
３．
４ Vietnam
Vietnam at the moment seems to be staying in the game, and is seen by buyers as
an alternative to China, particularly now that China is restricted in the US market until
２
００８．Vietnam has skilled workers and low wages, although the country has issues ofcorruption, which affect the movement of goods. However, it has various problems.
First, its textile industry has proved inadequate to meet the needs of garment exporting,and some three-quarters of fabrics used for export garments are imported. Fabrics areoften supplied by buyers, and the Vietnamese garment manufacturers are paid a processing fee. Some textile SOEs have integrated forwards into garment production using
their own fabrics（Thoburn et al ２００３），but this makes them inflexible, and they often
do not know how to source fabrics from elsewhere. As one buyer in Hong Kong explained, buyers want vertical production not vertical integration. That is, they want allstages of production in one country or area, but not necessarily in vertically integrated
and inflexible firms.

Second, Vietnam T&C production is largely confined to manufacturing, and does not

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include product development. Even Hong Kong foreign investors in Vietnam do theirproduct development with buyers in the manufacturer’s Hong Kong office and just use
Vietnam for manufacturing.

Thus Vietnam’s garment exporting seems to generate less value-added in the country
than might be first supposed. To increase its gains, Vietnam requires development of
its textile industry, particularly through foreign investment to generate international standards of quality. It requires more skill in textile sourcing, even if these are not produced domestically, to gain the control to move towards ‘full package’ production.
３．
５ China
Although China is a formidable competitor, in the longer run it faces some problems.
Its wage levels are rising, especially in the southern province of Guangdong, one of
the hearts of the export garment industry. Wages have been rising too in central
coastal China, the greater Shanghai region, an historic centre of textile production. Although moves to the interior of China to access lower wages are possible in principle,
interior provinces suffer from poor infrastructure, long distances to market and it isdifficult for firms to persuade managers to go. Also, people from the interior are becoming less willing to migrate and live in dormitories, which has been a way in thepast that the coastal regions have ensured a labour supply. More fundamentally, there
will be a future labour shortage as China’s one-child policy affects first population
growth and reduces the size of the working population. Some regions are trying to get
out of T&C（like Shanghai），and buyers say that China is keen for ‘diplomatic reasons’ to leave lower value-added products to less developed countries.
４．Conclusions and Reflections
Barriers to entry into export garment production have become higher in recent years
as a result of changes at the retail end of the global value chains for garments. There
has been increasing concentration in the US retail sector : new entrants have beenchallenging existing firms, with a large fall in the share of department stores and arise of discounters like Walmart. There are now shorter fashion seasons, causing buyers
to search for lower prices for given quality, and for faster lead times. So firms need

Vietnam and the End of the Multi-fibre Arrangement: A Preliminary View

１０５

to keep prices low and to upgrade their products, processes, and functions. Buyers require producers to be able to work with them in developing new products, and prefer
to source from countries with a strong textile industry in order to shorten lead times.
In this sense the barriers to entry, and to the sustainability of the position of recent
entrants, have grown larger, and T&C exporting has become a less easy route to industrialization than in the past.
At the same time, the continued existence of a distortionary１５ pattern of trade preferences increases the trade-intensity of the global T&C industry. For instance, Jordan has
become an exporter of clothing to the US on the basis of a bilateral free trade agreement with the US, while importing its textiles from China. Vietnam has succeeded in
becoming a major exporter of clothing without strong preferences, first to the EU１６ andJapan, and from ２００１ to the US. Nevertheless, it remains vulnerable if the restrictions
on Chinese T&C exports to the EU and the US are lifted after ２００７−８，although it
is also likely that buyers will wish to retain some degree of diversification in theirsourcing, even though their range of suppliers is currently being reduced. However, Vietnam’s lack of a globally competitive textile industry of sufficient capacity to service
its export garments remains a significant weakness, and Vietnam has far to go before
it becomes a partner in product development.
Notes
１．GATT is the General Agreement on Tariffs and Trade, the forerunner of WTO, the World Trade Organization.
２．For an introduction to Vietnam and its economy, see Thoburn（２００７）．An overview of globalisation issues
in Vietnam, as they relate to poverty, can be found in Thoburn（２００４）．See also Van Arkadie and Mallon（２００４）on the Vietnamese economy and reform programme.
３．Strictly speaking, the ATC replaced the MFA in １
９９４．However, virtually everyone has continued to referto the arrangements as the MFA, and so do we.
４．This is true of Vietnam, measuring capital intensity in terms of non-wage value-added per worker（Thoburn
et al ２００
３）．
５．A classic case is South Africa, where a trade liberalisation programme in the １９９０s resulted in much increased import penetration. South African companies adjusted, often developing exports in niche products tomake up for their losses of domestic market share, but at the cost of large losses of employment as they restructured to improve labour productivity. See Roberts and Thoburn（２
０
０
３）
．

国

１
０６

際

協

力

論

集

第１
５巻 第１号

６．Less than half of world textile production is for use in clothing（OECD ２
０
０
４：３
６）
．
７．This comment refers to exporting countries, not counting the European Union collectively as a ‘country’. In２００３，China as a textile exporter was second to the EU−１
５（UNCTAD ２
０
０
５：４）
．
８．South Africa was also used as a comparator country to Vietnam in the research on globalization on which
Nadvi and Thoburn（２
０
０
４a，２
０
０
４b）report.
９．See http://otexa.ita.doc.gov/msrcty/v５５２０．htm, accessed February ２００７．
１０．Import liberalization has also been driven by Vietnam’s commitments under AFTA, the ASEAN Free TradeArea, although there is not space here to discuss them. See Thoburn et al （２
０
０
３：１
０）
．
１
１．The corresponding figures for Vietnam’s textile sector were ４
４ per cent for SOEs，３０ per cent for the domestic private sector and ２
７ per cent for the foreign sector（VNSY ２
０
０
４）
．
１
２．On global value chains, see Nadvi（２
０
０
４）
．
１
３．This comment is based on interviews by the author with buyers based in Hong Kong in ２
０
０
１，２
０
０
２ and
２
０
０
６．Hong Kong is a key base from which British and US buyers organize their world sourcing.
１
４．These comments are based on interviews in Hong Kong in spring ２００
６．
１
５．This is not to say that all preferences are undesirable. Clearly the EU’s Anything but Arms preferences forleast developed countries, under which Bangladesh benefits, or the US Africa Growth and Opportunity Act,
which gives African countries duty free access, can be justified on the basis of special help for the poorest.
Nevertheless, there is a strong suspicion that some preferences are more political than developmental.
１
６．Although Vietnam has GSP access to the EU, often its clothing exports do not qualify under EU rules oforigin, because the fabrics are imported.

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