Globalization of Production in the Textile and Clothing Industries:

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East European full reintegration into the world economy had already started during the eighties, but the end of the decade and the beginning of the nineties saw a sudden spurt in that direction. This has taken the form not only of a swift trade reorientation towards the West, especially the EU, but also of new forms of inward foreign direct investment (FDI), subcontracting and cooperation agreements with Western enterprises. As a consequence, Eastern Europe has become deeply involved in the larger process of globalisation of production characterizing the international economy, where firms ' operations are becoming much more complex and pervasive than traditional arms-length trade and traditional international investment, including both…show more content…
Almost half of the Italian imports of clothing from Eastern Europe come from Romania and more than one fifth from Hungary, the rest being spread among the Czech and Slovak Republics, Bulgaria and Poland, in the order. Together with an increasing deficit for Italy, the share of clothing in total Italian imports from each CEEC has been increasing recently in all cases, and particularly so from Romania and Bulgaria, where it now stands at 41% and 27%, respectively, and from Hungary (12%). The two sectors behave asymmetrically: clothing looms from two to eight times larger in Italian imports than exports, while textiles are far more important in Italian exports, at the exception of exports to former Czechoslovakia. This was also the only country with which Italy ran a deficit in textiles (today with the Czech Republic). Previous studies conducted by the author (Graziani 1993, 1994a, 1994b, 1995) show a generalized relative specialization of the CEECs in most clothing products both on the EU and -3- on the Italian market. Moreover, in both markets import penetration ratios for the same are on the increase. Does this mean that Italian textile and clothing industry is losing ground vis à vis East European producers? The question is whether international trade data - like surpluses and deficits, market shares,
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