Why textile and clothing industries are shifting to the third world

The 1970s witnessed important changes in the international division of industrial labour. Textiles and clothing were the major examples of industries where comparative advantage shifted in favour of developing countries. The present article discusses the reasons why textiles and clothing are important at the early stage of industrialization. It then examines the statistical relationship between the size of these industries and GNP per capita levels and finds this to be strongly negative. The article concludes that this points to the unrealistic nature of developed countries' attempts to maintain textile and clothing industries at their present size through protectionism, and that this will be an inadequate response to future changes in the international division of labour.