consideration in the textile industry, but some nations are positioning their fabrics as providing higher quality and thus capable of commanding a higher price. This is the case with Korea and Turkey as they compete with China (Epiro, 2005).
The textile industry has also suffered in recent years from the perception that workers are poorly paid and work under harsh conditions. Factories in Asia in general and China in particular have faced considerable criticism in this regard. Manufacturers and retailers in the United States are anxious to avoid any association with sweatshop labor, for example, and thus are conducting more frequent inspections of facilities where their goods are manufactured and are demanding better conditions for workers. This can be challenging for companies in those countries that compete directly with China, although the reforms sought by American companies have had a "ripple" effect throughout the industry as a whole (Becker, 2005).
In general, Mexico has been able to avoid the stigma of sweatshops within the garment industry. This is due in part to the structure in Mexico that has flourished under the North American Free Trade Agreement (NAFTA) in which factories located near the border with the United States take advantage of relatively low-cost labor in Mexico (compared to the United States) that can be used to produce garments that are then distributed to the United States with simple logistics. This reduces the transportation costs associated with bringing items from overseas. This arrangement allows Mexican companies to take advantage of low labor and transportation costs, and American companies to avoid the negative association with overseas sweatshops.
With the recent signing of the Central American Free Trade Agreement (CAFTA), Mexico will be facing increased competition for the American market from other Latin American countries. Guatemala, for example, may well seek to increase its pre...