1. Fashion Merchandising
2.04 Understand the Global Nature of Fashion

2. Global Trade in the Fashion Industry
Key terms:,,, export sales agent, franchising, full package production, import commission house, import merchants,, international retailing, joint venture, licensing agreements,, multinational corporations (MNCs), parity,, resident sales agent, value added
Global trade trends and policies
Impact of apparel production for developing nations
Major trade regions of the world
International sourcing for U.S. fashion importing
Market opportunities for U. S. fashion exporting

3. Global Trade Trends & Policies
Globalization is the growth of international commerce and communications that makes national boundaries less important, especially in economic matters
In recent years, due to trade trends and government policies, international trade has grown faster for fashion goods than for any developing nations

4. Global Trade Trends & Policies
Trade involves imports, exports, and exchanges of money
Imports are goods that come into a country from foreign sources, or what a country buys from other countries
Import penetration is the percentage of imports in a country’s total market consumption.
It measures foreign against domestic goods

5. Global Trade Trends & Policies
Imports account for more than 60% of the total US textile and apparel market
A country’s balance of trade is the relationship between the values of its imports and exports, described as being a deficit or a surplus
Trade deficit occurs when imports exceed exports. The US has a large trade deficit
Trade surplus exists when exports exceed imports. Japan sends more out than it brings in

6. Free Trade Vs Protectionism
Free trade is a government’s policy of allowing goods to flow freely in and out of its economy, without interference.
Protectionism is the opposite of free trade. It includes many government imposed trade restraints

7. Free Trade VS Protectionism
Market disruption: a situation, usually caused by too many imports, that threatens a particular industry with products that are in direct competition with that industry
Lower sales of domestically-produced goods in the US and sever price competition has weakened some industries.

8. Free Trade Vs Protectionism
Transshipping is the rerouting of goods to evade quota limits
Dumping is the selling of goods at lower prices in foreign markets than in the home market.
The World Trade Organization (WTO) is an international trade accord that reduces tariffs, quotas, and other trade barriers around the world
Agreement of over 150 countries that negotiaties and enforces global trade rules
Serves as an international trade court for the settlement of differences

9. Impact for Apparel Production for Developing Nations
As counties begin to develop, companies form to make and sell specific products
Eventually, they enter into the marketplace which turns into economic growth
Textile and apparel industries are usually the first internationally competitive industries to be formed in emerging economies

10. Impact for Apparel Production for Developing Nations
Structural adjustment refers to the process of industries and economies adapting to long- term shifts and economies adapting to long- term shifts in competitiveness.
A comparative advantage is the ability of one nation to produce a certain goods or services better than other nations because of specific circumstances

11. Trade with Developing Nations
Before trading with developing nations, companies should learn about the other countries’
Political stability: can influence the degree to which a country’s laws and regulations are subject to change and are enforced
Economic climate affects businesses’ abilities to earn profits in a reasonable amount of time
Infrastructure involves the existence and condition of roads, transportation systems, electricity, telephones, technology, etc
A nation’s culture is is set of social norms or values

12. The World’s Major Trade Regions
Asia-Pacific Plus India
Europe Plus North Africa
The EU is a family of over 25 European countries united for economic stability and with common policies of free trade among the members

13. The World’s Major Trade Regions
The Americas
The North American Free Trade Agreement (NAFTA) set up an open trading zone among the US, Canada, and Mexico
Value Added is the increase in worth of products as a result of a particular work activity
If the cut fabric parts of a jacket are worth $8 each when they are shipped offshore, and each jacket is worth $10 when it comes back, the value added while it was out of the US is $2 per jacket
Latin American Parity
Parity is equal monetary value or treatment by the law
Latin American countries are moving toward full package production, focusing on supplying design and sample work, fabrics/findings/trims, all parts of construction

14. International sourcing for U.S. fashion importing
Purchase through domestic wholesale importers
Import merchants buy and import particular classifications of goods
A resident sales agent represents and is paid by a group of foreign manufacturers
An import commission house also serves as a brokerage between domestic buyers and foreign sources

15. International sourcing for U.S. fashion importing
Buying Directly from Foreign Sources
Export sales representatives represent selected manufacturers, but do not maintain a wholesale inventory
Using Foreign Contractors
Licensing Agreements
Franchising
Joint Ventures are agreements that bring necessary skills or products of two companies together for added strength
Company-Owned Foreign Facilities

16. Market Opportunities
1. International retailing, also called cross-border retailing, involves retail company operations that serve customers in multiple countries.
Mail order retailers
Internet retailers
US retailers opening malls in foreign countries
Multinational corporations (MNCs) operate globally and have direct investments in several different countries

17. Market Opportunities 2. Satisfying Market Differences
Countries that sell goods in another country must understand the cultural attitudes and practices of the people in that country
Differences in languages, beliefs, religion, race, income distribution patterns, and customs