Exploring economics: the secret life of t-shirts
Exploring economics: the secret life of t-shirts

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Exploring economics: the secret life of t-shirts

3 Value added in the supply chain

Using production and trade data as evidence, Section 4 looked at which countries were most involved at each stage of the supply chain for cotton. The data showed that firms involved in the various stages of the supply chain for a cotton t-shirt were located in many different countries.

The following table is a summary of the findings in Section 4 showing which countries were prominent at each stage of production.

Table 5 Summary of the main actors in the supply chain of producing and selling a t-shirt

Cotton exporters Textile and spinning Making Retail
China China Bangladesh USA
USA Bangladesh China Germany
India Vietnam Turkey Japan
Pakistan Turkey Germany France
Vietnam Indonesia India UK
Turkey Hong Kong Italy Spain
Australia Italy Spain Netherlands
Hong Kong South Korea Vietnam Italy
Brazil Germany Netherlands Korea
Italy Mexico Honduras Hong Kong

Activity 16

Identify three countries which feature as important participants in more than one stage of production. What do you notice about the countries who are important in the retail stage, as measured by the top ten importers of garments?

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Answer

There are a number of countries who feature at more than one stage of the supply chain. China features as being an important producer, spinner and maker of cotton garments but does not feature in the top retailing countries. Bangladesh is a key player in the middle part of the supply chain which includes spinning, weaving and making the garment itself. Vietnam and Turkey are important at the first three stages of the supply chain but not at the retail stage. The countries that feature strongly at the retail stage are very different to those countries which dominate as suppliers in the earlier stages of the supply chain with the USA and European countries such as the UK and France now important in this final stage. Interestingly the United States was a key supplier at the beginning and end stages of the supply chain but not in the middle.

Table 5 and the discussion in Activity 16 show that not only are the firms involved over the life of a t-shirt located in many different countries, but also that the countries in which these firms are based varies across the supply chain. This section will use the information summarised in Table 5 to determine which countries receive the greatest benefit from the t-shirt production and sale.

To help us identify where in the supply chain most contribution is made to the final garment in terms of value the concept of value added will be used.

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