GENEVA — With the economic slump projected to deepen worldwide in 2009, marked by hikes in unemployment and declines in output and consumer demand, projections are for contractions in international trade, accompanied by calls for protectionist measures.
The textiles and apparel industry is not expected to be spared from the economic onslaught, but overall the sector is anticipated to be impacted less than more vulnerable ones, such as automobiles, housing, travel, machinery and other big-ticket items normally more affected by recessions, experts said.
Last month, the World Bank, in its report on global economic prospects for 2009, forecast world trade volume will decline for the first time since 1982, by 2.1 percent, down from 2008’s estimated 6.2 percent increase. The World Bank projected China trade to grow by only 4.2 percent, down from 10.1 percent expected for 2008.
Heiner Flassbeck, chief of globalization and development strategies at the United Nations Conference on Trade & Development, said he views the projections by the World Bank as “still overly optimistic,” and added he believes “China’s trade volume could be less.”
In a recent trade paper, Gary Clyde Hufbauer and Jeffrey J. Schott, senior fellows at the Washington-based Peterson Institute for International Economics, argued that even with bold fiscal and monetary responses guided by President-elect Barack Obama and Federal Reserve Board chairman Ben Bernanke, “hard times are likely to endure until 2010.”
The recession, they maintain, “will give plenty of time for opaque, but harmful, protectionist policies.”
Aside from industrial subsidies, this could include, they said, resorting to policies such as boosting applied tariffs to higher-capped bound levels — India hiked its steel tariffs soon after the G20 summit on the financial crisis in Washington in November. Other measures could see World Trade Organization members imposing a variety of trade remedies to protect domestic firms from foreign competitors, such as antidumping and safeguard quota measures.
Munir Ahmad, executive director of the International Textiles & Clothing Bureau, said the economic slowdown will affect demand for all goods, including textiles and apparel. The chief of the ITCB, an umbrella group for textiles and apparel exporting nations, said trade “litigation is the big fear in 2009” and anticipated there will be friction over textiles and apparel trade as competition heightens.
As of Jan. 1, China’s textiles and apparel trade to the U.S. is free of quota restraints agreed upon in 2005. On the troubled Doha round of global trade talks, Ahmad, echoing views shared by many top trade diplomats, said the negotiations will go on, but he expected “no breakthrough before early summer.”
People around the world are “uncertain about the future, in a wait-and-see mood. That’s why they’re not investing and withholding new investments all over the place. Wait until the dust settles,” said Flassbeck.
Formerly Germany’s state secretary for the economy, Flassbeck said not enough is being done by surplus economies such as the European Union countries, particularly Germany and Japan, to stimulate demand. However, he said the estimated $800 billion U.S. stimulus package being promised by President-elect Obama “is quite something” and worthwhile, and could see the American economy “come out of the recession first.”
“Sometime in the autumn of next year , we’ll see a turnaround in the U.S.,” he predicted, but added that it will take at least six months to get the money flowing.
Flassbeck was more skeptical, however, about an early recovery in Europe and Japan.
On Dec. 29, a report by the International Monetary Fund warned that the current crisis, which started with the housing and financial sectors, “has now led to a strong fall in aggregate demand.”
To stem the slide, the IMF has suggested a fiscal stimulus package is needed equal to 2 percent of global gross domestic product.
Michael Finger, senior WTO economist, said domestic demand will continue to fall in the U.S. and other advanced economies this year, and the recent contraction of prices in the U.S. will continue in the first and second quarters, but will start to pick up in the third quarter.
“Business and consumer confidence indicators are all down,” Finger said. “The sentiment has to stabilize before it improves.”
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)
Breaking News: @hedislimane joins @celine as its new artistic, creative and image director. One of fashion’s preeminent image-makers and trendsetters, Slimane is to join the LVMH brand on Feb. 1 and unveil his first fashion proposition for men and women next September during Paris Fashion Week. It marks a major homecoming for Slimane, who cemented his reputation – and influenced men’s tailoring for more than a decade – as the designer of Dior Homme between 2000 and 2007. He went on to reinvent and ignite the house of Yves Saint Laurent, which he rechristened Saint Laurent, between 2012 and 2016 – all the while maintaining a close relationship with the Arnault family, which controls LVMH and Dior. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
“Personally I believe the Eighties have been the richest and more vivacious period for international fashion,” Giorgio Armani said when asked what his favorite decade of fashion is. It was a moment of disruption and experimentation and only thinking back to the first years of that decade is always an emotion for me, for what they have meant to me and my work.” The influence is clear in @giorgioarmani spring 2018 collection, pictured here, which was full of bright colors and unexpected prints. Read more about which decades designers loved most on WWD.com #wwdfashion #wwddecades (📷: @aitorrosasphoto)
For Lady Gaga’s only Italian show on her “Joanne World Tour,” the singer wore a range of @versace_official outfits. The standout piece: this custom-made bodysuit inspired by the brand’s spring 2018 collection. #wwdfashion (RG: @ladygaga)
@_camillaruth_ is expanding on the wellness-craze concept with @westbourne – a new NYC restaurant that’s both a healthy-minded café as well as a business that gives back to the community. Marcus works with the Robin Hood foundation to give back to The Door, a non-profit providing youth development services, and also hires employees through The Door. Read our full interview with Marcus on giving back through food on WWD.com. #wwdeye (📷: @lexieblacklock)