Repositioning in the global apparel value chain in the post-MFA era: Strategic issues and evidence from Sri Lanka

Abstract

This article examines structural adjustment in the world apparel trade following the abolition of Multi-Fibre Arrangement (MFA) quotas through a case study of the apparel industry in Sri Lanka. The evidence suggests that, in a quota-free global market, individual exporting countries have room for carving out a niche in specific products. The Sri Lankan apparel industry has managed to maintain growth dynamism through specialization in intimate apparel and upmarket casualwear. The expansion of the industry and its adjustment to MFA abolition was aided by an easily trainable domestic workforce and collaborative actions of industry associations and the government, with foreign buyers playing a pivotal role in linking the Sri Lankan firms to the global value chain. Show more