Hit by Chinese imports, Argentina’s textile industry is reeling

[MilHojas]

Hit by Chinese imports, slumping demand, Argentina’s textile industry is reeling - Buenos Aires Herald

Consumers say local products are too pricey, while manufacturers claim that taxes, banking fees are sinking their ability to compete

buenosairesherald.com

 

[LuckyLuke]

Argentina would do well to think this through verrrryyyy carefully. Amazon absolutely wrecked malls and has nearly driven department stores and bookstores into extinction. Commercial property vacancies have never recovered. They are slowly swallowing all sorts of commerce channels now like domestic freight shipping, car sales, pharmaceuticals, even doctors.

BUT, while many criticize that Amazon is replacing quality jobs that once provided living wages for box packing plant jobs with dystopian labor metrics, at least you could argue that the logistics, jobs, technology, warehouses, etc. are still within the US.

For Argentina to throw the doors open to a Chinese version of Amazon without understanding the implications to it's own labor dynamic is not only short-sighted but dangerous. Chinese factories are heavily subsidized by their shadow banking system and their "dumping" methods of capturing foreign trade is a legitimate threat. Argentine companies should do well to try to be more competitive, but Chinese manufacturing costs are not transparent and not apples to apples with Argentina. The Argentine government would do well to study how China supports it's manufacturing sector and emulate that before trying to pretend that clothes produced here can be just as cheap as there.

 

[redlobster]

... Chinese factories are heavily subsidized by their shadow banking system and their "dumping" methods of capturing foreign trade is a legitimate threat.

Those commie bastards - trying to sell us stuff too cheap with their shadow banking system tricks! Outrageous. How dare they?

 

[Johngwyn]

Argentina would do well to think this through verrrryyyy carefully. Amazon absolutely wrecked malls and has nearly driven department stores and bookstores into extinction. Commercial property vacancies have never recovered. They are slowly swallowing all sorts of commerce channels now like domestic freight shipping, car sales, pharmaceuticals, even doctors.

BUT, while many criticize that Amazon is replacing quality jobs that once provided living wages for box packing plant jobs with dystopian labor metrics, at least you could argue that the logistics, jobs, technology, warehouses, etc. are still within the US.

For Argentina to throw the doors open to a Chinese version of Amazon without understanding the implications to it's own labor dynamic is not only short-sighted but dangerous. Chinese factories are heavily subsidized by their shadow banking system and their "dumping" methods of capturing foreign trade is a legitimate threat. Argentine companies should do well to try to be more competitive, but Chinese manufacturing costs are not transparent and not apples to apples with Argentina. The Argentine government would do well to study how China supports it's manufacturing sector and emulate that before trying to pretend that clothes produced here can be just as cheap as there.

I don't think 10 USD for a pair of low quality Argentine made underwear in Jumbo super market make any sense neither.

Quality and affordability is far more important for Argentine and expats than worry about China destroys the near none-exist fabric industry,
In fact they need to catch up, seriously. Argentina is not the U.S. and A.

 

[LuckyLuke]

Those commie bastards - trying to sell us stuff too cheap with their shadow banking system tricks! Outrageous. How dare they?

You don't understand...Amazon carried a loss for the first 7 years of it's public business. How did it fund these losses? Through investor capital. This public financing advantage is what allowed it to under price virtually all of it's competitors while it stole their market share.

Now take the same concept from a foreign country on a mass scale and you will get the same results.

Think about "NIKE" a US company making clothes in Vietnam. Yes it hurt textile employees in the US when they outsourced the production to cut labor costs, but NIKE still has headquarters in the US, pays taxes in the US, has storefronts all throughout the US, retail employees, sponsors US athletes, pays for US advertisements. NIKE corporate profits stay within the US.

What Argentina is doing is the equivalent of Vietnam's versions of NIKE selling directly to Argentina without any storefronts, employees, corporate taxes, or anything and putting all of Argentina's domestic "NIKE's" out of business. You understand the difference?

In order to give Argentina the competitive advantage that the US has with NIKE, they should instead open up MANUFACTURING of Argentine brands overseas to reduce labor costs, understanding that while the outsourcing will hurt Textile jobs, at least the corporate profits and retail infrastructure will stay within the country. By allowing direct imports to compete with Argentine brands that MUST produce domestically Argentina is effectively shooting itself in every foot it has.

Yes, I know Argentina already has products where 95% is produced overseas and the remaining 5% produced here so they mark up the whole product as if it were 100% domestic labor costs. This is the crux of Argentina's problem.

My point is Milei is throwing the baby out with the bath water.

 

[redlobster]

In order to give Argentina the competitive advantage that the US has with NIKE, they should instead open up MANUFACTURING of Argentine brands overseas to reduce labor costs, understanding that while the outsourcing will hurt Textile jobs, at least the corporate profits and retail infrastructure will stay within the country. By allowing direct imports to compete with Argentine brands that MUST produce domestically Argentina is effectively shooting itself in every foot it has.

Do you know of any prominent Argentine brands on the level of Nike that would actually benefit from outsourcing?
Argentina itself used to be an important manufacturing location before labor costs went up recently.

 

[Johngwyn]

Do you know of any prominent Argentine brands on the level of Nike that would actually benefit from outsourcing?
Argentina itself used to be an important manufacturing location before labor costs went up recently.

it doesn't exist, it's delusional to think about Argentina would do good in fabric industry.

Not every country is the same, or to follow the same path.

 

[Ries]

Argentina actually has the capacity to manufacture all kinds of high quality things, including organic and high end cottons and wools, in threads, yarns, fabrics, and clothing.
It has a great shoe industry which actually has made several "name brand" shoes under license, like Addidas. Argentine made Addidas are considered high quality and are highly collectible.
There are a lot of quality mid and high range clothes made here, but they cannot compete with Vietnam.

Labor costs are not the issue- its the tax structure of Argentina, which is designed to preserve inherited wealth, and the fact that there is no national industrial policy.

Turkey, for instance, has a government supported showroom complex in NYC, to rep Turkish textile manufacturers to the US market, and they support their manufacturing industries in many ways.
The Argentine government, on the other hand, actually makes it hard and expensive to export.
This is nuts.
I have known people who export, FROM Argentina, eyeglasses, cookwear, furniture, and clothing- and they have sold in Japan, North America, and Europe.
but the government enacted taxes, duties, shipping fees, and frictional costs all discourage exports.

 

[BobbyHank]

In my travel through Argentina meeting with several manufacturers, I’ve been told that the main reason that many factory owners go out of business here is because the damn Gov. taxes/steals ALL of the profit, and empowers the labor force to work very little and demand full pay, and makes it very difficult to fire a lazy employee. Inflation was the main way for them to get rid of lazy workers. Employers had to increase workers pay so that they could keep up with inflation, to get rid of a worker they simply would keep their pay stagnant. With inflation leveling, I imagine that that loophole is now closed. The Argentine factories I’ve visited show real ingenuity, that in many cases surpass those of US manufacturers. Without the many luxuries available in the US, Argentine factories find ingenious ways to adapt and overcome. If the Gov. can get out of the way, and let capitalism work, then I feel that Argentina would prosper.
I work for a US weaver, and the only reason that we’re still in business in the US is due to the Barry amendment, and Buy American Act. Both of which necessitate that Gov. purchases products made in the USA. I’m a libertarian so not fond of government protectionism, but if you take away the protections here and that great sucking sound would become deafening, as know-how, talent, and jobs run for the border for better jobs elsewhere.

 

[FrankPintor]

I work for a US weaver, and the only reason that we’re still in business in the US is due to the Barry amendment, and Buy American Act. Both of which necessitate that Gov. purchases products made in the USA. I’m a libertarian so not fond of government protectionism, but if you take away the protections here and that great sucking sound would become deafening, as know-how, talent, and jobs run for the border for better jobs elsewhere.

No atheists in a foxhole, right?