Balancing competitiveness and equity in the garment industry

June 21, 2016

A new study comparing the garment-export industries in Honduras and Nicaragua challenges the conventional wisdom that competing on the basis of cheap labour is the only option for poor garment-producing countries.

Increasing competition among apparel companies and among garment-producing countries has led many to conclude that a race to the bottom on price has eclipsed concerns about corporate social responsibility. In this difficult context, the researchers examined ways in which national competitiveness strategies could strike a balance between the rights and needs of garment workers and the needs and demands of foreign investors and buyers.

They examined industry and government policies aimed at keeping garment exports competitive, the factors that international manufacturers consider when making investment decisions, and workers' perspectives on countries' competitiveness strategies. The researchers paid particular attention to the challenges facing women, who make up the bulk of the garment industry workforce.

The research, funded by IDRC, was conducted by the Canadian NGO Maquila Solidarity Network, the Honduran Independent Monitoring Team, and the Nicaragua-based Professionals for Corporate Social Auditing. The research findings are contained in a summary document and a 98-page report, "Can national competitiveness strategies include decent work?" Both documents contain a set of 12 recommendations for international retailers and manufacturers considering sourcing or investing in Latin America.

Read the report summary in English or Spanish. For the full report, produced in partnership with Horizons of Friendship Canada, see the Maquila Solidarity Network website.