This paper will focus on how the inputs and linkages between each key phase of the American t-shirt would change if produced in a true free trade market.

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ROBERT GRAY                001-85-0139

This paper will focus on how the inputs and linkages between each key phase of the American t-shirt would change if produced in a true free trade market. The value chain can be categorized into the following key phases: raw materials (Cotton Farmers), work-in-progress or WIP (Apparel Manufacturers), and finished goods (T-Shirt Retailers). These inputs and linkages between the key phases are woven around constantly changing social, political, and cultural contexts severely stifling any resemblance of a free trade market.

        The key inputs for raw materials are the Virtuous Circle. The Virtuous Circle consists of the cotton farmers, private agricultural companies, university researchers, and the U.S. government. The farmers both contribute to and benefit from the research that takes place in the universities and firms, while the USDA supports them both with farming, technical, and business assistance. This circle has continuously fought to protect cotton farmers from the riskiest factors in producing cotton, such as the labor market. The private companies have developed technologies ranging from cotton field freezing chemical compounds to mechanical cotton strippers (work of 10 men in ½ a day) to the genetically modified (GM) cotton seed. Collectively, these innovations have reduced the need for seasonal labor and significantly increased the overall yield of cotton. The GM technology increased U.S. cotton farmers’ income approx. $1 billion.  In addition, further USDA research helped transform the cotton farmers’ waste products into revenue by recycling and/or reusing in items ranging from cattle feed to corn oil. After all this, the government subsidies kick-in.  Based on the above factors, I believe that a free trade market for American t-shirts would not change the activities instituted by the Virtuous Circle as the technological advances minus the government subsidies would still generate enough profits to appropriate amongst the shareholders. Also, these technologies have been made available in other countries that have not realized similar success due to a lack of comparable stakeholders (i.e., financial leverage needed for the capital investments).

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        The linkages from the raw material phase to the WIP phase primarily consists of the “Race to the Bottom”. The race to the bottom argued that the surplus of inexpensive labor in China threatened workers worldwide, as international competition applied downward pressure on wages and working conditions in other countries in order to be competitive. While the competitive market forces were strong, there were also opposing forces at work. These opposing forces of conscience, religion, and politics have been governments, labor unions, religious leaders, student activists, and the workers themselves.  Together these forces have actually been cooperators and improved the ...

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