Globalisation, or more accurately global capitalism, poses a very difficult set of challenges to industry in small island states. The Fijian garment industry is essentially a creation of special access to the Australian, New Zealand and US markets under preferential trade arrangements. Now that these agreements have ended, or are coming to an end, the industry finds itself at a significant crossroads.

The challenge for the garment industry is in the erosion of preferences and a shift from a focus on production quantity to niche marketing and quality (MoF and National Planning 2002: 12). The way forward is to produce for niche markets, such as corporate suits and women’s wear, and not in the volumes market occupied by China (MoF and National Planning 2002: 15). Perhaps the greater challenge is to establish trading agreements which allow this. As Nadvi (2003) has noted, ‘Trade preferences such as the MFA quotas can be an important driver in promoting industrial development, but do not necessarily encourage moving up the value chain into functions with a higher value.’

Nadvi has further noted that the key to post-MFA survival will be in upgrading technology, enhancing linkages with the textile sector, reducing delivery times and improving product quality. One strategy for garment exporting countries which are being squeezed by the loss of preferential agreements and by low-cost competition, is to upgrade to higher value-added activities within the value chain. The downside of this is that a number of the least-skilled workers will lose their jobs, replaced by higher-skilled workers and more efficient technology. To date, the industry in Fiji has not developed along these lines. It has evolved essentially as a service industry to satisfy buyer and consumer preferences in countries seeking competitively priced garments. Key inputs, designs and even ownership were and are still external to Fiji’s garment industry development. Change will not be easy and will depend on more than merely extending the relationships that have created a number of problems.

This challenge is taking place alongside rapidly shifting regional and global trading contexts. The Australasian markets continue to ‘liberalise’ and prefer to seek bilateral free trade arrangements with North American and Asian countries, not small island Pacific states. The emergence of Chinese production is also critical. It is simply not conceivable for Fiji to be competitive with what China, or any other low-cost Asian country, exports. Progressive government initiatives are critical to the survival of the garment sector. To date, government policies have effectively exacerbated the low-quality/low-wage cul-de-sac the industry finds itself in. A cheap-labour policy has not helped in the development of a quality-oriented, high-skilled, value-adding industry.

Though some within the Fijian industry have repositioned themselves, there remains doubt as to whether they can ever become truly competitive without preferences in the global economy. Likewise, other industry representatives see ‘no way out except for government assistance’, including efforts to secure greater trade access to the US market (Daily Post, June 18, 2001). Robert Read has argued that it is ‘not surprising that many countries have sought or are seeking strategic refuge in regional trading agreements … with neighboring states’ (Read 2004: 365) in response to globalisation. There are a number of innovations emerging, some more likely to be successful than others. In January 2002 the Fijian Government appointed US-based Sandler, Travis and Rosenberg (www.strtrade.com), a trade advisory service, to lobby on its behalf to negotiate preferential access for Fiji’s garments into the US market. The firm had been contracted to pursue an African Growth and Opportunity Act (AGOA)-type agreement, which includes duty-free access to the USA for African garments. The Fijian Government and the Fiji TCF Council hoped that such a deal would help exports to the USA reach $US400 million ($A539 million) (Fiji Government Online, February 1, 2002). However, the recourse to regionalism and regional agreements is, for large and small states, ‘a political act advanced by social and political action, or corrective, towards a political goal’ (Knutsen 2003: 227–8). AGOA, for example, which opens the doors for duty-free and quota-free access to the USA for garment manufacturers in Africa, stipulates conditions in the form of market-based economies, a development of political pluralism and the rule of law, the elimination of barriers to US trade and investment, the protection of intellectual property rights, combating corruption, poverty reduction, and policies against child labour and for health care and education, human rights and workers’ rights. Clearly, AGOA is an example of political leverage through ‘free’ trade agreements.

This leverage can, however, work both ways. Throughout 2005, Prime Minister Qarase linked the future wellbeing of the garment industry to Fiji’s commitment to good governance and to globalisation. Calling for Australia to be a ‘good mate’ and ‘open the door’ to more relaxed import rules, Qarase has publicly commented that the country will face increased danger of instability, social breakdown and higher crime rates if the industry were allowed to fail. Qarase further contended that globalisation was ‘fatally flawed’ if markets were closed off and Fiji might reassess its commitment to trade agreements if the end result was devastation of its economy (Pacific Magazine, May 14, 2005).

The garment industry in Fiji remains important. Any complete collapse would create a human and economic crisis. Though low even by local standards, garment wages are critical in supporting the urban poor. The garment industry still employs the majority of manufacturing labour, and a disproportionate number of workers are women of all racial groups. Government officials have inadequate policy responses on the question of alternative employment, seeing opportunities in the depressed rural sector. A further or full collapse of the industry would substantially increase poverty and would likely represent a threat to social and political stability. Substantial effort is needed to refocus the industry for a number of reasons.

The UN (UNDP 2003: 1) has argued that ‘the expansion of trade guarantees neither immediate economic growth nor long term economic or human development’. Trade is a means to an end, not an end in itself. What are critical in transforming trade into development are the internal and external institutional and social conditions that allow companies and workers to reap the rewards of trade and give countries and industries a sense of security. It is essential that efforts be made in multiple areas which seek to develop progressive industry initiatives as well as more directly enhancing the lives of female factory workers. The potential of Fiji’s garment industry in shifting into higher value chains and as a tool for poverty alleviation is dependent on the evolution of the industry as well as the enhancement of labour rights and rewards.

In conclusion, the future for Fijian garment manufacturers will most likely come from the following two directions: first, the ability of certain businesses to scale up into value-added products which allow greater control over quality and prices above that of the cost of labour; and secondly, trade agreements which allow and encourage the shift away from dependent low-waged industries in the Pacific. The challenge is for Pacific Island countries to develop high-quality niche products and for the region’s more developed countries to develop trading policies which facilitate this shift. In contrast, an argument based solely on global comparative advantage is facile and offers little hope for any form of economic or human development through trade among Pacific Island countries. Somewhat inevitably, these experiences might lead to a growing reluctance to commit to further ‘free’ trade arrangements in the future.