Garments on the Move: the local dynamics of export networks in La Laguna, Mexico

The globalisation of the world economy has given rise to rapid and far-reaching changes in the organisation and geography of industrial production. New production locations, often LMIC clusters, are constantly becoming incorporated into globalised value chains. Operating on demanding export markets through GVCs orchestrated by powerful buyers, presents clusters of producers in developing countries with new challenges and opportunities. Whilst both the globalisation and the clustering of industrial production are well-known phenomena, the need for a more detailed insight into the interaction between the two has only recently become apparent. It is this interaction that is the topic of this study. A focus on networks is the most suitable for the analysis (at multiple levels of scale) of the highly volatile and dynamic garment industry. Two network-based approaches are applied in this study: the global value chain and the cluster approaches. The former focuses on the division of labour patterns at the global level and on the governance mechanisms used to control and coordinate these patterns and their underlying processes. The cluster approach focuses on cooperation and competition dynamics that support the competitive position of clustered firms in a certain geographical place. Both approaches share a focus on industrial organisation but also incorporate geographical aspects. This study concerns the garment cluster in La Laguna, northern Mexico, which has recently boomed thanks to its growing exports to the US. Whichever criterion is used to measure industrial success growth in local production capacity, growth in exports, the creation of new firms or employment growth all the evidence indicates that La Laguna is an exceptional case of rapid, export-based growth. Its success is based on the preferential access of Mexican imports to the US under NAFTA since 1994. In fact, based on its development, La Laguna has been hailed as a NAFTA success story (Gereffi & Martínez, 2000). This study focuses on this exceptional export cluster in order to examine the interaction and network linkages between producers in the cluster and global forces in the industry. The evidence presented in the study does not necessarily warrant great optimism. Undeniably, less than a decade has passed since the garment export boom took a hold of the Laguna cluster and significant headway has been made in this short period. Yet, perhaps because of the quantitative challenges posed by the US demand boom, the more qualitative and strategic of these changes have been made hesitantly and, in some cases, under direct pressure exerted by outside buyers. This is cause for concern in an industry that places growing emphasis on commitment, cooperation, flexibility, speed and service on the one hand, and is marked by apparent locational volatility on the other, low-end hand. Generally, LMICs that participate in regional sourcing patterns are thought to compensate for their often higher prices by offering the mentioned other, quick-response-related advantages. La Laguna does not do this, yet. With the upcoming integration of garments and textiles in general WTO rules in 2005 and the expected global reshuffling of garment production locations, the local garment industry offers little or no competitive advantages allowing it to look forward with great confidence. This appears to be validated by the clusters crisis in 2001 and 2002