3.2.3. Origin of the Value Added of the United States Textile and Apparel Exports

U.S. textile and apparel exports show a somewhat irregular variation from 1995 to 2018, decreasing almost three percentage points (from 89.7% to 86.5%). The participation of foreign companies, the introduction of new technologies, the continuous training of employees, and the growing competitiveness and innovation are causes that did not foresee an ideal integration of the textile-garment production (or supply) chain. This lets the full package strategy be carried out through selective alliances with leading Mexican companies.

Therefore, the small- and medium-sized companies that make up most of the Mexico sector have been affected. As a result, Mexico's participation in international trade has decreased (Arroyo and Cárcamo 2010). For example, Figure 4 shows a half percentage point share of Mexico in 1995 in the value added embodied in U.S. textile and apparel exports, which barely increased to 0.76% in 2018.

As for China's share, it shows an increase of more than three percentage points from 1995 to 2018 (0.79% to 3.90%), generating a considerable increase in the level of Chinese world exports through its share of the World export market in less than four decades (Gómez Chiñas and García 2017).

Moreover, China's upward trend contrasts both with the fall of domestic (U.S.) value added in the period of 1995–2018, as well as Mexico. This trend has caused the relative importance of China as the source of value-added embodied in U.S. textile exports to increase almost fivefold in 1995.

#### 3.2.4. Origin of the Value Added of China's Textile and Apparel Exports

The origin of the added value of China's textile exports is due to the efficiency of the full package strategy in Asia, as it creates competitive advantages that highlight the manufacturing of textile products. This generates around 50% of the final product costs which makes Mexico's participation less than one percentage point and almost constant from 1995 to 2018, as seen in Figure 5 (Castro-Gonzáles and Mathews 2013).

**Figure 5.** Origin of value added in China's textile and apparel gross exports (%). 1995–2018. Source: Authors based on TiVA (OECD 2021).

This behavior contrasts with the level and evolution of the domestic (Chinese) valueadded share of Chinese textile exports, as it has a steady growth from 1995 to 1999 (79.3–83.6%) and increased just over four percentage points from 2000 to 2018 (82.9–87.0%).

Therefore, the United States has a descending trend in the origin of the added value of Chinese exports from 1995 to 2018. This predominance of China is not only due to the strategy of the complete package but also to the use of the strategy of devaluation of the currency against the dollar that has a positive effect on its textile exports whose purpose is to primarily affect the participation of the United States (Castro-Gonzáles and Mathews 2013).

However, there may be an increase in production costs in China, which would cause garment producers to have opportunities abroad to relocate their plants (Inomata and Taglioni 2019). Nevertheless, China has built a strong domestic market with a complete and independent manufacturing system, and through "Made in China" has been active in the global market internationalizing and inserting themselves into global supply chains (Cohen and Lee 2020; Ma et al. 2018).
