The development of strong export market is essential. TCF and Allied industries seeking to export products and/or services will work through a number of phases as indicated in this chart.

An initial commitment to exporting is an important first step and can lead to substantial financial outlays.

There are risks involving exporting:

· Distance- if there’s an issue, it’s a long way to go to rectify it.

· Currency fluctuations can severely affect the price obtained for goods if the exporter is not paid in Australian dollars.

· Shipping and transport-loss or damage considerations

· Industrial action- can hold up delivery and affect supplier-customer relations

These are issues that are often out of the hands of the potential exporter but which can severely impact on the business unless the exporter is aware of the risks and plans for all contingencies.

Consideration of the geographical, political and cultural circumstances of potential export markets must be considered and their feasibility determined from the outset

A review of potential business contacts/buyers will need to be undertaken. Embassies and Consultants carry business directories of organisations in the country they represent. Such directories contain contact details and are a bit like our Yellow Pages. Government Agencies like Austrade can assist in many ways including searching the market for details of likely competitors, pricing and distribution as well as identifying potential importers and distributors.

Forward planning is essential and can save a lot of time and money.

There’s nothing like visiting the market first hand to follow up and make contact with parties identified in the previous phase. It’s an opportunity to promote the product or service intended for export. Meeting with potential customers will establish whether a supplier/customers business relationship is feasible and allows the conditions of trading to be established.

After a visit to the market place it will be necessary to follow through on all meeting and issues discussed. Further visits will probably be necessary to finally “clinch” the deal and establish by way of contract or agreement conditions of supply and purchase.

When the first order has been received the exporter will probably establish a Letter of Credit facility. Theis ensures the exporter receives payment for their product or service. It is far more difficult to chase up outstanding payments when you live on the other side of the world to your customer.

Having won the contract and supplied the first order, timely delivery, quality of product and service will be paramount in order to maintain the export contract and establish a reputation as a quality supplier.

The Australian Trade Commission (Austrade) is the agency that helps Australian companies win overseas business for their products and services by reducing the time, cost and risk involved in selecting, entering and developing international markets.

Their mission is to contribute to community wealth by helping more Australians succeed in export and international business.

Austrade is represented in 100 countries including an extensive domestic network throughout Australia. Austrade offers practical advice, market intelligence and ongoing support (including to Australian businesses looking to develop international markets. Austrade also provides advice and guidance on overseas investment and joint venture opportunities, and helps put Australian businesses in contact with potential overseas investors.

Austrade is a statutory authority within the Foreign Affairs and Trade portfolio. A board, whose members are drawn from business and government, governs Austrade. It reports to the Minister for Trade.

Free trade agreements (FTAs) benefit Australian business by improving access to foreign markets and liberalising trade. They enable Australian exporters to be more competitive in the marketplace by reducing tariffs on goods and providing better conditions and accessibility for services and two-way investment.

Australia has four free trade agreements:

• The Australia-United States Free Trade Agreement (AUSFTA) (since January 2005)
• The Thailand-Australia Free Trade Agreement (TAFTA) (since January 2005)
• The Singapore-Australia Free Trade Agreement (SAFTA) (since July 2003)
• The Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) (since 1983)

a) Restructuring changes the way in which things are done so as to improve the efficiency and international competitiveness. Some ways in which this can be done are by:

· Consulting jointly with companies and employees to change awards

· Providing standardised national skills training for textiles

· Promoting operation flexibility-machines working 24hrs a day (for high volume automated production)

The need to respond to a changing global market meant that in 2005 a more open and competitive TCFL marketplace locally and internationally- from January 1 2005 the Australian TCFL industries will be facing a new global trading environment-one that will be substantially more competitive. Key actions that will contribute to this more competitive environment include:

· Previously agreed and announced further reductions in Australia’s TCF tariff levels.

· Full implementations of the WTO agreement on textiles and clothing requiring all WTO countries to have abolished all TCFL restrictive quotas.

EOAP stands for Expanded Overseas Assembly Provision, they provide duty concessions to firms who assemble garments and footwear overseas from mostly Australian fabric and/or leather and then import them back into Australia for local consumption. The Australian Customs Services (ACS) on behalf of the Department of Industry, Tourism and Resources (ITR) manages EOAP. It supports the ATCFI by allowing garment manufacturers to take advantage of the low labour costs of overseas assembly houses, the EOAP is also designed to encourage the use of Australian manufactured fabrics, design studios and cutting houses. At the end of the day the EOAP evens out the costs between fully imported garments and garments assembled overseas from Australian Materials.

There are four main issues which are currently affecting the Australian Textiles Industry, these include:

· Globalisation of design, manufacture, distribution and marketing

· Restructuring of the industry: imports/exports, level of protection, increased level of skill of workers

· Changing consumer demands and lifestyle: sun protection factor clothing, clothing made from organic sources (e.g. clothing made from organic cotton)

· Manufacturing strategies: niche and mass-produced goods.

1.) Since the early 1970s there has been a shift in economic competition throughout ATCFAI. Local industries that one competed only with each other are now competing with the whole world. International competition has now become more intense and more widespread and a worldwide market for goods and services and a parallel financial system has developed.

Since 1995, the WTO (World Trade Organisation) Agreement of Textiles and Clothing (ATC) have governed world trade textiles and clothing. As a result all global restrictive quotas on TCFL tariff and non-tariff barriers will be eliminated by January 1, 2005. These eliminations of global quotas will provide low labour cost countries such as China, India and Pakistan to have enhanced access to markets in developed economies. As a consequence competitive pressure will increase in most markets, many of which already have productive over-capacity and are experiencing a flood of imported products.[1] TCFL imports into Australia increased from $3.5 billion in 1990/91 to $7.4 billion in 2000/01 (it is estimated that this amount has now increased further to about $10 billion.

This means that globalisation and on-going trade liberalisation are progressively creating a globally supplied TCFL market in Australia, meaning that the level of competition within the Australian marketplace has intensified, it also means that there have been changes in government policy and advances in technology.

In controlling trade, government policies have promoted two main strategies: free trade, and the protectionist approach.

With free trade all countries benefit by the removal of barriers to trade. This creates more competition with other countries which inturn increases efficiency and growth. The benefits of free trade include lower prices to consumers and improved production efficiency.

With protectionist policies, they use methods to make imports a less attractive alternative to locally produced items. Imposing tariffs and quotas are two ways of providing protection for the local industries. In Australia, such protectionist policy did in fact, do more harm to the local industry that it did good. There became no real need for research and development into improvement in manufacturing skills or equipment as businesses were booming without it.

The factors responsible for the directing of products and services to an international market include:

· Advances in technology

· Advances in air transport

· Government policies encouraging exports and international trade.

Computer developments have resulted in great improvements in information technology. As a result of the Internet getting access to information from around the world is rapid. The exchange of information used to take days, even weeks by road, rail, boat and air transport, can now be sent in minutes via the World Wide Web. This has driven the globalisation of the textiles industry. The Internet and e-commerce is a powerful promotional tool, providing information, technical support, virtual shopping and browsing. Product lines can be inspected, samples obtained and financial transactions can be facilitated in a matter of minutes.

Air freighting of goods in and out of Australia has been the favoured method of transport for many years. As fashions in apparel and accessories changes so quickly, fabrics and apparel must be transported quickly to its destination.

The federal government is committed to promoting the international competitiveness, and its clear the in order to be successful the TCF and allied industries must look beyond the domestic market and seek out opportunities in the global marketplace. The development of export markets however requires considerable research and planning as well as time and finance. Programs have been set up by the Federal Government to encourage and assist Australian companies to export produces and/or services. A major export marketing support agency for Australian companies is Austrade.

2.) Restructuring changes the way in which things are done so as to improve the efficiency and international competitiveness. Some ways in which this can be done are by:

· Consulting jointly with companies and employees to change awards

· Providing standardised national skills training for textiles

· Promoting operation flexibility-machines working 24hrs a day (for high volume automated production)

The need to respond to a changing global market meant that in 2005 a more open and competitive TCFL marketplace locally and internationally- from January 1 2005 the Australian TCFL industries will be facing a new global trading environment-one that will be substantially more competitive. Key actions that will contribute to this more competitive environment include:

· Previously agreed and announced further reductions in Australia’s TCF tariff levels.

· Full implementations of the WTO agreement on textiles and clothing requiring all WTO countries to have abolished all TCFL restrictive quotas.

During the 1970s Australia was criticised about its protectionist policies particularly in the textiles industry. Many companies argued that to continue trading with Australia, their tariffs should be lowered. In 1973 tariffs imposed upon imported TCF was lowered by 25%, resulting in an enormous amount of cheaper textiles goods being imported into the country. At this period equal pay for women, the rise in the basic wage and the Australian dollar revaluating also led to the economic decline of the textile industry. Australian manufacturers found they weren’t able to compete with manufacturers of imported goods, leading to a gradual lift of tariffs and quotas on imported textile goods between 1986 and 1993, resulting in a flood of cheaper imports. However the government has encourages and assisted in the restructuring of the industry to make it more competitive.

The ATCFAI has provided employment for unskilled, skilled and highly skilled workers. Due to developments in technology skilled labour will be required to operate new machines and most unskilled labour positions contract. OH&S conditions have been addressed and implemented and multi-skilling of the workforce introduced, to encourage more workers into factories and workplace environments. Multi-skilling, introduced in the 1980s, allowing for each worker to be trained to high levels in order to fain further skills and advances their level within the company. National training institutions have also introduced course to train ATCFAI workers various levels.

3.) Consumers are constantly making decisions when they purchase textile items. Consumers weigh up their disposable income against their own priorities and values. This presents a challenge to manufacturers and retailers, to accurately predict consumer attitudes and behaviours and to adapt their business to meet these demands. There are a number of key demands and lifestyle trends which impact on the textile industry, these include: sun protection, environmental concerns, youthful ageing, informal living and working, time for me, expert consumers and lifestyle and technology.

· Sun protection- Australia is the skin cancer capital of the world; this has resulted in the demand for textiles, which have a sun protection factor (SPF). Clothing and shade cloths are engineered to have a SPF to protect the user/wearer from the harmful effects of the sun and extend their time outdoors. Fabric and garment manufacturers are now required to label product with an Ultraviolet Protection Factor (UPF) if they’re claiming that this is a feature of the garment or fabric.

· Environmental concerns- environmental designs are of an emerging importance in the industry, and have led to the designs, which minimise the ecological impact often involved in the production of textiles. Eco-textiles however, have a higher cost, so until this changes eco-textiles will have a limited consumer demand, and until there is a higher demand for eco-textiles, the price is unlikely to drop. Organic cotton and hemp are example of this.

· Youthful ageing- ageing populations are everywhere as people live longer, healthier lives. as a result there’s a new generation of affluent senior citizens. As their lifestyle is more leisurely their requirements are providing a niche market.

· Informal living and working- there is a growing resistance to formality and tradition in life where it requires a sacrifice in comfort and convenience. There will be no need to wear a suit for identity or status if people are working at home, and there will be a demand for more flexible wardrobes with versatile, multi-occasion apparel to meet changing work and leisure environments.

· Time for me- as the pace of modern life increases, many consumers are craving personal space and time off to indulge in leisure activities. When both partners in a household work there will be less time for chores, meaning that these lifestyle characteristics will result in a demand for convenient, low-maintenance textiles.

· Expert consumers- the growing demand for larger sizes has led to designers and manufacturers focusing on the production for larger size garment ranges and the emergence of new large size labels. Modern consumers are also becoming experts in purchasing, because they are more informed, better educated, value conscious and want to rationalise their purchase or seek out a bargain.

· Lifestyle and technology- improved technology is resulting in cheaper air travel, bringing consumers more in touch with worldwide trends. This also leads to the need for lighter, more versatile, comfortable and easier to care for clothing to pack.

4.) Textile items are manufactured according to whether they are for a niche or mass market- the low volume vs. high volume approach. Local industry strength lies in its ability to improve product quality and develop niche markets, popular brand names and quick response in market demand. Imports involve longer lead times, market risks, logistical uncertainties and tied-up capital. The interests of local manufacturers are not well served competing on a ‘price only’ basis with more imports from lower labour cost countries in Asia. Firms pursuing strategies should be focusing on value adding, or individuality of garments.

Niche markets are the smaller markets for more specialised textile items. Only a relatively few number of people are interested in or can afford these goods. They have a limited consumer appeal, for example, clothing worn by pregnant women or costumes worn by worn by gymnasts. Niche market consumers have specific needs or lifestyles. Liberalisation of international trade in textile products and the increasing involvement of developing countries in mass produced, low-end market sectors, is the key driving force in the movement to niche market manufacturing by Australian textile firms.

Mass-produced goods are manufactured and marketed to appeal to the vast majority of consumers, for example, plain white bed linen. This means that the manufacturer doesn’t have to cater to specific needs of each consumer. This manufacturing approach involves mass production, mass distribution and mass promotion of one product to many buyers. These goods tend to be of a cheaper price compared to niche market goods, and of a standard quality.