The German Textile Puzzle: Selective Protectionism and the Silent Globalization of an Industry

Abstract

As in other countries, textile and apparel production in Germany is considered a victim of globalization. Domestic production and employment declined dramatically after its postwar peak in the late 1950s. Research has often attributed this trajectory to the trade liberalization policy of the German governments. However, this interpretation is puzzling. German trade policy was not as liberal as is claimed, nor did the industry disappear. This article addresses the issue using statistical evidence as well as archival material. The West German textile and apparel industry was using outward processing strategies comparatively early and was supported in that by German politicians starting in the early 1960s. As a result, the industry moved up the global value chain of textile production.