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Our clothing, like other commodities we buy regularly, comes to us from an ever-shifting array of countries. Since 2002, China and Bangladesh have surged ahead as our number one and two sources of imported clothing.

It wasn’t always this way. During the 1960s, most Canadians wore clothing manufactured in Canada and very little was imported. Although countries such as Taiwan, South Korea and Hong Kong were emerging as manufacturing powers, Canada and other Western countries negotiated a series of agreements that restricted clothing imports in the 1970s and 1980s.

A major shift came when Canada signed the Free Trade Agreement with the United States in 1989. As recently as 1998, that nation was our primary foreign clothing supplier: a surge in exports to the United States in those years revitalized our domestic industry.

Another shift began in 1995, when the World Trade Organization’s Agreement on Textiles and Clothing led to a gradual lifting of quotas on clothing imports. Taiwan, South Korea, Hong Kong, Malaysia, Thailand, Pakistan, Sri Lanka, the Philippines and Macau were the first big beneficiaries of trade liberalization. Bangladesh started shipping into Canada tariff-free in 2003. China followed in 2004.

Canadian clothing manufacturers have by no means vanished: they supplied 32% of the domestic market in 2005. However, the industry is shrinking. From 2002 to 2005, employment in the clothing industry dropped from 94,000 to 60,000.

Consumers have also seen the impact of foreign competition. After rising steadily through the 1980s and 1990s, clothing prices began to fall. In 2005, consumer prices for clothing were 6% lower than in 2001.