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This paper examines the international competitiveness of the Canadian Textile and Clothing (TC) sector and its adjustment problems within a global economy. It focuses on the TC firms' capabilities to prepare for changes and implement strategies in an increasingly turbulent market environment. It highlights the importance of organizational response mechanisms and the development/utilization of industry‐specific technology and management know‐how. The paper argues for a future Canadian industrial policy that emphasizes the achievement of dynamic as well as static efficiency.

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