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Lessons Learned from the Phase-out of the MFA: Moving from Managed Distortion to Managed Distortion

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Author Info

  • Hudson, Darren
  • Ethridge, Don E.
  • Mutuc, Maria Erlinda M.

Abstract

While the elimination of the Multifibre Arrangement (MFA) was presumed to be a net global benefit because it represented an elimination of a distortionary set of trade agreements, it was based on the assumption that the underlying global trading regime was based on free trade principles. However, due to the trading pattern that has emerged after the MFA and its unintended consequences – with production infrastructure and trading rules based on distortionary incentives so entrenched into the system – the global trading regime after the elimination of quotas is still far short of free.

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File URL: http://purl.umn.edu/104063
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Bibliographic Info

Article provided by Food and Agriculture Organization, Agricultural and Development Economics Division in its journal eJADE: electronic Journal of Agricultural and Development Economics.

Volume (Year): 12 (2011)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:ags:ejadef:104063

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Keywords: MFA; textile and clothing; trade; Demand and Price Analysis; Industrial Organization; Institutional and Behavioral Economics; International Relations/Trade; Production Economics;

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  1. Juliette Milgram Baleix, 2005. "Quotas on Clothing Imports: Impact and Determinants of EU Trade Policy," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 445-460, 08.
  2. Kenneth A. Reinert, 2000. "Give Us Virtue, But Not Yet: Safegaurd Actions Under the Agreement on Textiles and Clothing," The World Economy, Wiley Blackwell, vol. 23(1), pages 25-55, 01.
  3. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
  4. Diao, Xinshen & Somwaru, Agapi, 2001. "Impact of the MFA phase-out on the world economy," TMD discussion papers 79, International Food Policy Research Institute (IFPRI).
  5. J. Michael Finger & Ann Harrison, 1996. "The MFA Paradox: More Protection and More Trade?," NBER Chapters, in: The Political Economy of American Trade Policy, pages 197-260 National Bureau of Economic Research, Inc.
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