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Internal Quota-Allocation Schemes and the Costs of the MFA

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  • Trela, Irene
  • Whalley, John

Abstract

This paper suggests that schemes used within developing countries to allocate textile export quota among domestic producers typically have more severe negative effects on developing-country economic performance than the MFA export quotas themselves. We summarize allocation schemes in 16 countries highlighting common "lock-in" and "rent-dissipation" effects of such schemes. We then use a global general-equilibrium model to evaluate the effects of MFA removal with and without these additional effects. Results indicate that estimates of gains to developing countries from an MFA removal increase sharply when internal quota-allocation schemes are taken into account. Copyright 1995 by Blackwell Publishing Ltd.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 3 (1995)
Issue (Month): 3 (October)
Pages: 284-306

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Handle: RePEc:bla:reviec:v:3:y:1995:i:3:p:284-306

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References

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  1. Hamilton, Carl, 1986. "An Assessment of Voluntary Restraints on Hong Kong Exports to Europe and the USA," Economica, London School of Economics and Political Science, vol. 53(211), pages 339-50, August.
  2. Cable, Vincent, 1987. "Textiles and Clothing in a New Round of Trade Negotiations," World Bank Economic Review, World Bank Group, vol. 1(4), pages 619-46, September.
  3. Trela, I. & Whalley, J., 1989. "Unravelling The Threads Of The Mfa," Papers 448, Stockholm - International Economic Studies.
  4. Dawkins, Christina & Srinivasan, T.N. & Whalley, John, 2001. "Calibration," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 58, pages 3653-3703 Elsevier.
  5. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521319867, April.
  6. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
  7. John Whalley, 1984. "Trade Liberalization among Major World Trading Areas," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262231204, December.
  8. Carl B. Hamilton, 1988. "Restrictiveness and International Transmission of the "New" Protectionism," NBER Chapters, in: Issues in US-EC Trade Relations, pages 201-230 National Bureau of Economic Research, Inc.
  9. Falvey, Rodney E, 1979. "The Composition of Trade within Import-restricted Product Categories," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1105-14, October.
  10. Glenn Jenkins, 1985. "Costs And Consequences Of The New Protectionism: The Case Of Canada’S Clothing Sector," Development Discussion Papers 1985-04, JDI Executive Programs.
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Cited by:
  1. De Santis, Roberto A., 1997. "Why exporting countries agree voluntary export restraints: The oligopolistic power of the foreign supplier," Kiel Working Papers 841, Kiel Institute for the World Economy.
  2. Anderson, Kym & Dimaranan, Betina & Hertel, Thomas W & Martin, Will, 1996. "Asia-Pacific Food Markets and Trade in 2005: A Global, Economy-wide Perspective," CEPR Discussion Papers 1474, C.E.P.R. Discussion Papers.
  3. Barbara J. Spencer, 1996. "Quota Licenses for Imported Capital Equipment: Could Bureaucrats Ever DoBetter than the Market?," NBER Working Papers 5695, National Bureau of Economic Research, Inc.
  4. Robert C. Feenstra, 1992. "How Costly Is Protectionism?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 159-178, Summer.
  5. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
  6. Shumei Gao & Jihe Song, 2004. "Quota Use under VERs: A theoretical framework and some evidence on MFA quota use," Working Papers E03, Department of Economics, School of Management and Languages, Heriot Watt University.
  7. Skully, David W., 1999. "The Economics Of Trq Administration," Working Papers 14584, International Agricultural Trade Research Consortium.

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