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The Cost of EU Trade Protection in Textiles and Clothing

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Author Info

  • Joseph F. Francois
  • Hans H. Glismann
  • Dean Spinanger

Abstract

This paper estimates the costs of EU restraints on trade in textiles and clothing. After explaining the methods used, we examine the impact of an opening up of EU trade in textiles and clothing, inter alia to those economies where the textile and clothing (T&C) industries command sizeable shares of exports and output. The estimates are based, firstly, on a partial equilibrium analysis allowing us to directly cover the effects of liberalization on the importation, production and consumption of T&C products; secondly, a general equilibrium analysis incorporates the wide-sweeping indirect costs of ATC within the EU. It turns out that in 1997 EU consumers paid roughly ECU 25 billion more for T&C products, due to quotas, tariffs and indirect effects.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 997.

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Length: 123 pages
Date of creation: Aug 2000
Date of revision:
Handle: RePEc:kie:kieliw:997

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Related research

Keywords: Agreement on Textiles and Clothing – ATC; Multi-fiber Arrangement; Costs of Protection; EU trade policy;

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References

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  1. Baldwin, Richard, 1990. "Measurable Dynamic Gains from Trade," Working Paper Series 270, Research Institute of Industrial Economics.
  2. De Melo, Jaime & Winters, L. Alan, 1989. "Price and quality effects of VERs - revisited : a case study of Korean footwear exports," Policy Research Working Paper Series 216, The World Bank.
  3. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  4. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
  5. Sawyer, W. Charles & Sprinkle, Richard L., 1997. "The Demand for Imports and Exports in Japan: A Survey," Journal of the Japanese and International Economies, Elsevier, vol. 11(2), pages 247-259, June.
  6. Houthakker, Hendrik S & Magee, Stephen P, 1969. "Income and Price Elasticities in World Trade," The Review of Economics and Statistics, MIT Press, vol. 51(2), pages 111-25, May.
  7. Martin,Will & Winters,L. Alan (ed.), 1996. "The Uruguay Round and the Developing Countries," Cambridge Books, Cambridge University Press, number 9780521586016, October.
  8. Harry G. Johnson, 1960. "The Cost of Protection and the Scientific Tariff," Journal of Political Economy, University of Chicago Press, vol. 68, pages 327.
  9. Francois, Joseph & McDonald, Brad & Nordström, Håkan, 1996. "A User's Guide to Uruguay Round Assessments," CEPR Discussion Papers 1410, C.E.P.R. Discussion Papers.
  10. Francois, Joseph F, 1994. "Global Production and Trade: Factor Migration and Commercial Policy with International Scale Economies," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(3), pages 565-81, August.
  11. Francois, Joseph, 1998. "Scale Economies and Imperfect Competition in the GTAP Model," GTAP Technical Papers 317, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  12. Nam Jeon, Bang & von Furstenberg, George M., 1986. "Techniques for measuring the welfare effects of protection: Appraising the choices," Journal of Policy Modeling, Elsevier, vol. 8(2), pages 273-303.
  13. Spinanger, Dean, 1997. "The WTO after the Singapore ministerial: Much to do about what?," Kiel Discussion Papers 304, Kiel Institute for the World Economy (IfW).
  14. Baldwin, Richard & Francois, Joseph, 1997. "Preferential Trade Liberalization in the North Atlantic," CEPR Discussion Papers 1611, C.E.P.R. Discussion Papers.
  15. Richard E. Baldwin & Rikard Forslid & Jan Haaland, 1995. "Investment Creation and Investment Diversion: Simulation Analysis of theSingle Market Programme," NBER Working Papers 5364, National Bureau of Economic Research, Inc.
  16. Smith, M. A. M., 1976. "Trade, growth and consumption in alternative models of capital accumulation," Journal of International Economics, Elsevier, vol. 6(4), pages 371-384, November.
  17. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
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Citations

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Cited by:
  1. Joseph F. Francois & Julia Wörz, 2006. "Rags in the High Rent District: The Evolution of Quota Rents in Textiles and Clothing," wiiw Working Papers 37, The Vienna Institute for International Economic Studies, wiiw.
  2. Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney, 2003. "Estimating the Tariff-Equivalent of NTMs," Working Papers 15858, United States International Trade Commission, Office of Economics.
  3. Andriamananjara, Soamiely & Dean, Judith M. & Feinberg, Robert & Ferrantino, Michael J. & Ludema, Rodney & Tsigas, Marinos E., 2004. "The Effects of Non-Tariff Measures on Prices, Trade, and Welfare: CGE Implementation of Policy-Based Price Comparisons," Working Papers 15863, United States International Trade Commission, Office of Economics.
  4. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
  5. Joseph Francois, 2010. "Comment on "China's Experience under the Multifiber Arrangement (MFA) and the Agreement on Textile and Clothing (ATC)"," NBER Chapters, in: China's Growing Role in World Trade, pages 387-395 National Bureau of Economic Research, Inc.
  6. Dimitrios Dadakas & Stelios D. Katranidis, 2010. "The Effects of Trade Liberalization in Textiles and Clothing on the Greek Market for Cotton Yarn: A Multi-Market Analysis," Review of International Economics, Wiley Blackwell, vol. 18(1), pages 138-152, 02.
  7. World Bank, 2007. "Vertical and Regional Integration to Promote African Textiles and Clothing Exports : A Close Knit Family?," World Bank Other Operational Studies 7901, The World Bank.
  8. Dadakas, Dimitrios & Katranidis, Stelios D., 2006. "MFA Quotas Elimination: the Case of Cotton Yarn in Greece - a Multi-Market vs. a Single Market Analysis," 2006 Annual meeting, July 23-26, Long Beach, CA 21390, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  9. Sonali Jain-Chandra & A. Prasad, 2005. "The Impact on India of Trade Liberalization in the Textiles and Clothing Sector," IMF Working Papers 05/214, International Monetary Fund.

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