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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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File URL: http://www.ifw-members.ifw-kiel.de/publications/the-cost-of-eu-trade-protection-in-textiles-and-clothing/kap997.pdf
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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. Richard Baldwin, 1989. "Measureable Dynamic Gains from Trade," NBER Working Papers 3147, National Bureau of Economic Research, Inc.
  2. Baldwin, Richard & Forslid, Rikard & Haaland, Jan I., 1995. "Investment Creation and Investment Diversion: Simulation Analysis of the Single Market Programme," CEPR Discussion Papers 1308, C.E.P.R. Discussion Papers.
  3. 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).
  4. 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.
  5. 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.
  6. 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.
  7. Baldwin, Richard & Francois, Joseph, 1997. "Preferential Trade Liberalization in the North Atlantic," CEPR Discussion Papers 1611, C.E.P.R. Discussion Papers.
  8. Martin,Will & Winters,L. Alan (ed.), 1996. "The Uruguay Round and the Developing Countries," Cambridge Books, Cambridge University Press, number 9780521586016.
  9. 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.
  10. Harry G. Johnson, 1960. "The Cost of Protection and the Scientific Tariff," Journal of Political Economy, University of Chicago Press, vol. 68, pages 327.
  11. 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.
  12. 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.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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Citations

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Cited by:
  1. Francois, Joseph & Wörz, Julia, 2006. "Rags in the High Rent District: The Evolution of Quota Rents in Textiles and Clothing," CEPR Discussion Papers 5477, C.E.P.R. Discussion Papers.
  2. 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.
  3. 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).
  4. 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.
  5. Joseph Francois & Julia Woerz, . "Rags in the High Rent District: the Evolution of Quota Rents in Textiles and Clothing," Tinbergen Institute Discussion Papers 06-007/2, Tinbergen Institute.
  6. Dimitrios, Dadakas & Stelios, Katranidis D., 2006. "The Effects of Trade Liberalization in Textiles and Clothing on the Greek Market for Cotton Yarn: A Multi-Market Analysis," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25779, International Association of Agricultural Economists.
  7. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
  8. 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.
  9. 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.

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