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The implications of the elimination of the multi-fibre arrangement for small remote island economies: A network analysis

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  • Shamnaaz B. Sufrauj

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Abstract

This paper explores the topological structure of the network of trade in textiles and clothing (T&C) that were governed by the multi-fibre arrangement (MFA)—a quantitative restriction on developing countries’ exports to developed countries. Trade relations between small remote island economies (SRIEs) and major world exporters are investigated. Initially, many SRIEs benefited because their MFA quotas were not binding and they had unprecedented access to lucrative developed markets. However, they were subsequently disadvantaged by the elimination of the quota system. Network analysis reveals that the MFA influenced the geography of T&C manufacturing and altered the pattern of network formation. The evolution of network statistics shows that SRIEs became more interconnected among themselves during the post-MFA period suggesting an increased preference to trade with closer partners. The network of textiles products is less dense and more stable than that of clothing. On a global stance, post-MFA trade declined but there is evidence of trade convergence.

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Bibliographic Info

Paper provided by Department of Economics, University of Trento, Italia in its series Department of Economics Working Papers with number 1201.

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Date of creation: 2012
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Handle: RePEc:trn:utwpde:1201

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Keywords: Small islands; multi-fibre agreement; network analysis; trade;

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  1. Przemyslaw Kowalski & Margit Molnár, 2009. "Economic Impacts of the Phase-Out in 2005 of Quantitative Restrictions under the Agreement on Textiles and Clothing," OECD Trade Policy Papers 90, OECD Publishing.
  2. Jörg MAYER, 2004. "Not Totally Naked: Textiles And Clothing Trade In A Quota Free Environment," UNCTAD Discussion Papers 176, United Nations Conference on Trade and Development.
  3. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2008. "The World-Trade Web: Topological Properties, Dynamics, and Evolution," Sciences Po publications 2008/16, Sciences Po.
  4. Anne-Célia Disdier & Keith Head, 2004. "The Puzzling Persistence of the Distance Effect on Bilateral Trade," Development Working Papers 186, Centro Studi Luca d\'Agliano, University of Milano.
  5. John Foster, 2005. "From simplistic to complex systems in economics," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 873-892, November.
  6. Stephen Redding & Anthony J. Venables, 2002. "The Economics of Isolation and Distance," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 28, pages 93-108.
  7. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "International Trade and Financial Integration: a Weighted Network Analysis," Documents de Travail de l'OFCE 2007-11, Observatoire Francais des Conjonctures Economiques (OFCE).
  8. Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "On the Topological Properties of the World Trade Web: A Weighted Network Analysis," Papers 0708.4359, arXiv.org.
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