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Effects of the multifibre arrangement on developing countries'trade : an empirical investigation

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  • Erzan, Refik
  • Goto, Junichi
  • Holmes, Paula

Abstract

This paper addresses two issues: (i) the extent of the restrictiveness/effectiveness of the Multifibre Arrangement (MFA) with respect to the developing country suppliers of textile products during the 1980s, and (ii) the extent to which these restrictions yield trade gains for the less established developing suppliers. After analyzing data, the author's made the following conclusions. Rather than ease up, the MFA became more restrictive. Proportionately more shipments were subject to quotas and volume generally grew less where quotas were binding. The unit value of shipments subject to binding quotas also increased substantially more than the unit value of unconstrained items. Developing countries that were new exporters of textile products also hoped to capture a larger share of the textile market as a result of quotas for other developing countries. However, the needy countries have benefited little from the MFA, and countries whose exports grow soon find themselves on the restricted list. Finally, domestic producers in the United States have benefited most from the MFA.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 297.

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Date of creation: 30 Nov 1989
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Handle: RePEc:wbk:wbrwps:297

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Related research

Keywords: Environmental Economics&Policies; Economic Theory&Research; Markets and Market Access; Access to Markets; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT;

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References

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  1. Trela, I. & Whalley, J., 1989. "Unravelling The Threads Of The Mfa," University of Western Ontario, The Centre for the Study of International Economic Relations Working Papers 8904c, University of Western Ontario, The Centre for the Study of International Economic Relations.
  2. Goto, Junichi, 1988. "Effects of the multifibre arrangement on developing countries : a survey," Policy Research Working Paper Series 102, The World Bank.
  3. Tarr, David G, 1987. "Effects of Restraining Steel Exports from the Republic of Korea and Other Countries to the United States and the European Economic Community," World Bank Economic Review, World Bank Group, vol. 1(3), pages 397-418, May.
  4. 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.
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Cited by:
  1. Faini, Riccardo & de Melo, Jaime & Takacs, Wendy, 1993. "A primer on the MFA maze," Policy Research Working Paper Series 1088, The World Bank.
  2. Ben Bassem, 2009. "The Impact of the Removal of the Multi-Fiber Arrangements on Tunisian Textile and Clothing Exports," Transition Studies Review, Springer, vol. 16(1), pages 206-219, May.
  3. Erzan, Refik & Holmes, Paula, 1990. "An evaluation of the main elements in the leading proposals to phase out the Multi-Fibre Arrangement," Policy Research Working Paper Series 483, The World Bank.
  4. Safadi, Raed & Laird, Sam, 1996. "The Uruguay Round agreements: Impact on developing countries," World Development, Elsevier, vol. 24(7), pages 1223-1242, July.
  5. Spinanger, Dean, 1994. "Profiting from protection in an open economy: Hong Kong's supply response to EU's MFA restrictions," Kiel Working Papers 653, Kiel Institute for the World Economy.

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