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The restrictiveness of the multi-fibre arrangement on Eastern European trade

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Author Info
Erzan, Refik
Holmes, Christopher

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Abstract

Historically, Eastern Europe has not been favorably treated in terms of quota growth in the European Community and U.S. markets - often quite the contrary. But the EC and U.S. treatment of these countries has already changed since their reform and can be expected to become even more favorable. Eastern Europe's exports of textiles and clothing have tended to be more capital-intensive and less specialized than those of other major suppliers, including Asia's newly industrialized economies. Erzan and Holmes argue that Eastern Europe's expansion of relatively labor-intensive products has probably been inhibited byquotas and by the weak adjustment mechanisms inherent in a centrally planned economic system. If so, given market reforms in Eastern Europe, exports of labor-intensive textiles and clothing should expand more than proportionately and the degree of specialization should increase if the Multi-Fibre Arrangement is abolished or its grip on Eastern Europe's exports is relaxed in the EC. Putting aside questions of the composition of exports, textile and clothing exports are to expand considerably because they make up a large part of labor-intensive manufacturers, where Eastern Europe's comparative advantage lies in the near future.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 860.

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Date of creation: 29 Feb 1992
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Handle: RePEc:wbk:wbrwps:860

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Keywords: Markets and Market Access; Economic Theory&Research; Environmental Economics&Policies; Economic Adjustment and Lending; Access to Markets;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. G. Helleiner, 1976. "Industry characteristics and the competitiveness of manufactures from less developed countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 112(3), pages 507-524, September. [Downloadable!] (restricted)
  2. Goto, Junichi, 1990. "A formal estimation of the effect of the MFA on clothing exports from LDCs," Policy Research Working Paper Series 455, The World Bank. [Downloadable!]
  3. Krishna, K. & Erzan, R. & Tan, L.H., 1991. "Rent Sharing In The Multi-Fibre Arrangement: Theory And Evidence From Us Apparel Imports From Hong Kong," Harvard Institute of Economic Research Working Papers 1549, Harvard - Institute of Economic Research.
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  4. Tuong, Ho Dac & Yeats, Alexander, 1980. "On factor proportions as a guide to the future composition of developing country exports," Journal of Development Economics, Elsevier, vol. 7(4), pages 521-539, December. [Downloadable!] (restricted)
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  1. Patricia S. Pollard, 1994. "Trade between the United States and Eastern Europe," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 25-46. [Downloadable!]
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