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Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General-Equilibrium Approach

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  • Aziz Elbehri
  • Thomas Hertel
  • Will Martin

Abstract

The agreement to abolish the quotas on textiles and clothing introduced under the Multi-fiber Arrangement (MFA) will create a new and much more competitive world market for India's exports of textiles and clothing. India's inefficient and costly policies, such as cotton export quotas, the hank yarn obligation, and the restrictive policies on foreign investment that have held back productivity in the Indian apparel sector, will impose serious costs. The authors consider the implications of reforming these policies in an open trading environment using a multiregion, applied general-equilibrium model. They find that the costs of these policies to India increase substantially following abolition of the MFA; the benefits to India from domestic reforms are considerably enhanced when there is global free trade in textiles and apparel. Copyright Blackwell Publishing Ltd 2003.

Suggested Citation

  • Aziz Elbehri & Thomas Hertel & Will Martin, 2003. "Estimating the Impact of WTO and Domestic Reforms on the Indian Cotton and Textile Sectors: a General-Equilibrium Approach," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 343-359, August.
  • Handle: RePEc:bla:rdevec:v:7:y:2003:i:3:p:343-359
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    Citations

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    Cited by:

    1. Nordås, Hildegunn Kyvik, 2004. "The global textile and clothing industry post the agreement on textiles and clothing," WTO Discussion Papers 5, World Trade Organization (WTO), Economic Research and Statistics Division.
    2. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2008. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global Computable General Equilibrium Analysis of Economic Impacts," Economic Development and Cultural Change, University of Chicago Press, vol. 56, pages 265-296.
    3. International Monetary Fund, 2005. "Crouching Tiger, Hidden Dragon; What Are the Consequences of China’s WTO Entry for India’s Trade?," IMF Working Papers 05/101, International Monetary Fund.
    4. Arief Anshory Yusuf, 2004. "Poverty and Environmental Degradation: Searching for Theoretical Linkages," Working Papers in Economics and Development Studies (WoPEDS) 200403, Department of Economics, Padjadjaran University, revised Oct 2004.
    5. Peter Walkenhorst, 2004. "Liberalising Trade in Textiles and Clothing: A Survey of Quantitative Studies," International Trade 0401007, EconWPA.
    6. Kyvik Nord°as, Hildegunn., 2005. "Labour implications of the textiles and clothing quota phase-out," ILO Working Papers 993744523402676, International Labour Organization.
    7. Kathuria, Sanjay & Martin, Will & Bhardwaj, Anjali, 2001. "Implications for South Asian countries for abolishing the Multifibre Arrangement," Policy Research Working Paper Series 2721, The World Bank.
    8. repec:ilo:ilowps:374452 is not listed on IDEAS
    9. Aziz ELBEHRI, "undated". "MFA Quota Removal and Global Textile and Cotton Trade: Estimating Quota Trade Restrictiveness and Quantifying Post-MFA Trade Patterns," EcoMod2004 330600048, EcoMod.

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