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LESSONS LEARNED FROM THE PHASE-OUT OF THE MFAs: MOVING FROM MANAGED DISTORTION TO MANAGED DISTORTION

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  • Hudson, Darren
  • Ethridge, Don E.
  • Mutuc, Maria Erlinda M.

Abstract

The establishment and the eventual phase-out of the Multi-Fiber Arrangements (MFAs) have the potential to offer lessons about managed trade. While many factors have influenced the market outcomes in textiles and clothing (T&C), this paper attempts to distill key elements that can form the foundation of a better understanding of changes in managed trade systems for the future. Filtering past history can be difficult because of the myriad of confounding causal factors that result in observed behavior. Nevertheless, a retrospective can be useful because it passes observations through a prism that can delineate some root causes and consequences. This paper proceeds as follows. First, a brief history of textile and clothing MFAs is presented. Next, some of the unintended consequences of textile trade policy are discussed. Third, the pre-MFA phase-out estimates of impacts and compare those with actual outcomes are summarized. Fourth, an overview of the MFA phase-out and some of the policy responses in the wake (or in conjunction with) the phase-out is provided. Finally, we offer some lessons learned from the MFA removal process and some questions for the future.

Suggested Citation

  • Hudson, Darren & Ethridge, Don E. & Mutuc, Maria Erlinda M., 2010. "LESSONS LEARNED FROM THE PHASE-OUT OF THE MFAs: MOVING FROM MANAGED DISTORTION TO MANAGED DISTORTION," Conference Papers 96674, Texas Tech University, Department of Agricultural and Applied Economics.
    • Handle: RePEc:ags:ttudco:96674
    DOI: 10.22004/ag.econ.96674
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    1. Juliette Milgram Baleix, 2005. "Quotas on Clothing Imports: Impact and Determinants of EU Trade Policy," Review of International Economics, Wiley Blackwell, vol. 13(3), pages 445-460, August.
    2. J. Michael Finger & Ann Harrison, 1996. "The MFA Paradox: More Protection and More Trade?," NBER Chapters, in: The Political Economy of American Trade Policy, pages 197-260, National Bureau of Economic Research, Inc.
    3. Kenneth A. Reinert, 2000. "Give Us Virtue, But Not Yet: Safegaurd Actions Under the Agreement on Textiles and Clothing," The World Economy, Wiley Blackwell, vol. 23(1), pages 25-55, January.
    4. Dean Spinanger, 1999. "Textiles Beyond the MFA Phase‐Out," The World Economy, Wiley Blackwell, vol. 22(4), pages 455-476, June.
    5. Jinmin Wang & Jiebing Wu & Xianguo Yao, 2008. "The expansion of textile and clothing firms of China to Asian Least Developed Countries: The Case of Cambodia," Working Papers 6008, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    6. Unknown, 2001. "General Discussion," Proceedings of the 6th Agricultural and Food Policy Systems Information Workshop, 2000: Trade Liberalization Under NAFTA: Report Card on Agriculture 16839, Farm Foundation, Agricultural and Food Policy Systems Information Workshops.
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