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Textiles and Clothing Trade with Central and Eastern Europe: Impact on Members of the EC

Author

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  • Corado, Cristina

Abstract

This paper discusses the Europe Agreements, implicit trade preferences given to the Central and East European countries (CEECs) and their impact on European Community (EC) members. As expected, South European countries compete in the same range of products and in a more similar quality market with the CEECs than do other EC countries. A significant part of this trade is explained by outward-processing trade (OPT) of clothing, however. EC firms increasingly move the labour-intensive stages of production to the CEECs. OPT competes in a different quality market than `direct' trade. Up to 1993, trade policy favoured outward processing and was against `direct' trade and foreign direct investment. We draw some lessons from a similar experience in Portugal regarding OPT movements, foreign direct investment and effects of trade policy changes. During the CEECs' transition period, the policy bias will be eliminated. EC firms may go on processing products in the CEECs or may move elsewhere. The competitive pressures on South European countries will not change with further trade liberalization towards the CEECs because those pressures are unlikely to depend on OPT location. New OPT legislation designed to keep employment in the EC may have distributive effects among EC countries, however. The CEECs are the most likely to suffer from the proposed legislation if it is strictly applied.

Suggested Citation

  • Corado, Cristina, 1994. "Textiles and Clothing Trade with Central and Eastern Europe: Impact on Members of the EC," CEPR Discussion Papers 1004, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:1004
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    Citations

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    Cited by:

    1. Peter Egger, 2006. "Intermediate goods trade and international wage convergence in Central Europe," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 33(4), pages 181-192, September.
    2. Helena Marques, 2008. "Trade And Factor Flows In A Diverse Eu: What Lessons For The Eastern Enlargement(S)?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(2), pages 364-408, April.
    3. Marques, Helena, 2002. "Trade Similarities between Eastern and Southern Europe: Opportunities or Competition?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 3(2), pages 1-20.
    4. José Manuel Martins Caetano & Aurora Galego, 2003. "An Analysis of Actual and Potential Trade between the EU Countries and the Eastern European Countries," Economics Working Papers 3_2003, University of Évora, Department of Economics (Portugal).
    5. Helena Marques & Hugh Metcalf, 2003. "Extending the EU Single Market Eastwards: Sectoral Trade and Real Wage Effects," Discussion Paper Series 2003_10, Department of Economics, Loughborough University, revised Oct 2003.
    6. Cadot, Olivier & Faini, Riccardo & de Melo, Jaime, 1995. "Early trade patterns under the Europe Agreements: France, Germany and Italy," European Economic Review, Elsevier, vol. 39(3-4), pages 601-610, April.
    7. Helena Marques & Hugh Metcalf, 2006. "Ending Restrictions To Migration From The New Eu Member Countries: Sectoral Trade And Real Wage Effects," Contemporary Economic Policy, Western Economic Association International, vol. 24(2), pages 287-299, April.
    8. Béatrice Colin-Sédillot, 1994. "Les échanges industriels entre la France et les pays d'Europe centrale et orientale : premières tendances de la spécialisation," Économie et Statistique, Programme National Persée, vol. 279(1), pages 69-80.

    More about this item

    Keywords

    Textiles and Clothing; Trade Integration; Trade Policy;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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