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The Post MFA Performance of Developing Asia


  • John Whalley


This paper assesses the impact thus far that the termination of trade restrictions under the Multi Fibre Arrangement (MFA) which up to the end of 2004 applied to exports of clothing and textiles in key OECD markets has had on Asian suppliers. The speculation prior to MFA termination had been that large increases of Chinese exports would ensue, and at the expense of other Asian suppliers. Using data from US, EU Chinese and other sources, the picture that emerges is only small impacts on aggregate US and EU imports of clothing and textiles, and equally only small impacts on aggregate Chinese exports of clothing and textiles. There are, however, large changes in the country pattern of trade, and also within more narrowly defined product categories. There are large increases in shipments from China to both the US and the EU, and for the US proportionally more so in textiles than in clothing. But the US accounts for only 20% of China's exports of clothing and textiles, and exports to Japan (comparable in size to the US) hardly change, and to Hong Kong fall sharply. There are also large price falls for shipments to the US and to certain EU countries (Germany). The shares of other Asian suppliers in US markets generally hold up well, with the largest falls occurring in preferentially treated non Asian suppliers such as Mexico. In EU markets, with the exception of India, all non Chinese Asian suppliers experience falls in their market share.

Suggested Citation

  • John Whalley, 2006. "The Post MFA Performance of Developing Asia," NBER Working Papers 12178, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12178
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    References listed on IDEAS

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    Cited by:

    1. repec:ibn:ijefaa:v:9:y:2017:i:8:p:88-102 is not listed on IDEAS
    2. L. Alan Winters & Shahid Yusuf, 2007. "Dancing with the Giants: China, India, and the Global Economy," World Bank Publications, The World Bank, number 6632.
    3. Sak Sambath & Ryuta Ray Kato, 2009. "Future Prospects of the Garment Industry of Cambodia," Working Papers EMS_2009_12, Research Institute, International University of Japan.
    4. repec:wsi:jicepx:v:01:y:2010:i:02:n:s1793993310000123 is not listed on IDEAS

    More about this item

    JEL classification:

    • F00 - International Economics - - General - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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