IDEAS home Printed from https://ideas.repec.org/p/ris/adbewp/0114.html

Price Dynamics in the US Market for Apparel Imports: Impact of Quota Elimination under the Agreement on Textiles and Clothing and Safeguard Restrictions on the People's Republic of China

Author

Listed:
  • William James

    (Asian Development Bank)

  • Juan Paolo Hernando

    (Asian Development Bank)

Abstract

This paper evaluates the impact of the removal of quotas on unit prices of clothing imports from various suppliers into the second largest global market for clothing imports, the United States (US). New quota restrictions over 26 categories of clothing were introduced on 1 January 2006 and will be in place through 31 December 2008. The paper examines the impact of these new restrictions on price movements in 2006 and the first three quarters of 2007. The dynamics of change in unit prices for 26 major groups of suppliers in the US market are indicative of the adverse effects that quantitative restrictions have on US consumers. However, the restrictions have benefited other Asian clothing suppliers. The paper also examines the strategic response to elimination of quotas under the Agreement on Textiles and Clothing by the US using preferential trade agreements to carve out a captive market for US textile intermediate products through large preferential margins in applied tariffs and rules of origin. The outlook for future price developments is assessed and conclusions regarding options for developing Asian suppliers to maintain their ability to compete in the US market are briefly considered.

Suggested Citation

  • William James & Juan Paolo Hernando, 2008. "Price Dynamics in the US Market for Apparel Imports: Impact of Quota Elimination under the Agreement on Textiles and Clothing and Safeguard Restrictions on the People's Republic of China," ADB Economics Working Paper Series 114, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0114
    as

    Download full text from publisher

    File URL: https://www.adb.org/publications/price-dynamics-us-market-apparel-imports-impact-quota-elimination-under-agreement
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Markusen, James R. & Melvin, James R. & Maskus, Keith E. & Kaempfer, William, 1995. "International trade: theory and evidence," MPRA Paper 21989, University Library of Munich, Germany.
    2. Tewari Meenu, 2006. "Is Price and Cost Competitiveness Enough for Apparel Firms to Gain Market Share in the World after Quotas? A Review," Global Economy Journal, De Gruyter, vol. 6(4), pages 1-48, November.
    3. Aaditya Mattoo & Devesh Roy & Arvind Subramanian, 2003. "The Africa Growth and Opportunity Act and its Rules of Origin: Generosity Undermined?," The World Economy, Wiley Blackwell, vol. 26(6), pages 829-851, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cherkashin, Ivan & Demidova, Svetlana & Kee, Hiau Looi & Krishna, Kala, 2015. "Firm heterogeneity and costly trade: A new estimation strategy and policy experiments," Journal of International Economics, Elsevier, vol. 96(1), pages 18-36.
    2. Kelly Ruth, 2010. "EU and U.S. Non-Reciprocal Preferences: Maintaining the Acquis," The Law and Development Review, De Gruyter, vol. 3(1), pages 1-39, April.
    3. Benarroch, Michael & Weder, Rolf, 2006. "Intra-industry trade in intermediate products, pollution and internationally increasing returns," Journal of Environmental Economics and Management, Elsevier, vol. 52(3), pages 675-689, November.
    4. Erwin Bulte & Edward Barbier, 2005. "Trade and Renewable Resources in a Second Best World: An Overview," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(4), pages 423-463, April.
    5. Cooke, Edgar F A, 2011. "The impact of trade preferences on exports of developing countries: the case of the AGOA and CBI preferences of the USA," MPRA Paper 31439, University Library of Munich, Germany.
    6. Na-Allah, Abdelrasaq & Muchie, Mammo, 2012. "Social absorption capability, systems of innovation and manufactured export response to preferential trade incentives," Research Policy, Elsevier, vol. 41(1), pages 93-101.
    7. Koo, Won W. & Uhm, Ihn H., 2000. "U.S.-Canada Border Disputes In Grains: Dynamic Interface Between The Free Trade Agreement And Trade Remedy Laws," Agricultural Economics Reports 23267, North Dakota State University, Department of Agribusiness and Applied Economics.
    8. Peter Warr, 2002. "Export taxes and income distribution: The Philippines coconut levy," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(3), pages 437-458, September.
    9. Mary Amiti & John Romalis, 2007. "Will the Doha Round Lead to Preference Erosion?," IMF Staff Papers, Palgrave Macmillan, vol. 54(2), pages 338-384, June.
    10. Chowdhury, Md. Maruf Hossan & Quaddus, Mohammed A., 2015. "A multiple objective optimization based QFD approach for efficient resilient strategies to mitigate supply chain vulnerabilities: The case of garment industry of Bangladesh☆,☆☆☆This manuscript was processed by Associate Editor B. Lev," Omega, Elsevier, vol. 57(PA), pages 5-21.
    11. Razmi, Arslan, 2007. "Pursuing manufacturing-based export-led growth: Are developing countries increasingly crowding each other out?," Structural Change and Economic Dynamics, Elsevier, vol. 18(4), pages 460-482, December.
    12. Roberto De Luca & Marco Di Mauro & Angelo Falzarano & Adele Naddeo, 2017. "A hydrodynamic model for cooperating solidary countries," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 90(7), pages 1-7, July.
    13. David R. Sabiston, 2001. "Le pass-through du taux de change," L'Actualité Economique, Société Canadienne de Science Economique, vol. 77(3), pages 425-454.
    14. Kala Krishna, 2005. "Understanding Rules of Origin," NBER Working Papers 11150, National Bureau of Economic Research, Inc.
    15. Patricia Augier & Michael Gasiorek & Charles Lai Tong, 2005. "The impact of rules of origin on trade flows [‘Rules of origin and the EU-Med partnership: the case of textiles’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 20(43), pages 568-624.
    16. Udayan Roy, 2005. "International Trade and the Value of Time," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 757-769, September.
    17. Nouve, Kofi & Staatz, John M., 2003. "Has Agoa Increased Agricultural Exports From Sub-Saharan Africa To The United States?," Staff Paper Series 11573, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    18. Satyaki, Roy, 2009. "Garments Industry in India: Lessons from Two Clusters," MPRA Paper 23469, University Library of Munich, Germany.
    19. Nae-Chan Lee & Han-Young Lie, 2003. "Korea's Telecom Services Reform through Trade Negotiations," NBER Chapters, in: Trade in Services in the Asia-Pacific Region, pages 243-282, National Bureau of Economic Research, Inc.
    20. Böhringer, Christoph & Rutherford, Thomas Fox & Wiegard, Wolfgang, 2003. "Computable general equilibrium analysis: Opening a black box," ZEW Discussion Papers 03-56, ZEW - Leibniz Centre for European Economic Research.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:adbewp:0114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Orlee Velarde (email available below). General contact details of provider: https://edirc.repec.org/data/eradbph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.