Do Developing Countries Lose From the MFA?

Irene Trela and John Whalley

No 2618, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper provides estimates of both national and global welfare costs of bilateral quotas on textiles and apparel using an applied general equilibrium model which covers bilateral quotas on exports of textiles and apparel negotiated between three major developed importing countries (the US, Canada and the EEC) and 34 supplying developing countries under the provisions of the Multifibre Arrangement applying in mid-1980s (MFA 111). Results using 1986 data clearly show that the vast majority of developing countries gain from MFA removal, with some gaining proportionately more than others. This suggests that despite foregone rent transfers, developing countries would receive gains by eliminating the MFA. In the central variant analysis, all developing countries gain by eliminating tariff and MFA restrictions because, contrary to popular belief, the developing countries (including Hong Kong, South Korea and Taiwan) are relatively small compared to developed countries even in apparel production. Rather than losing share to other developing countries under an MFA elimination, higher Income developing countries (like other developing countries) gain market share at the expense of reduced developed country production.

Date: 1988-06
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published as "Global Effects of Developed Country Trade Restrictions on Textiles and Apparel", Economic Journal, vol. 100, December 1990, pp. 1190-1205

Downloads: (external link)
http://www.nber.org/papers/w2618.pdf (application/pdf)

Related works:
Working Paper: DO DEVELOPING COUNTRIES LOSE FROM THE MFA? (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:2618

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w2618

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().