Impacts of Multi-Fiber Arrangement Removal on Global Textile and Cotton Trade

Doris Yan Xia

No 19453, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: Textiles and apparel trade has been governed by the Multi-Fiber Arrangement (MFA) for three decades. Trade restrictions have generated substantial welfare losses and price wedges in exporting and importing countries through trade distortions. Beginning in 1995, textiles and apparel trade underwent fundamental changes. MFA quota will be removed by Jan 2005 according to World Trade Organization's Agreement on Textiles and Clothing (ATC). This study established an equilibrium displacement model to investigate the impact on textile and cotton sectors of different countries and country-groups of removing the MFA quota. The model specifies the basic linkages of textile and cotton markets in the United States, China and three other country-groups. With different parameter values for U.S. textile supply elasticity, assumptions about foreign cotton exporters' reaction and changes in the U.S. loan deficiency payment, alternative scenarios in the short run and long run are computed to predict changes in domestic and import demand for textiles and apparel, import demand for U.S. cotton, domestic and import price of textiles and apparel, U.S. cotton price and adjusted world cotton price. Generally, results indicated increased import demand for U.S. cotton, higher textiles/apparel export supply from China, decreased domestic demand for U.S. cotton, and lower U.S. domestic demand for textiles and apparel. However, both textile prices and cotton prices had positive or negative changes depending on different scenarios.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 33
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/19453/files/sp05xi01.pdf (application/pdf)

Related works:
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:ags:aaea05:19453

DOI: 10.22004/ag.econ.19453

Access Statistics for this paper

More papers in 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().