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

Cristina Corado

No 1004, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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.

Keywords: Textiles and Clothing; Trade Integration; Trade Policy (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 (search for similar items in EconPapers)
Date: 1994-08
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=1004 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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:cpr:ceprdp:1004

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=1004

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().