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Do developing countries lose from the MFA?

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  • Do developing countries lose from the MFA?
  • Trela, Irene; Whalley, John
  • National Bureau of Economic Research


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Title Do developing countries lose from the MFA?
Similar Titles
Material Type Reports
Author(English)

Trela, Irene; Whalley, John

Publisher

Cambridge:National Bureau of Economic Research

Date 1988-06
Series Title; No NBER Working Paper Series / 2618
Pages 47
Subject Country Asia & Pacific(Asia and Pacific)
South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Trade
Industry and Technology < General
Holding National Bureau of Economic Research

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. (The rest omitted)