Impacts of quota elimination on world textile trade: a reality check from 2000 to 2010

Abstract

This study aims to conduct a reality check of the real impacts of quota elimination on world textile trade. By using the multivariate analysis of variance (MANOVA) technique, export performances of 41 top textile exporters in the world market from 2000 to 2010, including their relative and absolute export growth measured by seven dependent variables, were compared. Results of the MANOVA analysis suggested that textile exporters’ performances in response to quota elimination were unequal and related to their economic advancement level. The middle-income countries in general appeared to achieve the best performances in the postquota era while the high-income countries turned out to be ‘losers’ since quota elimination. Findings of this study imply that research strategy applied to evaluate the impacts of quota elimination on textile trade shall be different from the one evaluating clothing trade. The results also call for attention to the new round of structural change of world textile trade that may have unfolded since the outbreak of the world financial crisis in 2008. Additionally, findings of this study reflect the difficulty of upgrading the textile and clothing sector in the less-developed countries.