World textile in free trade regime

Abstract

The objective of this study is to forecast the future trade patterns and to identify the determinants of exports of textile and clothing. We included top 18 leading exporting countries and zones from the textile and clothing sector. These countries cover more than 70% of global exports and 60% of imports. They cover 81% of the gross world product. To quantify the impacts of causal factors on imports and exports, we developed an econometric model and found that financial liquidity, endogenous production of cotton, and the magnitude of imported raw material and intermediate goods are the root causes of export of textile and clothing products while gross domestic products and exports of textile and clothing products are identified as good predictors of import of textile and clothing products. The study concludes surprising results and mentions that Mexico, Taipei, Hong Kong and India will be the net losers whereas Pakistan, Indonesia, Poland, and Australia will be the net gainers in free trade regime.