Elimination Of Quotas Research Articles

Benefits of Economic Liberalization in Growth and Development of Industry: With Reference to Butwal Industrial Area of Nepal

Economic liberalization policy is important to speed up the development activities. Nepal has been following the policy of economic liberalization since the mid-1980s which was accelerated with the start of 1990s. Nepal adopted economic liberalization to minimize public expenditure burden of loss-making public enterprises, mobilize private savings, investments, and FDI (Foreign Domestic Investment) as well as to meet Multilateral Donors conditions of economic reform. The study was conducted to identify the benefit of economic liberalization in industrial growth and development in Nepal. The study was conducted in the Butwal area of Province 5. It was a cross-section study based on the quantitative design. There was total 385 respondents selected from among the industrialists, traders, and bankers. The result shows that there were positive impactson the various economic indicators of industry like quantitative restrictions in trade had been removed, bilateral trade agreement facilitated free flow of goods and services, deregulated the monopoly of market, controlling in price structure, privatization of public services, flexibility in the exchange rate, elimination of import license and quotas, liberalization of foreign investments, High and sustained growth through market-based resource allocation, infusion of competition in the economy, reduction of state domination, and encouragement of private participation in economic activities were the added advantages of liberalization. There was significant difference in the response of industrialists, traders and bankers on benefit of economic liberalization in industrial growth and development in Nepal such as promotion of free trade, deregulation of the monopoly market, elimination of subsidies, price controls and other more benefits.

POLISH FOREIGN TRADE IN CATTLE IN THE YEARS 2004-2015

The purpose of the analysis was to show changes in foreign trade of live cattle in light of the profitability of its production in Poland measured by the relation of cattle price to the price of feed. In the researched period a trend towards more positive balance of trade in beef products was being observed, while imports of cattle were increasing and exports of cattle were decreasing. Decreasing turnover of the foreign trade in cattle was accompanied by relatively slow processes of concentration of cattle production, increasing of livestock, decreasing of the number of farms involved in the breeding of cattle in Poland and changing profitability of cattle production. Relationship of the price cattle less than one year to the price of compound feed for calves was the most favorable for agricultural producers in 2004-2006, and for cattle over one year to the price of compound feed for cattle in 2005-2006 and 2009. The increase in domestic production resulted, inter alia, from the restructuring of the dairy sector, the elimination of milk quotas and the decline in milk prices.

Economic Openness and Stagnation In Central America

Central American countries undertook ambitious programs of economic liberalization during the 1980s' and 1990's, particularly in areas of trade reform, which implied the elimination of import controls and quotas, and substantially lowering import tariffs. The objectives of such reforms were to gain economic efficiency and more dynamic economic growth; however, the results are distant from such objectives. Economic growth has been slower than in the period previous to reform when import substitution policies were in vigor, and the main manifestation of trade reform has beenhigh trade deficits, falls in national savings and investment, and economic stagnation, which has given rise to emigration and high volumes of remittances. This paper analyzes the economic growth experience of the Central America countries in the past two decades, to explain the causes behind the stagnation tendencies that set in after two decade of trade liberalization, and to seek answers to the question of what policies should be undertaken to accelerate economic growth. After a review of the literature on the economic repercussions from trade liberalization in developing countries, a Var model is estimated with the variables: national savings, public and private investment, the level of the external tariff, trade balance and economic growth. The Var permits quantifying the impulse responses of said variables to increases in the external tariff. The results show that an increase in the external tariff would lead to increases in national savings, public and private investment, and in economic growth, and as well, would give rise to a reduction in the trade deficit. Moreover, it is argued that the low growth rates resulting from trade liberalization lead to rising unemployment, and thus give impetus to emigration; the resulting remittances finance the trade deficit and thus the cycle continues in a sort of openness trap. However, by restoring import substitution policies this trap can be overcome. It is recommended that trade protection policies should be implemented so as to create room for investment and thus impart dynamism to economic growth. It is recommended that trade protection should be complemented by human capital policies so as to create a virtuous circle of human capital, governance, productivity, export development and economic growth. It is argued that dynamic economic growth would be conducive to increasing tax revenues which would impart sustainability to health and education investments.

Economic and Household Impacts of Projected Policy Changes for the Irish Agri‐food Sector

AbstractThe policy environment for the Irish agri‐food sector could change rapidly in the coming decade. A potentially positive factor will be the elimination of milk quotas in 2015, although a potentially negative factor will be further trade liberalisation and increased import competition. These changes come on top of the move to decouple direct aids to farmers in 2005 as part of the Mid‐Term Review of the EU's Common Agricultural Policy agreed in 2003. This paper examines these reforms and their impacts on the Irish economy and income distribution using a CGE model particularly rich in detail on the agri‐food sectors, differentiated household groups, and agricultural policy instruments including their links to productive factors and households. The results suggest that the past and projected changes in the policy environment have, in sum, a small positive impact on GDP and household income. However, the gains and losses are unequally distributed across sectors and household groups due to the highly differentiated distribution of support and protection. Although all households generally gain from the sequence of policy reforms in the long run, some experience strong adverse effects from particular reforms and in the medium term.

Trade Liberalization in Textiles and Clothing and Developing Countries: An Analysis with Special Emphasis on the US Import Market

This article examines the role and importance of the textiles and clothing sector in the economies of the United States and developing countries as well as the qualitative changes in the dynamics of the industry. After briefly looking at the history of protectionism in the industry, the article addresses the impact of quota elimination on developing countries' exports to the United States. It also discusses the role of China as the dominant supplier. It suggests that with the elimination of quotas, most of the benefits will probably accrue to a handful of efficient suppliers, notably China and India. The article concludes by providing some recommendations to enable many developing countries to cushion the sudden effects of trade liberalization.

The Effects of Trade Liberalization in Textiles and Clothing on the Greek Market for Cotton Yarn: A Multi-Market Analysis

The Uruguay Round (1987–95) signaled the end of the Multifiber Agreement for textiles and clothing. The quota regime, in place since 1974, was decided, according to the Agreement on Textiles and Clothing, to be gradually eliminated by the year 2005. As a result, prices of cotton-yarn in the world markets decreased, affecting producers in all cotton-yarn exporting countries, including Greece. At the same time, the labor cost in western industrialized countries remained high, or even increased, exerting further pressure on yarn producers. The present paper examines these changes for the cotton-yarn industry in Greece. We use a multi-market partial-equilibrium model which allows us to take into account simultaneous input and output price changes, relevant for the industry under study. Findings show that, after the implementation of the program for the gradual elimination of quotas, producers' welfare decreased whereas consumers noted substantial increases in welfare transfers.

Regionalization of Textile Trade: Evidence from the EU, NAFTA, AFTA, and SAPTA1

This study examines the integration effects of four regional trading agreements (RTAs) respectively the EU, NAFTA, AFTA, and SAPTA on textile fabric trade from 1990–2005. A modified gravity model for analyzing textile trade was first generated by the fixed-effects method. Regional dummy variables were then used to identify trade creation and trade diversion effects arising from the RTAs. The results indicated that neither trade creation nor trade diversion effects existed in the EU textile trade. Trade creation in terms of imports was identified in NAFTA and SAPTA. There is no indication of shifting textiles trade from the rest of the world to the member countries with the implementation of these two free trade areas (FTAs). On the contrary, trade diversion was recognised some years after AFTA's enactment. It represents a movement towards free trade and is beneficial for the welfare of the world. This article provides empirical evidence on how textiles trade influenced by the formation of RTAs and elimination of quotas on textiles products.

Textile and clothing exports of selected South and Southeast Asian countries

PurposeThis paper examines and divulges the impacts of North American Free Trade Agreement (NAFTA) on textile and clothing (T&C) exports from selected South and Southeast (S&SE) Asian developing countries and the NAFTA members to the USA.Design/methodology/approachA gravity model of sectoral‐level analysis was employed to analyze the effects of the NAFTA on T&C trade among member and non‐member countries. Regional indicator variables were used to identify the change in the T&C trade effect arising from the free trade area (FTA).FindingsThe increase in T&C intra trade within the NAFTA could be shown by the increasing trend of the regional indicator variables in three consecutive time intervals from 1990 to 2001 in the regression model. However, the indicator variables of both the T&C trade models decline substantially to negative value in the period 2002‐2005. This is consistent with the current situation that the total export trade among the NAFTA partners has trended downwards in subsequent years. The descending trend of the intra‐NAFTA T&C trade could be attributed to the increasing competition from S&SE Asian countries with the gradual phasing out of quotas under the Agreement of Textiles and Clothing and the further elimination of quotas after 2005.Originality/valueThe value of this research in assessing the correlation between NAFTA on the T&C trade can show S&SE Asian developing countries the importance of them within their emerging economy. This study shows the specific impact of the FTA and offers a vital insight on global T&C trade.

The Impact of Non-tariff Barriers on China’s Textile and Clothing Exports and Relevant Strategies

The textile and clothing industry is a traditional pillar industry for China’s economy. We have developed rapidly in international textile and clothing trading and have gained significant achievements in this field with reform and opening-up to the international market. China also expects to maintain this prevailing trend and to even increase the volume of exports with the gradual reduction of tariffs and the elimination of quotas. With these gains, however, a number of problems have arisen that may threaten the future of the Chinese textile and clothing industry.World trade liberalization doesn’t necessarily mean free markets. The industry is still facing great challenges and difficulties from non-tariff barriers which are playing an ever-greater role in the ability of governments to regulate imports from other countries. Known as “green trade barriers”, new non-tariff barriers to trade, such as technical trade barriers and environmental trade barriers, have taken the place of traditional trade barriers, such as tariffs and quotas. By analyzing the background and current situation of China's textile and clothing industry, as well as the great impact on both sides of these new barriers, this paper puts forward an effective way to clarify what efforts should be made not only by trade companies, but also by the government to alleviate the effects of NTBs. Only through a well-coordinated joint-effort can manufacturers break through such non-tariff trade barriers and enhance the overall quantity and quality of clothing exports, so that China can maintain its current growth in the textile and clothing trade and also regain its reputation as the “kingdom of textiles”.

Smooth as Silk? A First Look at the Post MFA Textiles and Clothing Landscape

Despite the imposition of temporary safeguard measures on Chinese exports by both the United States and the European Union in 2005, few countries other than China and India have increased their clothing exports in markets where Multi-Fiber Arrangement quotas had been removed, e.g. the European Union, the Unites States, and Canada. This article argues that the elimination of import quotas has exposed the vulnerability of fragmented supply chains and favoured countries able to display an integrated supply chain, i.e. domestic production of high quality textile and clothing products. In terms of trade policy implications, the elimination of quotas has reduced the attractiveness of outward processing programmes and, conversely, increased the attractiveness of other preferential trade arrangements, such as regional trade arrangements and the Generalized System of Preferences. The July 2006 postponement of the Doha Round negotiations represents a setback for WTO Members and, with respect to the textile and clothing issues, widespread anxiety among supplying countries due to the competitive strength of China acts against a package of significant tariff reduction applied on a most-favoured-nation basis. To move the Doha negotiations forward, political will is required in agricultural negotiations, including a development-friendly resolution of the problem of cotton subsidies.

The Future of the Apparel and Textile Industries: Prospects and Choices for Public and Private Actors

The expectation that Chinese apparel and textile exports will swamp the US and EU retail markets now that international quotas on those products have been eliminated has fueled much of the discussion of the future of these industries. Although imports from China have surged since the elimination of quotas on 1 January 2005, this conventional wisdom masks important choices that remain for public and private policies over time. In particular, two factors will continue to have major effects on the location of apparel and textile production going forward. First, public-policy choices will continue to influence sourcing location; in particular, as they relate to tariffs and regional trade polices as well as to policies affecting the linkages between countries. Second, the lean-retailing model that now prevails requires apparel suppliers to replenish basic and fashion basic products on a weekly basis. As that retailing model became dominant in the 1990s, so too did the advantage of sourcing these apparel items closer to the US market so that products could be manufactured and delivered more rapidly from a smaller finished-goods inventory. Even though costs remain a driving factor, we show that proximity advantages for certain classes of products will continue in a postquota world as retailers raise the bar ever higher on the responsiveness and flexibility required of their suppliers.

Anti-dumping Retaliation—A Common Threat to International Trade

With the virtual elimination of tariffs and quotas under the General Agreement on Trade and Tariffs/World Trade Organization (GATT/WTO) regime, anti-dumping (AD) has emerged as a key instrument of protection. In recent times there has been a sharp increase in anti-dumping initiations by many of the WTO member countries. Under the new regime of anti-dumping, India has joined traditional users namely, the United States and the European community to become the top three users of anti-dumping laws within the last ten years. In this article we have selected 20 countries on the basis of the number of AD initiations, the number of AD measures, affected by number of AD initiations and affected by number of AD measures for a two-way analysis. Out of this analysis we have taken the top-four countries namely, India, China, United States and the European community and tried to examine the possibility of occurrence of retaliation against them. The correlation test reveals that out of the total anti-dumping cases some of them are likely to be considered as cases of retaliation. The test reacted positively by providing indications of occurrence of retaliation in many cases of anti-dumping by, as well as against, these four countries.

The Economic Impact of EPAs in SADC Countries

The Cotonou Agreement introduces new fundamental principles with respect to trade between the European Union and African, Caribbean and Pacific countries relative to the Lome Convention: in particular non-reciprocal preferential market access for ACP economies will only last until 1 January 2008. After that date, it will be replaced by a string of Economic Partnership Agreements meant to progressively liberalise trade in a reciprocal way. The progressive removal of barriers to trade is expected to result in the establishment of Free Trade Agreements between the EU and ACP regional groups in accordance with the relevant WTO rules and help further existing regional integration efforts among the ACP. In this paper, an applied general equilibrium model (15 regions, 9 sectors) is used to simulate the impact of EPAs for countries of the Southern African Development Community. The standard Global Trade Analysis Project (GTAP) model has been extended to include the elimination of textile quotas, EU enlargement to 25 members as well as tax revenue sharing and a common external tariff among Southern African Customs Union countries. A number of comparisons between different scenarios are undertaken, in particular: (i) the EPA scenario is compared to the multilateral liberalization scenario; (ii) SADC liberalization with the EU only is compared to a scenario with simultaneous regional integration among African economies and to the case of the EU also signing an FTA with Mercosur; and (iii) a complete reduction of import barriers is contrasted with partial liberalization (i.e. only 50 per cent tariff reductions in agriculture) and with full trade liberalization that includes the elimination of subsidies. The issue of tariff revenue loss is also addressed and the required tax replacement is calculated. Selected experiments are re-run under an unemployment closure. Simulation results show that EPAs with the EU are welfare-enhancing for SADC overall, leading also to substantive increases in real GDP. For most countries further gains may arise from intra-SADC liberalization. The possibility of the EU entering an FTA with other countries, such as Mercosur, reduces estimated gains, but they still remain largely positive. Similarly, estimated gains need to be revised downwards if agriculture liberalization is not as far reaching as a reduction of import barriers for manufactures. At the sectoral level, the largest expansions in SADC economies take place in the animal agriculture and processed food sectors, while manufacturing becomes comparatively less attractive following EU-SADC liberalization. Interestingly, multilateral liberalization would instead foster some of the manufacturing sectors (textile and clothing and light manufacturing). Results also show the need for the SACU tariff pooling formula to be adjusted to reflect new import patterns as tariffs are removed.

Production Costs, Scale Economies, and Technical Change in U.S. Textile and Apparel Industries

The elimination of quotas in textiles and apparel poses new threats from import competition. To survive, the sectors need to find least-cost methods of production. The production–cost structure of the U.S. textile and apparel industries is examined using a dual cost framework. A translog cost function is used to measure substitution elasticities between inputs, scale economies, and the nature of technical change. The scope for factor substitution in textiles remains limited with all substitution elasticities being less than unity. Labor and materials are complements in apparel production, but there is evidence of substitution between capital and labor. The rate of technical change is higher in textiles than in apparel. Given the intense import competition from low wage countries, in both industries, technical progress is labor saving. Overall, economies of scale are larger in apparel; however, scale economies have continued to increase in textiles.

Impact of China's WTO Accession on East Asia

China's World Trade Organization (WTO) accession will have major implications for China and present both opportunities and challenges for East Asia. Ianchovichina and Walmsley assess the possible channels through which China's accession to the WTO could affect East Asia and quantify these effects using a dynamic computable general equilibrium model. China will be the biggest beneficiary of accession, followed by the industrial and newly industrializing economies (NIEs) in East Asia. But their benefits are small relative to the size of their economies and to the vigorous growth projected to occur in the region over the next 10 years. By contrast, developing countries in East Asia are expected to incur small declines in real GDP and welfare as a result of China's accession, mainly because with the elimination of quotas on Chinese textile and apparel exports to industrial countries China will become a formidable competitor in areas in which these countries have comparative advantage. With WTO accession China will increase its demand for petrochemicals, electronics, machinery, and equipment from Japan and the NIEs, and farm, timber, energy products, and other manufactures from the developing countries in East Asia. New foreign investment is likely to flow into these expanding sectors. The overall impact on foreign investment is likely to be positive in the NIEs, but negative for the less developed East Asian countries as a result of the contraction of these economies' textile and apparel sector. As China becomes a more efficient supplier of services or a more efficient producer of high-end manufactures, its comparative advantage will shift into higher-end products. This is good news for the poor developing economies in East Asia, but it implies that the impact of China's WTO accession on the NIEs may change to include heightened competition in global markets.

Why Do Firms Pay Antidumping Duty?

With the virtual elimination of tariffs and quotas under GATT, antidumping measures emerged as a key instrument of protection. Under antidumping actions exporters can either raise the price to eliminate the dumping margin or pay an antidumping duty. This paper analyzes the incentives to exporters to choose between duty or settlement outcomes and finds that due to the smaller loss in market share exporters may prefer an antidumping duty over voluntary settlement. The paper analyzes the welfare implications of these outcomes and finds that they are ambiguous.

Integration and Interdependence in the U.S. and Canadian Live Cattle and Beef Sectors

Introduction The live cattle and beef markets of Canada and the United States are well integrated and highly interdependent, but this alignment occurs in an unequal fashion. Following this relation, the present paper assesses the role of trade agreements and domestic policies in increasing market integration and, also, analyzes the impact of remaining barriers to integration. This integration is necessarily accompanied by interdependence between the U.S. and Canadian livestock sectors and has associated costs and benefits. Discussing these issues, we use integration in the context of forming or blending markets into a whole--implying a certain degree of harmony. Criteria used to assess the degree of integration between the live cattle and beef markets include the following: --prices in the two countries moving together (technically speaking, becoming cointegrated) so that a shock in one output market is transmitted to the other output market via supply and demand adjustments, and prices differ between points by transportation costs; --trade occurring between the two countries; and --similarities existing in important markets for inputs--in this case, feed. For market integration to occur, the commodity in question must be relatively homogeneous, or without large differences in quality characteristics between the two countries. Integration of two countries' markets for a particular commodity--in this case, live cattle and beef--is prevented by the existence of trade barriers, including tariffs, quotas, and border regulations. Creation of an integrated market for live cattle and beef is also influenced by factors affecting supply and demand in each country. These factors include health and safety regulations, macroeconomic policies, and domestic agricultural and trade policies that affect commodity production and marketing and the cost of inputs such as feed grain. This paper begins with a discussion of trade agreements between the United States and Canada, the current level of integration of the U.S. and Canadian live cattle and beef markets, and resulting trade in live cattle and beef. (1) It then assesses remaining barriers to market integration. Trade in Live Cattle and Beef Provisions of CUSTA When the Canada-United States Trade Agreement (CUSTA) was implemented in 1989, tariffs on both live cattle and beef were reduced and, within a few years, many were eliminated altogether. (2) Since tariff reductions were already in place, the implementation of the North American Free Trade Agreement (NAFTA) beginning in 1994 had little impact on trade between Canada and the United States, as the provisions from CUSTA were largely incorporated into NAFTA. In 1996, the United States imported 1.5 million head of slaughter and feeder cattle from Canada, nearly a sixfold increase in the number of cattle imported prior to CUSTA, which numbered 262,091 in 1987 (see Figure 1). However, live cattle imports are still extremely small compared to the U.S. market, with imports of live cattle in 1996 (carcass weight equivalent) constituting around 4 percent of U.S. beef consumption. Figures 2 and 3 show production, consumption, and trade of live cattle for the United States and Canada. The United States exported 40,722 head of live cattle to Canada in 1996, which is less than 1 percent of 1997 Canadian consumption. Figure 1 illustrates trade in live cattle between the two countries and changes in tariff regimes. It is likely that changes in the tariffs were not extremely important in determining trade levels, as tariffs were already quite small at the beginning of the CUSTA. In 1988, the U.S. tariff on live cattle imports from Canada was 2.2 U.S. cents/kilogram, just 1.4 percent on an ad valorem basis. The elimination of quotas may have been more important than reductions in tariffs in increasing trade between the United States and Canada. Before the CUSTA, each country restricted imports under their domestic meat import laws. …

Trade and Industrialisation Revisited (The Iqbal Memorial Lecture)

In 1970 the book Industry and Trade in Some Developing Countries by myself, Tibor Scitovsky and Maurice Scott was published (referred to henceforth as LSS). It exposed the bad effects of the import substitution policies which had been the prevailing mode of industrialisation in developing countries for a long time. It advocated the elimination of quotas and a uniform tariff of 10-15 percent. The exchange rate should be adjusted to ensure that exports were competitive. If any industry was, exceptionally, to receive more promotion than that implied by the low tariff, this should be by some form of subsidisation which should not exceed another 10-15 percent of domestic value-added. LSS is, I believe, still the most quoted work on the subject. l It was quite closely related in theory to the methods of cost-benefit analysis proposed by Little and Mirrlees (1974) (referred to henceforth as LM). While the influence of LSS on the development literature was extensive, neither it nor LM would seem to have had any influence whatever on the policies of most developing countries for a decade. This is, perhaps, the normal fate of policyoriented books. Korea and Taiwan continued with the export policies they had already initiated. Admittedly these policies eliminated the bias against exports inherent in protective policies, a bias that LSS had castigated. But Korea, and to a lesser extent Taiwan, also reverted in the 1970s to the selective promotion of some mainly capital intensive industries (referred to as Heavy and Chemical Industiies (HCI) in Korea) producing tradables. In Korea, towards the end of the 1970s, it is possible that LSS played some part in the modification of the HCI drive. But only in Chile was the policy of a low uniform tariff, as advocated by LSS, wholly adopted. Chile has stuck to this policy.

Global Effects of Developed Country Trade Restrictions on Textiles and Apparel

This paper uses an applied general equilibrium model to analyze the impacts of quota and tariff restrictions used by developed countries against textile and clothing imports from developing countries. In the model, countries are represented by their actual size in terms of GDP, weakening rent transfer effects compared to partial equilibrium analysis. Results, based on 1986 data, suggest annual global gains from elimination of quotas and tariffs of around $23 billion. In aggregate, developing countries gain around $8 billion, suggesting that gains to developing countries from improved access more than offset losses from foregone rent transfers as quotas and tariffs are abolished. Copyright 1990 by Royal Economic Society.