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The impact of removal of ATC quotas on international trade in textiles and apparel: Policy issues in international trade and commodities study series no. 45

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Theory predicts that a system of bilateral quotas such as observed in the Agreement on Textiles and Clothing (ATC) will cause both trade diversion and trade deflection, with an end result of more trading partners and smaller values traded on average than in the absence of the quotas. Quota removal will reverse this process, leading to trade creation and the focusing of trade in larger values by a smaller group of exporters.

We test these predictions in a model of bilateral trade among 128 world trading partners in cotton textiles and apparel. We build a microfounded model of bilateral imports and estimate this model for those countries over the period 1997-2004. We find evidence of both trade diversion and trade deflection in this period governed by quotas.

The quota system was largely removed at the beginning of 2005. We use the model estimated for the quota system years to predict bilateral trade in textiles and apparel in 2005 (out of sample). We do not find evidence of trade focus on average. This aggregate non-result is shown to be due to the averaging of the anticipated trade creation effect among a small group of low comparative cost exporters and the opposite, trade rediverting, effect among a larger group of countries displaced from sales in the United States and the European Union (EU) by the removal of quotas.

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Ketersediaan

2024-1749

382 Fug i

Perpustakaan Diplomasi

Tersedia

Informasi Detail

Judul Seri

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No. Panggil

382 Fug i

Penerbit

New York : United Nations Publication., 2010

Deskripsi Fisik

vi, 42 pages : illustrations (black and white) ; 30 cm

Bahasa

English

ISBN/ISSN

1607-8291

Klasifikasi

382

Tipe Isi

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Tipe Media

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Tipe Pembawa

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Edisi

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Subjek

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Info Detail Spesifik

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Pernyataan Tanggungjawab

Marco Fugazza

Versi lain/terkait

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