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Abstract:
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Under the Uruguay Round's Agreement on Textiles and Clothing (ATC),
the quotas inherited from the Multifibre Arrangement were gradually
phased-out between January 1995 and 31 December 2004. This study
estimates the impact of the ATC's implementation on China's textile
industry and China's cotton sector. The study finds that, assuming
equilibrium levels of income and exchange rates, the adoption of ATC
are expected to increase China's net apparel exports, textile production,
cotton consumption, cotton production and cotton imports. However, this
study fails to support the hypothesis that the adoption of the ATC results
in China supplanting the textile industries of the rest of the developing
world. The impacts on cotton are also smaller than indicated by previous
studies. These outcomes are somewhat sensitive to estimates of expected
efficiency gains around the world. |