Multi-Fiber Arrangement Expiration: Implications for South Asia

Slides:



Advertisements
Similar presentations
Chapter 7: Global Markets in Action
Advertisements

In this chapter, look for the answers to these questions:
EC 936 ECONOMIC POLICY MODELLING LECTURE 5: MODELS OF TRADE AND TRADE POLICY: CGE PERSPECTIVES ON TRADE LIBERALIZATION.
Ch.20: Trading with the World
Comparative Advantage
Apparel Industry: China “The Sleeping Dragon” By: Amanda LaConte Kate McElroy Brian Morris.
Trade, Growth, and Poverty Reduction William R. Cline Center for Global Development and Institute for International Economics.
Determination of Trade Policy in the real world  Political  Economical – Optimum Tariff Rate  Strategic Game Playing between Countries Negotiations.
Transforming China and India: Challenges and Opportunities Chris Milner (GEP, School of Economics, University of Nottingham)
1 Specific factors and Costs of Adjustment International Trade – Session 2 Daniel TRAÇA.
Sources of Comparative Advantage
Latin America, continued Relatively weak internal trade relationships compared to Europe or North America Relatively strong trade relationships with Europe.
Impact of MFA Phase-Out on the World Economy -- An Intertemporal, Global General Equilibrium Analysis Xinshen Diao Trade and Macroeconomic Division International.
Chapter 7: Global Markets in Action
McGraw-Hill/Irwin Copyright  2008 by The McGraw-Hill Companies, Inc. All rights reserved. Comparative Advantage and Trade 2-1.
Foundations of Modern Trade Theory: Comparative Advantage
Coping with Industrial Restructuring and MFA Phase out Experience of UI ZENSEN Toru Nakajima Central Executive Standing Committee Member UI ZESNEN.
Benefits and pitfalls of Africa’s engagement with emerging economies Nichodemus Rudaheranwa
The United States and the Global Economy COI1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the.
U.S. Sourcing Perspective Today April 27, Outlook for the Global Economy Outlook for the Global Economy Consumer Confidence Consumer Confidence.
Globalisation and India: Voices from the Ground Rashmi Banga UNCTAD INDIA Lucknow 18 th -19 th December 2006.
North American Free Trade Agreement NAFTA
Copyright ©2002, South-Western College Publishing International Economics By Robert J. Carbaugh 8th Edition Chapter 1: The International Economy.
Trade Union strategies ITGLWF / TWARO Post MFA 5-9 September Bangkok By Esther Busser, ICFTU.
Bi-lateral FTAs, RTAs and Unilateral Liberalization: The South Asian Trade Highways Presented at the ARTNeT-PEP Policy Forum on “Trade, Investment and.
1 China’s WTO Accession: Some Lessons for Vietnam Will Martin World Bank 3 June 2003.
The United States and the Global Economy COI1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the.
Chapter 6: The United States in the Global Economy
© 2010 Pearson Education Canada. iPods, Wii games, and Roots sweaters are just three of the items you might buy that are not produced in Canada. In.
6/3/ The U.S. in the Global Economy Chapter 5.
1 Chapter 21 International Trade and Finance ©2004 Thomson/South-Western Key Concepts Key Concepts Summary Summary Practice Quiz.
Chapter 7 Trade McGraw-Hill/IrwinCopyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.
Multi-Fiber Arrangement Expiration: Implications for South Asia Ashe Hate Shisir Khanal John Larsen Paul Smart Romina Soria David Zanni.
PRINCIPLES OF MACROECONOMICS LECTURE 11 ECONOMICS OF PROTECTIONISM.
Trade. Growth of trade In 1991, the US exported $365 billion and Imported $450 billion By 2004 those numbers had increased to $1.151 trillion in exports.
Economic Integration and Mexico’s Manufacturing Performance: Is Chinese Competition to Blame? Ernesto López-Córdova, Inter-American Development Bank 2004.
International Trade. Review: Comparative Advantage Absolute Advantage: able to produce more per unit of labor Absolute Advantage: able to produce more.
Trade Policy Chapter 2 Tariffs  We will study the effects of trade barriers. Our analysis begins by examining the most basic barrier.
International Trade and Global Economic Challenges.
ECO 121 MACROECONOMICS Lecture Three Aisha Khan Section L & M Spring 2010.
1 Introduction to International Trade and Trade Policy.
UNIT 7 REVIEW GAME International Trade Basics Free Trade & Protectionism Globalization Issues The United Nations & Internationalism
Apparel employment, trade, and economic development in South Asia Gladys Lopez-Acevedo Office of the Chief Economist for South Asia, The World Bank Islamabad,
“…global multinationals have … viewed developing Asia [countries]…as an offshore-production platform. The offshore- efficiency solution is still an attractive.
The United States in the Global Economy COI1 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior.
International Trade & Business Growth
Chapter 8 – Free Trade 8.1 What is Trade?
Gaining from International Trade
Chapter 28 International Trade and Finance
Comparative Advantage
International Economics By Robert J. Carbaugh 9th Edition
Cost of Economic Non-Cooperation to Consumers in South Asia
Business Possibilities in SAARC
© 2001 South-Western, a division of Thomson Learning
SAARC regional economic Integration
Regional Trade Agreements as Trade Policy Instruments
International Economics By Robert J. Carbaugh 9th Edition
Natural Resources & Trade
International Economy and Globalization
Natural Resources & Trade
Understanding Global Trade Politics
Chapter 7: Global Markets in Action
Tariffs on Chinese Imports: What is the Economic Impact?
5 The United States and the Global Economy.
Copyright eStudy.us 2010 Application: International Trade What determines whether a country imports or exports a good? Who gains.
International Economics
5 The United States and the Global Economy.
The United States in the Global Economy
Natural Resources & Trade
Trading with other Nations
Presentation transcript:

Multi-Fiber Arrangement Expiration: Implications for South Asia Ashe Hate Shisir Khanal John Larsen Paul Smart Romina Soria David Zanni

Background Effective 1974–2005 Set limits on textile imports Limits applied to 47 developing countries Agreement on Textiles and Clothing, 1994 U.S. also reduces tariffs --Founded as a way to protect domestic producers from competition. Expired in 2005 as a result of WTO agreements. -- Example: only 5000 boys shorts from Honduras. 20,000 yards of fine woven bla blah from pakistan. --

Importance of Textile and Apparel Industry India Pakistan Bangladesh Sri Lanka Nepal GDP (PPP) 2003 $3 trillion $311 billion $259 billion $74 billion $38 billion Industry/GDP 4% 9% N/A 7% Industry/Exports 30% 72% 75% 44% 40% Industry/ Labor Force 6% 3% 8% 1% --Here are the important numbers. --Now john will talk, giving something of an literature review on pre-expiration opinion on the effects of expiration for South Asia. -- Paul will give a synthesized view of how things are likely to turn out for the varous countries, -- I will return for Impact on the U.S. and conclusions.

Predictions from Economic Theory For exporting countries Loss of quota rents Reduction of trade inefficiencies For developed countries Decrease in prices Increase in imports Transfer of income from producers to consumers

Expert Opinion and Predictions India, Pakistan, Bangladesh, and Sri Lanka held back by quotas Nepal benefited from high quotas Some benefit from preferential access to U.S. and EU markets Loss of output and employment in Bangladesh Significant job loss in Sri Lanka 36 percent export increase for South and Southeast Asia 87 percent export increase for China

Predictions from the Press Gains for India and Pakistan Mixed predictions for Sri Lanka and Bangladesh Asian press more optimistic than European press Significant losses for Nepal

Summary of Predictions COUNTRY THEORY EXPERTS PRESS India Win Pakistan Sri Lanka Mixed Ambiguous Bangladesh Nepal Lose

Winner: India Leading cotton producer Backward linkages Substantial FDI Outsourcing opportunities Government under reform pressure Lower labor costs than China

Winner: Pakistan Leading cotton producer Backward linkages Substantial FDI Low labor costs Government involvement Product specialization Access to U.S. and EU markets

Loser: Nepal Political instability Small firms Low labor productivity Low product diversity High transportation costs High dependence on U.S. market Lack of government support

Unclear: Bangladesh Advantages Niche market Low labor costs Proactive government and trade associations Recent growth trends Challenges Falling prices Dependence on raw material imports Dependence on FDI Limited access to U.S. market

Unclear: Sri Lanka Advantages Niche market Potential trade arrangements Regional U.S. and EU Tsunami relief Challenges High wages Low productivity Dependence on raw material imports Small firms Lack of peak organizations

Implications for U.S. Restructuring of U.S. retailers Loss of U.S. production and employment Benefit to U.S. consumers

Conclusions Winners: India and Pakistan Loser: Nepal Unclear: Sri Lanka and Bangladesh U.S. benefits overall with some job loss Geo-political considerations?