2012年-CEPS欧洲政策研究中心_Trade_Adjustments_following_the_Removal_of_Textile_and_Clothing_Quotas_30页_734kb

Summary of "Trade Adjustments following the Removal of Textile and Clothing Quotas"

Core Content

This paper discusses the impact of the removal of textile and clothing quotas under the WTO Agreement on Textiles and Clothing (ATC), which ended on 1 January 2005. It focuses on the EU's role as a major producer and consumer of these goods and analyses the economic and trade adjustments that followed the abolition of the quota system.

Main Points

1. Background of the ATC

• The ATC was established as part of the Uruguay Round to phase out quotas over four stages, starting in 1995 and ending in 2004.
• The EU, along with other industrialized countries, had previously used quotas to protect domestic industries, which were in violation of GATT principles of non-discrimination.
• The removal of quotas was expected to lead to significant changes in global production and trade patterns.

2. The Textile and Clothing Production Chain

• The textile and clothing industries are distinct but interconnected, forming a long supply chain.
• Textile production is capital-intensive and increasingly automated, while clothing production is labor-intensive and less responsive to technological change.
• The industry is segmented, with different countries specializing in different stages based on their factor endowments (capital vs. labor).

3. Quota Effects and Restrictiveness

• In 2004, the EU applied quotas to 14 WTO member countries, with 61 quotas being binding (19 strongly binding).
• The most affected countries were China, India, and Pakistan, where over 60% of quotas were binding.
• Quotas had a greater restrictive impact on clothing than on textiles, as evidenced by the higher number of binding quotas and the greater share of imports from restricted countries in clothing categories.

4. Trade and Price Adjustments

• The removal of quotas led to large and instantaneous changes in import volumes and prices.
• Import volumes increased significantly more than their value, due to falling prices.
• These changes were a natural adjustment to the new trade regime, not an abrupt disruption.

5. Safeguard Measures

• The paper argues that safeguard measures were not justified, as the sharp increase in imports was a predictable outcome of quota removal.
• The shock of quota removal was largely absorbed by other countries, reducing the need for protective measures.

6. Distributional Consequences

• The removal of quotas will lead to a new global trade and production pattern, with a shift in specialization and trade flows.
• Consumers are expected to benefit from lower prices and increased product variety.
• The EU's textile and clothing industries, particularly in Southern Europe, are more affected due to their higher reliance on clothing production.

7. Scale Factors

• The paper highlights the importance of scale factors in determining the magnitude of trade adjustments.
• These factors include the degree of specialization, trade integration, and the relative size of industries in different countries.

8. Conclusion

• The 10-year transition period should have been used more effectively to prepare for the changes.
• The removal of quotas is a natural process that will lead to a more efficient and integrated global market.
• The EU's textile and clothing industries are likely to experience both challenges and opportunities in the new trade environment.

Key Information

• Quota Removal Date: 1 January 2005.
• EU's Role: As a major producer and consumer, the EU was significantly impacted by the removal of quotas.
• Binding Quotas: 61 quotas were binding in 2004, with 19 being strongly binding.
• Most Affected Countries: China, India, and Pakistan.
• Trade Deficit: The EU had a clothing trade deficit of €28 billion in 2002.
• Import Shares: In 2002, 23% of the value of products in the listed categories was restricted.
• Safeguard Measures: Not justified due to the natural and expected adjustment process.
• Consumer Benefits: Lower prices and increased product variety are expected.
• Regional Integration: The EU's textile and clothing trade is increasingly integrated with Eastern European countries.

Structure

• Introduction: Overview of the ATC and its implications.
• Textile and Clothing Production Chain: Description of the industry's structure and characteristics.
• EU's Textile and Clothing Industry: Analysis of production, employment, and trade trends.
• Quotas and Their Effects: Examination of how quotas worked and their impact on trade.
• Distributional Consequences: Discussion of how the removal of quotas affects trade and production patterns.
• Scale Factors: Factors that influence the magnitude of trade adjustments.
• Conclusion: Summary of the expected outcomes and recommendations for better preparation.