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Philippine Garments in the Post-MFA Era: Seeking Protection via Free Trade?

Author

Listed:
  • Rene Ofreneo

    (University of Philippines, Diliman)

Abstract

The Philippine garments industry grew rapidly under the quota system of the MultiFiber Agreement (MFA). However, in the post-MFA environment, the industry has been shrinking continuously. One solution being pursued by the government is the development of a bilateral sector-focused free-trade between the United States and the Philippines. This means the assembly of duty-free American-made textiles in the Philippines and their re-export, also duty free, as Philippine garments destined to the American market. The author argues that this proposed arrangement is not necessarily a solution to the Philippine garments crisis given the realities in the global garments market and the weaknesses of the Philippine garments industry. The author concludes that the absence of a strategic industrial policy supportive of an integrated program of industrial development and upgrading is what contributed to the earlier collapse of the Philippine textile industry. This is also the main reason for the present crisis of the country’s garments industry.

Suggested Citation

  • Rene Ofreneo, 2012. "Philippine Garments in the Post-MFA Era: Seeking Protection via Free Trade?," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(3), pages 83-102, October.
    • Handle: RePEc:umk:journl:v:4:y:2012:i:3:p:83-102
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    References listed on IDEAS

    as
    1. Günseli Berik, 2009. "Labour Standards," Chapters, in: Jan Peil & Irene van Staveren (ed.), Handbook of Economics and Ethics, chapter 41, Edward Elgar Publishing.
    2. Gereffi, Gary & Frederick, Stacey, 2010. "The global apparel value chain, trade and the crisis : challenges and opportunities for developing countries," Policy Research Working Paper Series 5281, The World Bank.
    3. Yana van der Meulen Rodgers & Gunseli Berik, 2006. "Asia's Race to Capture Post-MFA Markets: A Snapshot of Labor Standards, Compliance, and Impacts on Competitiveness," Working Paper Series, Department of Economics, University of Utah 2006_02, University of Utah, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    industrial policy; Philippines; post-MFA; save our industries act;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment

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