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Rags in the High Rent District: the Evolution of Quota Rents in Textiles and Clothing

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  • Joseph Francois
  • Julia Woerz

Abstract

We develop a mixed complementarity programming (MCP) based estimating framework for non-tariff barriers (NTBs) to examine the evolution of market access conditions in the textile and clothing sectors, working with a panel of bilateral trade data on textile and clothing trade, underlying bilateral tariffs, and the country-pair coverage of quotas under the WTO’s Agreement on Textiles and Clothing (ATC). Our estimating framework takes advantage of the panel nature of trade data when calculating export tax equivalents while allowing for inequality constraints on the quota premium estimates. We also introduce Gaussian quadrature for estimating goodness of fit for regression-based NTB measures based on residual fitting.

Suggested Citation

  • Joseph Francois & Julia Woerz, 2006. "Rags in the High Rent District: the Evolution of Quota Rents in Textiles and Clothing," The Institute for International Integration Studies Discussion Paper Series iiisdp121, IIIS.
    • Handle: RePEc:iis:dispap:iiisdp121
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    Cited by:

    1. Mausumi Kar, 2012. "National and Global Aspects of India’s Textiles and Apparel Industry and Trade: An Overview," South Asian Journal of Macroeconomics and Public Finance, , vol. 1(1), pages 81-133, June.
    2. Manchin, Miriam & Pelkmans-Balaoing, Annette O., 2008. "Clothes without an Emperor: Analysis of the preferential tariffs in ASEAN," Journal of Asian Economics, Elsevier, vol. 19(3), pages 213-223, June.
    3. Peter Nedergaard, 2009. "European Union Import Quotas on Chinese Textile and Clothing Exports in 2005: A Panic-Driven Commission or Rational Explanations?," Journal of Industry, Competition and Trade, Springer, vol. 9(1), pages 17-47, March.
    4. Irene Brambilla & Amit K. Khandelwal & Peter K. Schott, 2010. "China's Experience under the Multi-Fiber Arrangement (MFA) and the Agreement on Textiles and Clothing (ATC)," NBER Chapters, in: China's Growing Role in World Trade, pages 345-387, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    NTB estimation; Gaussian Quadrature; import quotas; ATC; MFA;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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