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The restrictiveness of the multi-fibre arrangement on Eastern European trade

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  • Erzan, Refik
  • Holmes, Christopher

Abstract

Historically, Eastern Europe has not been favorably treated in terms of quota growth in the European Community and U.S. markets - often quite the contrary. But the EC and U.S. treatment of these countries has already changed since their reform and can be expected to become even more favorable. Eastern Europe's exports of textiles and clothing have tended to be more capital-intensive and less specialized than those of other major suppliers, including Asia's newly industrialized economies. Erzan and Holmes argue that Eastern Europe's expansion of relatively labor-intensive products has probably been inhibited byquotas and by the weak adjustment mechanisms inherent in a centrally planned economic system. If so, given market reforms in Eastern Europe, exports of labor-intensive textiles and clothing should expand more than proportionately and the degree of specialization should increase if the Multi-Fibre Arrangement is abolished or its grip on Eastern Europe's exports is relaxed in the EC. Putting aside questions of the composition of exports, textile and clothing exports are to expand considerably because they make up a large part of labor-intensive manufacturers, where Eastern Europe's comparative advantage lies in the near future.

Suggested Citation

  • Erzan, Refik & Holmes, Christopher, 1992. "The restrictiveness of the multi-fibre arrangement on Eastern European trade," Policy Research Working Paper Series 860, The World Bank.
    • Handle: RePEc:wbk:wbrwps:860
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    References listed on IDEAS

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    Cited by:

    1. Patricia S. Pollard, 1994. "Trade between the United States and Eastern Europe," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 25-46.
    2. Seema Narayan & Tri Tung Nguyen & Xuan-Hoa Nghiem, 2021. "Does Economic Integration Increase Female Labour Force Participation? Labour Force Participation?," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 24(1), pages 1-34, March.

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