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    CLOSING CASE Trade in Textiles

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    Haseeb KhAn NiAzi
    The removal of the Multi-Fiber Agreement (MFA) was detrimental to the textile industries of developed nations. Without quotas on textile imports, China was able to dominate world trade in the textile industry due to its low costs of production and large productive capacity. For developing textile producers like Bangladesh that benefited from the MFA, responding to its expiration would require lobbying their governments to impose tariffs on Chinese imports to gain a competitive advantage in their domestic markets. While China placed modest tariffs on its own textile exports, this was seen as more of a token gesture that did little to address the distortions caused by China's dominance and actually harmed the world economy by raising prices for importers. The 2005

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    CLOSING CASE Trade in Textiles

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    Haseeb KhAn NiAzi
    408 views4 pages
    The removal of the Multi-Fiber Agreement (MFA) was detrimental to the textile industries of developed nations. Without quotas on textile imports, China was able to dominate world trade in the textile industry due to its low costs of production and large productive capacity. For developing textile producers like Bangladesh that benefited from the MFA, responding to its expiration would require lobbying their governments to impose tariffs on Chinese imports to gain a competitive advantage in their domestic markets. While China placed modest tariffs on its own textile exports, this was seen as more of a token gesture that did little to address the distortions caused by China's dominance and actually harmed the world economy by raising prices for importers. The 2005

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    The removal of the Multi-Fiber Agreement (MFA) was detrimental to the textile industries of developed nations. Without quotas on textile imports, China was able to dominate world trade in the textile industry due to its low costs of production and large productive capacity. For developing textile producers like Bangladesh that benefited from the MFA, responding to its expiration would require lobbying their governments to impose tariffs on Chinese imports to gain a competitive advantage in their domestic markets. While China placed modest tariffs on its own textile exports, this was seen as more of a token gesture that did little to address the distortions caused by China's dominance and actually harmed the world economy by raising prices for importers. The 2005

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    408 views4 pages

    CLOSING CASE Trade in Textiles

    Uploaded by

    Haseeb KhAn NiAzi
    The removal of the Multi-Fiber Agreement (MFA) was detrimental to the textile industries of developed nations. Without quotas on textile imports, China was able to dominate world trade in the textile industry due to its low costs of production and large productive capacity. For developing textile producers like Bangladesh that benefited from the MFA, responding to its expiration would require lobbying their governments to impose tariffs on Chinese imports to gain a competitive advantage in their domestic markets. While China placed modest tariffs on its own textile exports, this was seen as more of a token gesture that did little to address the distortions caused by China's dominance and actually harmed the world economy by raising prices for importers. The 2005

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    CLOSING CASE Trade in Textiles—Holding the Chinese

    Juggernaut in Check

    Case Discussion Questions

    1. Was the removal of the Multi-Fiber Agreement a positive thing for the world
    economy? Why?

    The removal of Multi- Fiber Agreement was not a positive thing. Wherefore -Country
    such as mainland China will control the industriousness due to the comparative
    advantage, low wage, and productive represent force, economies of scale, good
    infrastructure, reliable delivery and commitments as compared to other countries bid
    Bangladesh. (Although countries like India and Bangladesh can offer low wage) -With
    the expiration of MFA (elimination of pot quotas), it brings countries to a more open
    work economy; squinch concern barriers. However, it results in trade distortion
    practices in few dominant countries, hurting domestic producers. The allowance for
    expiration of MFA was to liberalize trade for nations but it seems likewise. Instead, it
    created a domination of world trade in textile by countries which are able to trade at
    visit cost, which was detrimental to the domestic trade industry of more developed
    country.

    2. As a producer in a developing nation such as Bangladesh that benefited from


    the MFA agreement, how should you respond to the expiration of the
    agreement?

    Textile producing nations signed the Istanbul declaration in 2004


    Many developing countries fear that they will lose substantial market share to China
    Other developing nations think that they might benefit from the removal of the MFA
    In the US, textile producers lobbied the government to impose quotas on Chinese
    imports after the MFA expired
    The US and other major trading nations reserved the right to impose annual quotas on
    Chinese textile imports
    What kind of trade barrier was erected by the November 2005 agreement between
    China and the US?
    Muti-fiber-agreement
    Quotas restrained
    Upswing in textile exports
    WTO was created in 1995
    The expiration of the Muti-Fiber-Agreement
    China joined WTO in 2001
    Chinese textile export exploded in growth
    To anticipate the expiration of the MFA agreement especially for those favorable
    country like Bangladesh and the like, in order to preserve their export performance,
    local textile industry should seek for the endorsement from the government impose
    the tariff for importing textile from China in order to gain in local market competition.
    It is also takes a balance approach where the nation also have to engage the WTO not
    just gaining the allocation of the exporting quota, but also the additional new market
    opportunity for local textile industry to grow.

    3. Do you think China was right to place a tariff on exports of textiles from
    China? Why? Does such action help or harm the world economy?

    China tried to head off protectionist pressures in December 2004 by announcing it


    would impose a tariff on textile exports. By raising the costs of Chinese textiles, the
    tariff was designed to reduce overseas demand. However, the tariffs are modest,
    ranging from 2.4 to 6 cents per item, with most at the low end of the range. Many
    observers see them as little more than a token gesture. We feel as if by placing tariffs
    on exports of textiles from China it is actually hurting the world economy. The tariff
    might not be too much but China will still produce and export the same amount,
    whether the tariffs are there or not, therefore, when they export, the price will be
    higher for the importers of textiles from China. This is going to hurt the economies of
    different countries.

    4. Whose interests were served by the November 2005 agreement between the
    United States and China to limit the growth of Chinese textile imports into the
    United States? Do you think the agreement was a good one for the United States?

    The United States and China have reportedly reached a tentative agreement on
    imported Chinese textiles in November 2005. Negotiators have agreed to allow US
    imports of Chinese textile and apparel products to increase up to 10 percent in 2006
    and 16 percent in 2007. Comprehensive agreement on Chinese exports that compete
    with US made clothing and textiles. The issue flared because of a surge in Chinese
    exports to the US after textile quotas were lifted at the start of the year.
    5. What kind of trade barrier was erected by the November 2005 agreement
    between China and the United States?

    2005, the U.S. textile imports from China entered into bilateral negotiations as
    prescribed limit by 2008, imports from China, which imports 15 percent of the
    maximum amount prescribed by the conclusion was determined. The elimination of
    the last set of quotas of the Agreement on Textiles and Clothing (ATC) on January 1,
    2005, ostensibly brought about the end of decades of quantitative restrictions on the
    international exchange of clothing and textiles.
    ASSIGNMENT

    Globalization Business Management

    Muhammad Haseeb Khan

    SP17-BBA-119

    15-11-2019

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