Quotas on Textiles and Clothing - A Review

Seminar paper from the year 2006 in the subject Business economics - Economic Policy, grade: 1,3, Berlin School of Economics, language: English, abstract: Textile and clothing manufacture and trade have been crucial elements to international economic activity and growth for about two centuries. This labour intensive industry requires relatively low skilled workers and little fixed capital to establish production facilities. In consequence, the textile and clothing industry was one of the main sectors of economic growth at the beginning of the Industrial Revolution in developed countries and is of particular significance for developing countries at present. The objective of this paper is to outline the case of quotas on the import of textiles and clothing and to contribute to the ongoing debate by assessing the issue from different perspectives. An overview about the textile and clothing sector in the 2nd chapter will clarify its structure, characteristics and recent patterns in international trade. On this background, chapter 3 will identify reasons for the implementation of the quotas and outline their historic emergence from the 1950s to the ATC, followed by a critical evaluation of their impacts. The 4th chapter will assess anticipated and actual post ATC-effects on both developed and developing countries. Special attention will be paid to the particular case of China. Furthermore, chapter 4 will describe the respective reactions of various interest groups, and outline the recently reinstalled safeguard measures of both the EU and the USA. Chapter 5 will come forward with some observations and suggestions as regards possibilities to cope with the intense competition for producers of textiles and clothing in both industrialised and developing countries. Chapter 6 will close this paper with a final conclusion.