TY  - JOUR
AU  - Evans,Carolyn L.
AU  - Harrigan,James
TI  - Tight Clothing: How the MFA Affects Asian Apparel Exports
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10250
PY  - 2004
Y2  - January 2004
UR  - http://www.nber.org/papers/w10250
L1  - http://www.nber.org/papers/w10250.pdf
N1  - Author contact info:
James Harrigan
Department of Economics
University of Virginia
P.O. Box 400182
Charlottesville, VA 22904-4182
Tel: 434-243-8354
Fax: 434-982-2904
E-Mail: harrigan@nber.org
AB  - International trade in apparel and textiles is regulated by a system of bilateral tariffs and quotas known as the Multifiber Arrangement or MFA.  Using a time series of detailed product-level data from the United States on the quotas and tariffs that comprise the MFA, we analyze how the MFA affects the sources and prices of US apparel imports, with a particular focus on the effects on East Asian exporters during the 1990s.  We show that while a large fraction of US apparel is imported under binding quotas, there are many quotas that remain unfilled.  We also show that binding quotas substantially raise import prices, suggesting both quality upgrading and rent capture by exporters.  In contrast, tariffs reduce import prices.  Lastly, we argue that the substantial shift of US apparel imports away from Asia in favor of Mexico and the Caribbean during the 1990s is only partly due to discriminatory trade policy: the other reason is an increasing demand for timely delivery that gives a competitive advantage to nearby exporters.
ER  -