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	Table of Contents
p. 23 of 77 BACK | NEXT Foreword, Acknowledgments, Contents, Acronyms and Abbreviations, Definitions I. Developing Asia and the World Developing Asia and the Pacific: Performance and Prospects Prospects for the World Economy in 2006-2007 Subregional Summaries Textiles and Clothing in the Post-Quota Era: The Outlook for Asian Suppliers Introduction: An end to quotas? Historical perspective on textiles and clothing in Asian development Recent performance under the ATC and in the (almost) post-quota era Impact of new US restrictions on the PRC's shipments of textiles and clothing Agenda for future trade reform Endnotes and references The Doha Development Agenda: Asian Challenges and Prospects after the Ministerial Meeting in Hong Kong, China II. Economic trends and prospects in developing Asia III. Routes for Asia's Trade Statistical appendix

Asian Development Outlook 2006 : I. Developing Asia and the World : Textiles and Clothing in the Post-Quota Era: The Outlook for Asian Suppliers

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Endnotes

¹ Quantitative limits on Asian exports were first imposed on Japan by the United States in 1957. The United Kingdom followed with restrictions on Hong Kong (1958), and India and Pakistan shortly thereafter (1959). A number of Western European countries insisted upon safeguard clauses prior to accepting Japan's application for membership in the General Agreement on Tariffs and Trade in 1960. See Hayashi (2005). Hayashi presents a detailed timeline, adapted from Spinanger (2000), of the regimes governing world trade in textiles and clothing since these restrictions were first imposed.

² Table 1 in this source gives the precise formula used to calculate the growth of quotas and for the four phases of integration of tariff lines.

³ In the second quarter of 2005, the EU and US began to implement special safeguards on merged categories of clothing imports (that is, categories such as cotton and wool sweaters that include more that one type of fiber) from the PRC. These resulted in comprehensive trade agreements with the PRC that set out quantitative limits on imports in 10 broad categories in the EU and 21 categories in the US over the period 2006—2008 (see below for discussion and more details on the restrictions). Texts of the agreements are available online at http://www.otexa.ita.doc.gov and can also be found at http://europa.eu.int/comm/index_en.htm or www.emergingtextiles.com.

⁴ The "nonmarket" designation means that "dumping margins" used to calculate penalty tariffs can be extremely large, easily pricing PRC products out of the market of the countries that impose such measures.

⁵ Antidumping measures are imposed with more frequency on the PRC than on any other WTO member state (see WTO homepage, at www.wto.org). Most recently, the EU has imposed antidumping duties on leather shoes exported by the PRC and Viet Nam, and is also conducting an investigation into polyester fibers from the PRC (see www.emergingtextiles.com for more details).

⁶ These estimates are for 2000, but USITC also shows that investment (cumulative purchases of machinery for spinning and weaving) has also been larger in Asia over 1999—2001 than in any other region (USITC 2004).

⁷ The Formosa Chemical & Fiber Corporation is an affiliate of Formosa Plastics (the parent) and initially invested in a textile factory with 200,000 spindles in 2001 in an industrial park outside of Ho Chi Minh City and, in anticipation of Viet Nam's WTO accession, it and other textile producers are raising production capacity there in polyester spinning, yarn, and fiber. See www.fibre2fashion.com (25 February 2005).

⁸ Data are for 2003 and are as reported in USITC (2004) and Hayashi (2005). The data are compiled from the United Nations Conference on Trade and Development. Pakistan differs from the small clothing exporters as it has substantial capacity in textiles, both cotton and man-made fiber.

⁹ See www.emergingtextiles.com, "Cambodia apparel exports rise helped by improved working conditions," 31 October 2005.

¹⁰ Hummels estimates that each day added to shipping time is equivalent to a tariff of 0.8%, hence, a 20-day difference is equivalent to the more distant producer paying an additional 16% tariff.

¹¹ A very comprehensive review of these factors in all of the main foreign suppliers (except the PRC) to the US market is USITC (2004). By definition, if a country prospers in the post-quota environment, it has likely to have in place the policies and institutions necessary to compete in the new trading environment for clothing and textiles.

¹² However, given the recent enlargement of the EU to 25 member states, some hiccups in implementing the monitoring program in some of the new members might be anticipated. As a result, there is a 3-month lag in reporting EU imports of textiles and clothing by product and source country.

¹³ Or the adding up of regional content in more than one partner country of different free trade agreements—what is sometimes referred to as "diagonal cumulation" in EU agreements such as Mediterranean rim free trade agreements.

¹⁴ Jordan managed to negotiate a simple "single-transformation" rule of origin for its clothing shipments to the US. As a result, Jordan was the only major preferential supplier with a market share of at least 1% of US clothing imports that actually improved its market share in 2005 relative to 2004. The liberal rule of origin is allowed because Jordan will never threaten to take a big share of US imports given its tiny size and remoteness.

¹⁵ Volume measures differ between the US and EU as the former uses million square meter equivalents and the latter uses weight in hundreds of kilograms. Hence, while both measures allow aggregation, they are not strictly comparable.

¹⁶ These are types of protection that remove concessions on a discriminatory basis but that are allowed under WTO law, such as antidumping measures.

References

Anson, Robin and Guillaume Brocklehurst. 2005. "Trends in World Textile and Clothing Trade." Textile Outlook International. No. 120: 96-149. Manchester: Textiles Intelligence Ltd. November—December.

Far Eastern Economic Review. 2003. "From Riches to Rags: How Free Trade Can Wreck An Economy." 27 November.

Hayashi, Michiko. 2005. Weaving a New World: Realizing Development Gains In A Post-ATC Trading System. New York and Geneva: UNCTAD.

Hummels, David. 2001. "Time as a Trade Barrier." Purdue University, Economics Department. July.

James, William E. 2005. "Outlook for Asian Textile and Clothing Trade in the Post—Quota Era." Textile Outlook International. No. 120: 150-181. Manchester: Textiles Intelligence Ltd. November—December.

James, William E., David J. Ray, and Peter J. Minor. 2003. "Indonesia's Textiles and Apparel: The Challenges Ahead." Bulletin of Indonesian Economic Studies, 39 (1): 93-103. April.

Organisation for Economic Co-operation and Development (OECD). 2004. A New World Map in Textiles and Clothing: Adjusting to Change. Paris.

Spinanger, Dean. 2000. "Faking Liberalization and Finagling Protectionism: The ATC at Its Best." Background Paper for the WTO 2000 Negotiations: Mediterranean Interests and Perspectives, Cairo.

Thee, Kian Wie. 2003. "Export-Oriented Industrialization and Foreign Direct Investment in the ASEAN Countries," in Michiko Missanke (ed.) Asia and Africa in the World Economy. Tokyo: United Nations University. September.

United States International Trade Commission (USITC). 2004. Textiles and Apparel: Assessment of the Competitiveness of Certain Foreign Suppliers to the U.S. Market (2 volumes). Publication 3671. Washington, DC. January. Available: http://www.usitc.gov.

World Trade Organization. 2005. International Trade Statistics 2005. Geneva.

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