Working Paper: CEPR ID: DP5477
Authors: Joseph Francois; Julia Wrz
Abstract: We develop a mixed complementarity programming (MCP) based estimating framework for non-tariff barriers (NTBs) to examine the evolution of market access conditions in the textile and clothing sectors, working with a panel of bilateral trade data on textile and clothing trade, underlying bilateral tariffs, and the country-pair coverage of quotas under the WTO's Agreement on Textiles and Clothing (ATC). Our estimating framework takes advantage of the panel nature of trade data when calculating export tax equivalents while allowing for inequality constraints on the quota premium estimates. We also introduce Gaussian quadrature for estimating goodness of fit for regression-based NTB measures based on residual fitting.
Keywords: ATC; Gaussian Quadrature; Import Quotas; MFA; NTB Estimation
JEL Codes: C15; F13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| binding quotas (D45) | economic rents (D33) |
| binding quotas (D45) | price markup (D49) |
| binding quotas (D45) | implicit tax on exports (F14) |
| phase-out of quotas under ATC (F15) | reimposition of quotas in 2005 (F13) |
| quota graduation process (C32) | expected liberalization (P27) |
| significant increase in ETEs for China (F69) | reimposition of quotas (L42) |
| quotas (C80) | decrease in quota rents over time (Q31) |
| political pressures from surges in imports from China (F69) | reimposition of quotas (L42) |