Working Paper: NBER ID: w21299
Authors: Daqing Yao; John Whalley
Abstract: In this paper we assess the effects of the MFA/ATC using both world trade and US data after its removal. Previous literature assesses its effects while in operation. The trade data we analyze are consistent with theoretical predictions of more trade volumes, lower product prices, smaller effect of RTA on trade, less transshipment and quota hopping investment, and higher country concentration of exporters. We also find the effects of the MFA on clothing trade were more significant than for textiles trade. The benefits from freer trade in textiles and clothing shed light on other sectors that are still under trade protection.
Keywords: No keywords provided
JEL Codes: F13; F14; F68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| MFA quotas (F16) | Reduced Trade Volume (F19) |
| MFA quotas (F16) | Higher Prices for Restricted Products (D49) |
| MFA quotas (F16) | Quality Upgrading (L15) |
| MFA quotas (F16) | Transshipment and Quota Hopping (L91) |
| Quota Hopping (R28) | Foreign Investment (F21) |
| Internal Quota Allocation Schemes (D45) | Negative Effects on Economic Performance (F69) |
| Removal of MFA (Y50) | Trade Volume Increase (F19) |
| Removal of MFA (Y50) | Price Decrease (D49) |
| Removal of MFA (Y50) | Quality Reduction (L15) |
| Removal of MFA (Y50) | Increased Export Concentration (F14) |
| Quota Hopping (R28) | Changes in Import Concentration (F14) |
| Removal of MFA (Y50) | Regional Trade Dynamics (F14) |