MFA effects on the world trade of textiles. Analysis of chinese exports to USA and EU (1995-2017)

Abstract

The opening of markets along with new technological advances has accelerated the process of globalization in recent decades. These changes have changed the structure of the textile industry. This document analyzes European and US textile imports from China from 1995 to 2017 in which the agreement on textiles and clothing (ATC) is applied. To do this we perform the estimation of a gravity model with panel data in which some of the most determinant factors of textile trade are included. The results support the theory previously described by other authors and also provide empirical evidence that the elimination of the quotas of the Multifibre Arrangement has led to changes in the global structure of production in the textile sector.