The Agreement on Textiles
and Clothing (ATC) deals with the progressive opening of these markets in
high-income countries. This process should be finished by the year 2005,
when the whole sector should be under the WTO rules. The scope of the liberalization,
implemented up to now, has been limited. In the 90's the Latin American
(LA) countries have liberalized their economies, which has been followed
by a significant increase in their imports. This paper aims to disentangle
the effect on Latin America of the delay in implementing the ATC. Specifically,
it tries to find out to what extent the increase in LA imports has exposed
the local producers to greater competition from foreign goods than it would
be the case if the liberalization had been carried out at the same time
by both sides. A General Equilibrium Multi-country Trade Model (GTAP) is
used to simulate the elimination of trade barriers. |
Abstract |