Title: Trade liberalisation in T&C: an overview of the welfare effects

Authors: Dimitrios Dadakas, Stelios Katranidis

Addresses: Department of Economics, University of Macedonia, 156 Egnatia Str., Thessaloniki 540-06, Greece. ' Department of Economics, University of Macedonia, 156 Egnatia Str., Thessaloniki 540-06, Greece

Abstract: The objective of this paper is to examine the effects that trade liberalisation in Textiles and Clothing (T&C) had on the welfare of European producers of cotton-yarn. We employ multi-market theory and a single-market approach to examine the price-induced welfare effects in four major European T&C producing countries namely, Greece, Portugal, Spain and Turkey. Results show that the liberalisation of trade had a substantial negative impact on producers| welfare in all four countries. Welfare and sensitivity analysis suggests that, while cotton-yarn price-decreases and labour-cost increases are expected to further dampen producers| welfare, the adoption of new technologies can substantially assist the competitiveness of European products in the world markets.

Keywords: multi-market; single-market approach; applied welfare analysis; bootstrap; T&C; textiles and clothing; trade liberalisation; MFA; multi-fibre agreement; ATC; cotton yarn; garment industry; apparel industry; Greece; Portugal; Spain; Turkey.

DOI: 10.1504/IJTGM.2010.034876

International Journal of Trade and Global Markets, 2010 Vol.3 No.3, pp.247 - 266

Published online: 26 Aug 2010 *

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