Trade in Textiles-Holding the Chinese Juggernaut in Check

Topics: International trade, International Monetary Fund, European Union Pages: 2 (595 words) Published: November 14, 2012
Dennis / Sutardjo

Case :Trade in Textiles-Holding the Chinese Juggernaut In Check.

1. Was the removal of MFA a positive thing for the world economy? Why?

Answer: There were two perspectives to explain the result of removal the Multi-Fiber Agreement. From China perspective, it brings the positive effect to their countries, where they’re not limited their export quota to the other nations by those sanctions. It is also not favorable for the world economy, it might cripple the other nation economies who have less competitive advantage in the manufacture of textile compare to China.

From the others nation perspective, the removal of Multi-Fiber Agreement brings a positive respond to the world economy, especially to the infant developing nations, because it’s opens up the opportunity for their country in creating jobs and gaining the export market, even for the country that never been into the textile industry.

2. As a producer in a developing nation that benefited from the MFA agreement, how should you respond to the expiration of the agreement ?

Answer: To anticipate the expiration of the MFA agreement especially for those favorable country like Bangladesh and the like, in order to preserve their export performance, local textile industry should seek for the endorsement from the government impose the tariff for importing textile from China in order to gain in local market competition. It is also takes a balance approach where the nation also have to engage the WTO not just gaining the allocation of the exporting quota, but also the additional new market opportunity for local textile industry to grow.

3. Do you think China was right to place a tariff on exports of textiles from China? Why? Does such action help or harm the world economy?

Answer: The action to place tariff on their textile export was partly right. Because as the world 2nd largest leading economy, China has to show such a good...
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