The Expiration of the Multi-Fiber Arrangement: an Analysis of the Consequences for South Asia

Topics: Sri Lanka, India, International trade Pages: 43 (14449 words) Published: May 14, 2012
The Expiration of the Multi-Fiber Arrangement: An Analysis of the Consequences for South Asia Ashe Haté Shisir Khanal John Larsen Paul Smart Romina Soria David Zanni Prepared for a select group of U.S. government agencies interested in issues of trade and South Asia

Public Affairs 860: Public Affairs Workshop, International Issues Spring 2005

Robert M. La Follette School of Public Affairs University of Wisconsin-Madison

©2005 Board of Regents of the University of Wisconsin System All rights reserved. For additional copies: Publications Office La Follette School of Public Affairs 1225 Observatory Drive Madison, WI 53706 www.lafollette.wisc.edu publications@lafollette.wisc.edu The Robert M. La Follette School of Public Affairs is a nonpartisan teaching and research department of the University of Wisconsin– Madison. The school takes no stand on policy issues; opinions expressed in these pages reflect the views of the authors.

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Table of Contents
Foreword ................................................................................................................. v Acknowledgments.................................................................................................. vi Executive Summary .............................................................................................. vii 1. Introduction......................................................................................................... 1 2. Pre-Expiration Predictions .................................................................................. 4 2.1 Predictions Using Economic Theory: A Simple Quota Model................... 4 2.2 Expert Opinion on the Consequences of a Quota Regime Expiration....... 5 2.3 What is Happening, and What is Likely to Happen According to the Popular Press................................................................... 8 2.3.1 India and Pakistan .............................................................................. 8 2.3.2 China ................................................................................................ 11 2.3.3 Sri Lanka and Bangladesh ............................................................... 12 2.3.4 Nepal ................................................................................................ 14 2.4 Main Expectations and Predictions........................................................... 15 3. Country Analysis .............................................................................................. 17 3.1 Winners: India and Pakistan ..................................................................... 17 3.1.1 India ................................................................................................. 17 3.1.2 Pakistan ............................................................................................ 20 3.2 Loser: Nepal.............................................................................................. 22 3.2.1 Lack of Technological Progress and Low Productivity................... 23 3.2.2 Arduous Geographical Terrain ........................................................ 23 3.2.3 Reliance on Single Market............................................................... 23 3.2.4 Political Situation............................................................................. 23 3.3 Ambiguous: Bangladesh and Sri Lanka.................................................... 24 3.3.1 Bangladesh....................................................................................... 24 3.3.2 Sri Lanka.......................................................................................... 26 4. Impact on the United States .............................................................................. 28 4.1 General Impact: Restructuring of U.S. Retailers ...................................... 28 4.1.1 Loss of U.S. Production ................................................................... 28 4.1.2 Benefits to U.S....

Cited: Melanie Frances Manion Associate Director, La Follette School of Public Affairs Professor of Political Science and Public Affairs May 10, 2005
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General Statistics by Country India
Gross domestic product (purchasing power parity), 2004 estimate Trade as percentage of gross domestic product, 2004 Foreign direct investment net inflows (balance of payments, current U.S
$15 million
4% 9.2% (2004) Stable
3%* 8.3% (2004) Stable
6% 40%** (2003) Stable
6% 7.8% (2004) Stable
6% 47% (2001) Unstable
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