Greenspan on Seattle

Michael Pollak mpollak at
Wed Jan 19 00:29:29 PST 2000

Doug Henwood wrote:

> let's look at the macro results: it's hard to find an item of clothing
> in the U.S. that isn't imported, and it's hard to argue that U.S.
> markets in general are closed.


> Tariffs are trivial in most countries for most commodities; which ones
> are you talking about? And as for nontariff barriers, it's really hard
> to believe they have that much of a macro effect, given that trade has
> been growing faster than world incomes for the last 50 years.

Isn't the question here not one of tariffs so much as one of quotas?

John Whalley [] has an interesting article (in Adobe format) where it seems to me he suggests that while apparel imports have grown enormously in recent years to the US and the EU, the bulk of those imports have come from countries in special positions. To the US the bulk has come from countries covered under regional agreements: from Mexico under NAFTA, and from Caribbean countries under the Caribbean Initiative. To the EU, they come from former-communist countries protected under similar agreements. Both sets of importers thus have semi-protected markets at the expense of the mass of third world countries that have not been taken under these protective wings, and which, while they do send us products, are each limitd in how much they can send us under the quotas of the long-standing Multi Fibre Agreement -- which seems to lend at least some support to Rakesh's contention. It's possible for there to be a rainbow of countries represented in the Gap and for most of them to be constrained under quotas at the same time. (It might even encourage diversity, no? Since multinationals would increase their permitted imports by spreading out their investment?)

Least Developed Countries, like Bangladesh, don't have quotas, so they can be well represented in Old Navy. But for China and India, the new third world powerhouses, apparel and textile quotas are a huge issue, no? Wasn't that the key issue on our side in our bilateral pre-WTO negotiations just end with China -- that we refused for 12 years to open up our apparel markets to them unless they opened up everything else to us? According to Whalley, China is now responsible for 60% of the world's apparel exports, with India coming in second. As long as they are out of the WTO, it's legal to discriminate against them. Once they're in, everyone else is in trouble.

My question is, though, if all our apparel in the US is imported nowadays -- if there is no (legal) domestic industry to protect anymore -- why did we fight so hard to constrain China? It seems like it was just a bargaining chip -- exactly the sort of competition Rakesh is talking about.

BTW, Whalley's notes in passing that in the 1960's, 60% of the world's apparel and textile imports came from the Asian tigers. It was a trade that also made up 50% of their exports at the time. The Multifibre Agreement seems to have been instituted just as they were transitioning to more capital intensive exports -- and just in time to prevent anyone else from following same path.


__________________________________________________________________________ Michael Pollak................New York City..............mpollak at

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