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Dean Spinanger, Institute of World Economics Kiel, Germany

BEYOND ETERNITY: WHAT WHEN ATC GIVES WAY TO MFN AFTER 2004?. Dean Spinanger, Institute of World Economics Kiel, Germany. Scope and Thrust of Study. I. Introduction and Overview II. Liberalizing the ATC: Where Are We?

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Dean Spinanger, Institute of World Economics Kiel, Germany

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  1. BEYOND ETERNITY: WHAT WHEN ATC GIVES WAY TO MFN AFTER 2004? Dean Spinanger, Institute of World Economics Kiel, Germany

  2. Scope and Thrust of Study I. Introduction and Overview II. Liberalizing the ATC: Where Are We? III. What Might the World Look Like >2004? IV. How Did Poorer Countries Fare? Bangladesh et al V. Summary and Conclusions

  3. I. Introduction and Overview • ATC no small accomplishment in UR • Will it be fulfilled by 31/12/2004? • If so, long live MFN!! • But what if not? • What are the issues?

  4. The ATC: Where Are We Now? • Liberalization has so far been a farce • By end of 2004, the final tranche will contain mainly sensitive products. • It‘s faking liberalization and finagling protection. • Of course, the guidelines were not precise. • But motto was: Manaña is better than now.

  5. Clothing Exports to World: 1990-94 and 1994-98(%)

  6. The World after Eternity • Not a simple extrapolation. • Not a crystal ball approach. • Cutting-edge CGE technology • We kept our eye on the road......did not allow us to be distracted by.....irrelevant issues as others have done..........>>>>>>>

  7. The GTAP4 Model • General equilibrium: multi-sector, with linkages through intermediate inputs and factor markets; • Calibrated : the model is “bench-marked” to baseline scenario; • Data: social accounting data (i.e. social accounting matrix) based on the GTAP; • Policy data: include tariffs and quotas from GTAP, the WTO and own calculations.

  8. Sectors and Regions • 9 Sectors, including specifically textile and clothing; • 24 countries/regions, including all major Asian producers (PRC, HKG, TAI, KOR, JAP, VNM, THA, MAL, PHI, SIN, INO, INA, SRI, Rest S. Asia), ANZ, CND, USA, MEX, W. Europe, C. Europe + CIS, TUR, Rest L. America, Africa/M. East, ROW.

  9. Scenarios A: UR tariff reductions ex. T&C & PRC. B. UR T&C tariff reductions ex. PRC. C. UR T&C quota elimination. D. UR tariff reductions for PRC ex. T&C. E. UR T&C tariff reductions for PRC. F. UR T&C quota elimination for PRC. G. Total UR impact incl. PRC. H. Additional competitive advantage for PRC (10%). I. Total effect

  10. Competitive 10% Plus for PRC • China‘s opening up reveals greater potential than expressed in relative price changes. • Based on personal interviews of CEOs of major T&C producers/traders in Hong Kong. • Conclusions drawn from various questions re. corp. policies after PRC‘s WTO entry.

  11. % „C“ Exports by Scenario Country C F G I PRC -5.3 45.8 27.0 121.7 HKG 22.6 - 8.6 8.9 2.8 INA 112.2 -11.3 108.7 97.0 MEX -25.6 -8.4 -33.7 -44.6 TUR -5.2 -3.6 -10.7 -17.0 CEA -5.7 -4.0 -12.9 -21.2

  12. 1965 1985 1994 2005 Hong Kong 8.2% 12.8% 7.5% 6.9% China 6.5% 13.2% 23.4% 36.3% All Asian Countries 17.1% 59.0% 65.7% 81.9% Textiles and Clothing Exports from Hong Kong, China and All Asian Countries in Total T&C Exports from Non-Industrial Countries (%).

  13. Sweden's Clothing (SITC 84) Imports from Selected Regions in % of (NON-OECD+P;GR;SP) Clothing Imports, 1980-1999 - Moving 3-year 

  14. Sweden's Clothing (SITC 84) Imports from Selected Regions in % of (NON-OECD+P;GR;SP) Clothing Imports, 1980-1999 - Moving 3-year 

  15. Clothing Imports of Germany and France from 5 South Asian Countries in % of NON-OECD Clothing Imports, 1990-1998Germany France

  16. Clothing Imports of Italy and Sweden from 5 South Asian Countries in % of NON-OECD Clothing Imports, 1990-1998Italy Sweden

  17. Clothing Imports of UK and USA from 5 South Asian Countries in % 0f NON-OECD Clothing Imports, 1990-1998United Kingdom USA

  18. Diagram 5 — Diagram 5 — Average Score () and Coefficient of Variation (CoV) on Ratings of Questions Re. Production and Investment for 14 Hong Kong T&C Companies

  19. Ranking of Factors Influencing Investment/Production Decisions Ø CoV 1 Availability of quotas in host country 9.15 10.78 2 Politics and stability in host country 8.93 14.87 3 Transport infrastructure quality in host country 8.21 14.47 4 Telecom infrastructure quality in host country 8.00 19.61 5 International trade and investment policies 7.71 28.50 6 Labor costs 7.54 25.82 7 Education and training of workers 7.36 26.98 8 Policies affecting labor, health and environment 7.18 33.19 9 Potential for exports to USA 7.07 45.90 10 Lack of restrictions on capital/profit transactions 6.93 34.65 11 Potential new customers/new markets 6.46 47.96 12 The "culture" of host country 6.39 40.49 13 Potential for exports to EU 5.96 32.63 14 Host government tax policies/incentives 5.85 41.81 15 Availability of ready-made factory units 5.05 52.90 16 Potential for exports to region 4.18 58.17

  20. THE END • ANY QUESTIONS; COMMENTS, ETC?? • THANKS FOR STAYING AWAKE!!

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