BEYOND ETERNITY: WHAT WHEN ATC GIVES WAY TO MFN AFTER 2004

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BEYOND ETERNITY WHAT WHEN ATC
GIVES WAY TO MFN AFTER 2004?

• Dean Spinanger,
• Institute of World Economics
• Kiel, Germany

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Scope and Thrust of Study

• I. Introduction and Overview
• II. Liberalizing the ATC Where Are We?
• III. What Might the World Look Like gt2004?
• IV. How Did Poorer Countries Fare?
• Bangladesh et al
• V. Summary and Conclusions

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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?

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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.
• Its faking liberalization and finagling
  protection.
• Of course, the guidelines were not precise.
• But motto was Manaña is better than now.

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Clothing Exports to World 1990-94 and
1994-98(?)
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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..........gtgtgtgtgtgtgt

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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.

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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.

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Scenarios

• A UR tariff reductions ex. TC PRC.
• B. UR TC tariff reductions ex. PRC.
• C. UR TC quota elimination.
• D. UR tariff reductions for PRC ex. TC.
• E. UR TC tariff reductions for PRC.
• F. UR TC quota elimination for PRC.
• G. Total UR impact incl. PRC.
• H. Additional competitive advantage for PRC
  (10).
• I. Total effect

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Competitive 10 Plus for PRC

• Chinas opening up reveals greater potential than
  expressed in relative price changes.
• Based on personal interviews of CEOs of major TC
  producers/traders in Hong Kong.
• Conclusions drawn from various questions re.
  corp. policies after PRCs WTO entry.

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? 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

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Textiles and Clothing Exports from Hong Kong,
China and All Asian Countries in Total TC
Exports from Non-Industrial Countries ().
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Sweden's Clothing (SITC 84) Imports from Selected
Regions in of (NON-OECDPGRSP) Clothing
Imports, 1980-1999 - Moving 3-year ?
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Sweden's Clothing (SITC 84) Imports from Selected
Regions in of (NON-OECDPGRSP) Clothing
Imports, 1980-1999 - Moving 3-year ?
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Clothing Imports of Germany and France from 5
South Asian Countries in of NON-OECD Clothing
Imports, 1990-1998Germany France
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Clothing Imports of Italy and Sweden from 5 South
Asian Countries in of NON-OECD Clothing
Imports, 1990-1998Italy Sweden
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Clothing Imports of UK and USA from 5 South Asian
Countries in 0f NON-OECD Clothing Imports,
1990-1998United Kingdom USA

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Diagram 5 Average Score (?) and Coefficient of
Variation (CoV) on Ratings of Questions Re.
Production and Investment for 14 Hong Kong TC
Companies
Diagram 5
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Ranking of Factors Influencing Investment/Producti
on 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 47.9
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• 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
•  

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THE END

• ANY QUESTIONS COMMENTS, ETC??
• THANKS FOR STAYING AWAKE!!