Discussion Paper Details

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Title: A Primer on the MFA Maze

Author(s): Jaime de Melo and Riccardo Faini

Publication Date: September 1992

Keyword(s): Allocative Efficiency, Multi-Fiber Agreements and Quotas

Programme Area(s): International Trade and Regional Economics

Abstract: The paper identifies the potential sources of allocative inefficiency generated by the Multi-Fiber Agreements (MFA) and examines the evidence for such inefficiencies. Five sources of inefficiency are identified relating to inefficient allocations across countries, across consumers, and among firms within constrained countries. Evidence is first provided from trends in import shares for aggregate categories of textiles and clothing before and during the MFA. Second, evidence is provided from a detailed examination of quota utilization rates and price differentials among EC importing countries.

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Bibliographic Reference

de Melo, J and Faini, R. 1992. 'A Primer on the MFA Maze'. London, Centre for Economic Policy Research.