Clothing's big bang: the impact of the end of the ATC on developing country clothing suppliers

Abstract

Purpose

Prior to the liberalisation of the clothing and textiles sector under the Agreement on Textiles and Clothing (ATC) fears had been expressed about the potential impact on developing country suppliers. This paper seeks to establish the actual impact of the liberalisation of the EU and US clothing markets.

Design/methodology/approach

Comparison of trade figures pre and post liberalisation.

Findings

The paper finds that, as forecast, significant changes occurred in sourcing patterns in the EU almost overnight. The big winners were India and China. Almost all other developing countries lost market share, although often not as much as had been feared. The impact of the liberalisation was mitigated somewhat by the new quantitative restrictions negotiated with China half way through the year, which resulted in a redistribution of market share to other developing countries. Comparisons with the USA indicate that trends are rather similar, although on that market more developing countries saw increases in their exports, partly cancelling out losses in the EU.

Originality/value

This is believed to be the first attempt to assess the real world impact of the liberalisation of the clothing sector.

Citation

Curran, L. (2007), "Clothing's big bang: the impact of the end of the ATC on developing country clothing suppliers", Journal of Fashion Marketing and Management, Vol. 11 No. 1, pp. 122-134. https://doi.org/10.1108/13612020710734445