Abstract

This paper estimates the quantitative factors that lead to a growth in the US consumption of Chinese textiles after the global quota liberalization in 2005. The theoretical frameworks show that quotas should be thoroughly liberalized to benefit US consumers and the approach of free trade brings in national welfare gains to the US. The theories consider the following scenarios: (i) free trade; (ii) trade diversion of NAFTA; and (iii) function of market share. Utilizing panel data of HTS codes at the 6-digit levels from 1994 to 2007, the author employed three double log models with eight model specifications on each model to measure the determinants of the market shares of Chinese textiles in the US total textile imports. The empirical results suggest that US consumption of Chinese textiles rose from the ATC period to the Safeguard years majorly due to reductions in the prices of Chinese textiles. Aware of the centrality of the price determinants, the price measure of Mexican textiles under the protections of NAFTA and the income factor are also significant.

Advisor

Moledina, Amyaz

Department

Economics

Publication Date

2009

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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© Copyright 2009 Yufen Wu