Business Professor Comments on Impact of Textile Quota Elimination

August 02, 2004

Contact:
Cynthia S. Shaw
(202) 687-4080
css27@georgetown.edu

Business Professor Comments on Impact of Textile Quota Elimination

Textile and apparel trade groups representing 65 countries are scheduled to meet with the World Trade Organization this week to lobby against the pending elimination of a global quota system for the exportation of textiles and apparel, scheduled for January 1, 2005. The elimination of the quota was negotiated in 1994 as part of the WTO's plan to integrate the textile and apparel industry fully into GATT rules.

Associate Professor Pietra Rivoli teaches corporate and international finance and socially responsible investing at the Georgetown University's McDonough School of Business, where she also leads MBA residencies to Asia.

Rivoli commented on the impact of the textile quota elimination both in the United States and abroad:

"The removal of the quota will strike a hard blow to U.S. textile and apparel manufacturers, but the effects will be even worse for a number of developing countries who are highly dependent on textiles and apparel exports. If the experience with the last round of quota liberalization is a guide, China will increase its market share of liberalized categories by more than 500 percent, at the expense of several dozen small countries. Last month, the Bush administration rejected a request from members of Congress to persuade the WTO to consider a delay in the phase-out of the quota. As we countdown to the November election, will the textile producing swing states be able to use their power to reverse a trade policy that was agreed upon a decade ago? It remains to be seen. What is clear, however, is that trade flows in this industry are a function of the conflicts and negotiations between nations as well as market competition."

Rivoli is the author of The Travels of a T-Shirt in the Global Economy: An Economist Examines the Power, Problems, and Politics of World Trade, forthcoming from John Wiley & Sons. She specializes in finance, international business, and social issues in business. She holds a Ph.D. in finance and international economics and a B.S. in finance from the University of Florida.

Editor's Note: Reporters interested in talking with Professor Rivoli may contact Jessica Botta, Director of Communications, at (202) 687-4080 or via email to jab92@georgetown.edu.