The following paper is based on the WTO’s liberalisation efforts in the textiles industry. It specifically studies the case of Turkey. Resulting from the WTO’s liberalisation efforts, the Turkish textiles market is facing various challenges. The paper is therefore occupied with proposing and critically analysing potential trade instruments to successfully realign the Turkish textiles industry. The measures taken into consideration are 1) a devaluation of the Turkish currency, 2) an introduction of subsidies with a corresponding increase in money supply, 3) a lowering of taxes on general textile employment, 4) the forging or deepening of new bilateral or multilateral trade agreements, 5) a shift towards higher value-add production, and 6).
Table of Contents
Introduction
Inner state level of analysis
Inter state level of analysis
Global level of analysis
Conclusion
Objectives and Topics
This paper aims to propose and critically analyze specific trade instruments designed to improve the competitiveness and realignment of the Turkish textile and clothing industry in response to the challenges posed by the WTO's liberalization efforts.
- Analysis of macroeconomic trade measures including currency devaluation and government subsidies.
- Evaluation of labor market policies and tax adjustments for textile employment.
- Examination of the role of bilateral and regional trade agreements.
- Strategic assessment of quality-focused branding initiatives like "Turquality®".
- Investigation of competitive positioning against emerging low-cost markets such as China, India, and Bangladesh.
Excerpt from the Book
Introduction
The textiles and clothing sector has remained outside the General Agreement on Tariffs and Trade (GATT), established in 1947, for more than four decades. As a consequence, international textiles and clothing trade has been subject to bilaterally negotiated quotas falling under the rules of the Multi-Fibre Agreement (MFA) of 1974. This regime ‘[…] provided for the application of selective quantitative restrictions when surges in imports of particular products caused, or threatened to cause, serious damage to the industry of the importing country. The MFA [constituted] a major departure from the basic GATT rules and particularly the principle of non discrimination.’
It should last another twenty years for the textiles and clothing sector to be integrated into the GATT rules. Following the end of the Uruguay Round of 1994, on January 1, 1995 the MFA was replaced by the Agreement on Textiles and Clothing (ATC). The ATC provided ‘[…] for the gradual dismantling of bilateral import quotas […]’ established under the MFA, over a ten-year period. The removal of the MFA quotas and the full integration of the textiles and clothing sector into the rules of the GATT was completed on January 1, 2005.
Summary of Chapters
Introduction: This chapter outlines the historical context of the textile industry, focusing on the transition from the Multi-Fibre Agreement (MFA) to the Agreement on Textiles and Clothing (ATC) under the GATT framework.
Inner state level of analysis: This section examines domestic policy measures, specifically currency devaluation, government subsidies, and tax reductions on employment, as tools to boost industry competitiveness.
Inter state level of analysis: This chapter investigates the importance of bilateral and regional trade agreements and the impact of the "Turquality®" branding program on enhancing Turkey's competitive position.
Global level of analysis: This part explores the potential for Turkey to gain a comparative advantage in cotton-based textiles, particularly in relation to global oil price fluctuations affecting synthetic fiber producers.
Conclusion: This final chapter synthesizes the findings and emphasizes the need for a comprehensive, intertwined package of trade measures to strengthen Turkey's standing in the global market.
Keywords
Textile industry, Turkey, Trade liberalization, WTO, ATC, Currency devaluation, Government subsidies, Employment taxes, Customs Union, Turquality®, Competitiveness, Global market, Macroeconomic framework, Cotton exports, Regional trade agreements.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on the challenges facing the Turkish textile and clothing industry due to global trade liberalization and proposes specific trade instruments to realign and improve its competitiveness.
What are the central themes discussed in the work?
The central themes include macroeconomic trade policies, the impact of international trade agreements, labor market dynamics, and branding strategies to differentiate Turkish products.
What is the primary goal of the study?
The primary goal is to provide a critical analysis of potential trade instruments—ranging from inner state policies to global strategies—that can help the Turkish textile sector successfully adapt to modern competitive pressures.
Which scientific approach does the author use?
The author employs a macroeconomic analytical framework, evaluating how policy decisions at the state, interstate, and global levels impact the textile market's performance.
What is covered in the main body of the text?
The main body systematically evaluates three categories of trade measures: domestic adjustments (currency, subsidies, taxes), international cooperation (trade agreements), and global market strategies (branding and resource-based advantages).
Which keywords best characterize the work?
Key terms include Turkish textile industry, trade liberalization, competitiveness, macroeconomic policy, and global supply chain integration.
How does the author suggest Turkey should handle currency devaluation?
The author argues that devaluation should only be a short-term, carefully considered measure because it carries risks of higher inflation and may conflict with other macroeconomic stability goals.
Why is the "Turquality®" program considered important?
It is viewed as a sustainable competitive strategy that allows Turkish manufacturers to move toward high-end, value-added production, distancing themselves from price-based competition with low-cost emerging nations.
What role do bilateral trade agreements play in this analysis?
The analysis highlights them as essential tools for reducing trade costs and leveraging Turkey's proximity to the European market to maintain a competitive advantage.
- Arbeit zitieren
- Anonym (Autor:in), 2010, Trade and Development. Realigning the Textile Industry in Turkey, München, GRIN Verlag, https://www.grin.com/document/382042
