The United States has been a net importer of textiles
and clothing in the past thirty years, the most important suppliers being
developing countries and the EC. Textiles and clothing are one of the EC's most
important items exported to the United States.
The principal objectives of this study are to use
sound theoretical models, the Rotterdam model and
the Rotterdam mixed demand system to estimate U.S. import demand functions for eleven textile and clothing
products from the EC and estimate the impact of the Multi-Fiber Arrangement
(MFA) on U.S. import demand for the textile and
clothing products from the EC. The results indicate that increased imports of
certain textile and clothing products from the MFA countries has decreased U.S.
import demand for these products from the EC.
This study also deals with two other important issues
in demand study: verifying the coherency between
the data and the theoretical model and testing theoretical restrictions on the
model. The results indicate that the systems we estimate are demand systems in which prices are predetermined or
nearly predetermined. The theoretical restrictions on the demand systems are valid for disaggregated
data.
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