TPP’s Potential Impacts On China’s Textiles And Apparel Exports To The United States

The Trans-Pacific Partnership Agreement, namely TPP, has been highly concerned by many countries since the United States joined in the TPP. The number of TPP’s members is also increasing. Up to now, there are 12 members. South Korea also has a strong interest in TPP. TPP will become the largest FTA of the Asia Pacific region with high standards and rules. TPP’s development has been widely concerned in the world. But China has been ruled out. In academic circles, scholars generally believe that the objective of the United States, is to balance China, and to curb China’s influence in the Asia Pacific region.Although China is not invited to join in the TPP negotiations, the members of TPP occupy an important position in China’s textiles and apparel trade, especially the United States market. The United States is the second largest exports destination of China’s textiles and apparel, and is also the biggest textiles and apparel consuming and import country in the world, its textiles and apparel imports occupy about twenty percent of the total world imports. The huge market attracts a lot of textiles and apparel export countries and regions, and is one of the markets that the textiles and apparel exporters want to compete. China, as the first textiles and apparel import source of America, is not the member of TPP. TPP’s "zero tariff’and other high standards will have a significant impact on China’s textiles and apparel exports to the United States, and may bring a great challenge to the entire textiles and apparel industry of China in the future. Therefore, it has a great practical significance to analyze the impacts of TPP on China’s textiles and apparel industry by selecting the United States market as the research object. It could help China’s state and enterprises, especially the enterprises that export to America, early to prepare the appropriate developing strategies in order to enhance the competitiveness of China’s textiles and apparel, promote the sustained and healthy development of the textiles and apparel industry, and exert the ability to boost the domestic employment and raise the income level.On the basis of the relevant theory, this paper uses the method of combining theoretical analysis and empirical analysis to analyze. The main points of this paper are as follows, firstly, this paper analyzes the import status of American textiles and apparel, and then selects the importing countries which are the top of the rankings, and are the members of TPP. The five countries are Mexico, Canada, Mexico, Japan and South Korea. They are the main competitors in the US market. Then this paper does the comparative analysis on the competition relationship between China and its five major competitors textiles and apparel in the United States market, including the comparison of export scale, export commodity structure, and the revealed symmetric comparative advantage index. Then, combining with the current international situation, the paper analyzed the problems of China’s textiles and apparel exports to America.Secondly, this paper does the quantitative analysis of TPP’s impacts on China’s textiles and apparel exports to US based on the GTAP model, which is the core of this paper. It establishes five situational models, and put the tariff as a shock variable to carry out the quantitative analysis about TPP’s impacts on China’s textiles and apparel exports to US through the calculation of CEG model. Do the early estimation about the impact of China’s textiles and apparel exports to US, when the import tariff of TPP’s member reduces to zero. Then the quantitative analysis results of five kinds of scenarios are compared and analyzed. Finally, according to the analysis results and the existing problems, the relevant policy recommendations are put forward from five aspects.The main research conclusions of this paper are as follows. Firstly, Vietnam is China’s largest competitor in the United States market, and its growth potential is huge. Under TPP’s framework, China, the United States and Vietnam are three major interests in the field of textiles and apparel, and TPP may make Vietnam become the biggest beneficiary of textiles and apparel exports. After TPP’s related terms is implemented, it will increase the TPP’s members, especially Vietnam’s textiles and apparel exports to the United States, and reduce China’s and other countries’textiles and apparel exports to the United States, especially apparel. Secondly, TPP’s tariff reduction does not increase Mexico and Canada’s textiles and apparel exports to US, instead of other regional members occupy their market share, because that they have established the North American Free Trade Area with America in 1994, and the NAFTA members have cancelled textiles and apparel tariffs and import quotas in January 2004. Thirdly, TPP will also increase Japan and South Korea’s textiles and apparel exports to the United States, especially textiles. Fourthly, TPP will reduce China’s textiles and apparel exports to the United States, in particular, apparel. Fifthly, if China joins in the TPP, it will greatly increase China’s textiles and apparel exports to the United States. China’s textiles and apparel exports increases by a considerable proportion, Vietnamese apparel increases more than textiles.