The impact of China's accession into the World Trade Organization and the Agreement on Textiles and Clothing

This thesis analyzes the impact of the Agreement on Textiles and Clothing (ATC) and the accession of China and Taiwan to the World Trade Organization (WTO) by means of a computable general equilibrium model of world trade and production. The model modifies the Global Trade Analysis Project (GTAP) model to explicitly take into account re-export trade flows and the production of services by local and foreign firms in China. The model segregates all bilateral trade flows into direct trade and indirect trade (re-exports) as the latter plays an important role in the foreign trade of the China, Taiwan and Hong Kong. A re-export markup, representing the cost of trade services provided by the Hong Kong economy, is added to the price of re-exports. The supply of these services by the trade and transport sector in Hong Kong is also explicitly modeled.; The division of the services sectors in China into local versus foreign production is another innovation in the thesis. This facilitates the analysis of China's commitments to open its services sectors to foreign investment. Local and foreign services providers are modeled as direct competitors, each producing services that are substitutable for one another. The two groups also compete for factors of production.; The results show that the ATC together with the accession of China and Taiwan to the WTO will bring enormous gains to the world economy and alter the pattern of trade and specialization. The world, as a whole, stands to benefit from an increase in total welfare in year 2005 valued at US{dollar}35.6 billion when all of these agreements are fully implemented. The welfare gains, however, is uneven.; China has the most to gain from the WTO.; Among the major trading partners of the Greater China Area, Japan will enjoy substantial gains from being the area's largest trading partner.; The U.S. and EU will benefit mostly from the removal of MFA quotas and only slightly from China's and Taiwan's accession to the WTO due to the small expansion of their overall exports.; The Southeast Asian Countries and the South Asian Sub-Continent will obtain moderate gains from the ATC and China and Taiwan's entry into the WTO. (Abstract shortened by UMI.)...