The purpose of this study is two-fold: assessing trade policy towards textiles in the main exporting south Mediterranean countries and in their major export markets (the EU and the USA) and analyzing the likely impact of full implementation of the Agreement on Textile and Clothing (ATC) in light of regional expansion of the EU to integrate central and east European countries. To this end, restrictions to external trade faced by seven south Mediterranean countries (Egypt, Jordan, Lebanon, Morocco, Syria, Tunisia and Turkey) and the preferential treatment they enjoy are highlighted; as well as the actual progress achieved under the ATC and increased access provided are also reviewed. The potential impacts of regional integration in the Mediterranean region and with the enlarged EU on the competitiveness of this industry domestically and in EU markets are assessed. The analysis shows that the impact of the present quota system on the Mediterranean countries should not be exaggerated. Jordanian, Lebanese, Tunisian and Moroccan exports are not subject to any quota limitations in the EU and the USA. Only Turkey and Egypt are subject to quotas on textiles and clothing in US markets, while Syrian yarns and Egyptian yarns and fabrics are restrained in the EU by duty free quotas.
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