The Economic North–South Divide

The Economic North–South Divide

Six Decades of Unequal Development

Kunibert Raffer and H. W. Singer

The Economic North–South Divide explores the structural roots of the debt crisis and considers the impact of debt management on North–South economic relations, exposing certain double standards that tilt global markets further against the South. Encouraged by recent successful opposition to neoliberalism, the authors finally propose ideas for a world where people seem to matter.

Chapter 13: Textiles and Apparel: Double Standards of Adjustment and Transition

Kunibert Raffer and H. W. Singer

Subjects: development studies, development economics, economics and finance, development economics

Extract

Textiles and clothing provide a very telling example of selective liberalization: the slow and gradual ‘adjustment’ of ICs contrasts with the quick liberalization of Southern economies. But they are by no means the only sectors where ICs protect their industries against Southern exports, while pressing for liberalization and opening of markets in the South. The OECD (1992, p.37, emphasis added) contended: Developing countries face higher tariffs and a larger range of non-tariff barriers than developed countries reflecting the fact that, in areas of their greatest comparative advantage, industrial countries face difficulties in implementing structural adjustment programmes (textiles, clothing, steel, etc.). The cost of these measures has been estimated to exceed the value of aid flows, but such measures do not take account of the most important aspect of these restrictions, which is that they retard entry into export-oriented industries which are most accessible to developing countries - namely commodity processing, light manufactures, and textiles and clothing. While developed countries have, in principle, encouraged developing countries to diversify into these kinds of exports and, indeed, the dynamic export-oriented developing countries have benefitted dramatically from access provisions applying in developed-country markets, trade policies in the developed countries often obstruct diversification. For many commodities, tariffs escalate on processing activities. When developing country exporters, including those in the very lowincome category such as Bangladesh, begin to have success, new barriers can suddenly be imposed, for example new quotas in the textiles sector, or antidumping actions and other selective trade-restricting provisions. To understand IC protectionism...

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