The Forces Shaping World Cotton Consumption After the Multifiber Arrangement

by Stephen MacDonald and Thomas Vollrath

The phaseout of the Multifiber Arrangement (MFA) and other forces are reshaping world textile and cotton markets. The elimination of the MFA is helping reduce clothing prices in the United States and the EU and effecting a shift in industrial demand for cotton to China, India, and Pakistan. At the same time, world cotton consumption has accelerated along with economic growth since 1999, especially in developing Asia, where an emerging consumer society is driving increases in household consumption of clothing and other cotton products. In the long run, income growth and technical change have more of an effect on world cotton consumption than the elimination of the MFA.

Keywords: Textiles, cotton, clothing, apparel, Multifiber Arrangement, quotas, trade policy, China, India, fiber, income

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