The Restrictiveness of the MFA: New Evidence on Eastern Europe Exports to EC

This chapter examines the dominant features of the MFA and its impact on Eastern Europe's Exports in the EU market. We wonder whether this protection is effective or not and to what extent it is able to slow down the restructuring process in East Europe. We concentrate on the five conuntries that have signed Association Agreements with the EU (hereafter EE5). Sections II and III give some background on the MFA and the Association Agreements negotiated betweeen the EU and EE5. Section IV briefly reviews the relevant literature on the impact of the MFA on EE5 trade in textiles and clothing. Section V analyses hisorical and future MFA quota growth for the EE5. In section VI and VII we look at the recent EE5 export trends both for the direct trade and the Outward Processing Traffic (OPT) and we compute several restrictiveness indexes, some of which are commonly used in the literature on MFA. A concluding sectino sums up our findings.