Expiring Temporary Safeguards on Apparel Trade Implications for U.S. Cotton

The 1995 Agreement on Textiles and Clothing (ATC) provided for the calculated liberalization of the textiles and apparel sectors over a 10-year period except for some safeguard measures ending on December 31, 2008. These safeguard measures allowed for import restrictions by the U.S. on certain categories of cotton apparel from China. Using a price equilibrium simulation model of the U.S. cotton and cotton apparel markets, results point to lower cotton apparel prices in the U.S. by as much as $0.11/lb while U.S. cotton prices decline by less than $0.01/lb once these safeguards expire