Market disruption or the threat thereof constitutes grounds for restraining countries under the U.S. Multifibre Arrangement (MFA). Since 1980, however, countries accounting for very small shares of U.S. imports have been restrained. This study estimates the determinants of U.S. voluntary export restraints under MFA I and MFA II-III using a bivariate probit model with sample selection. Results show a shift from targeting large developing country exporters to targeting those that are small but have rapidly growing sales. This raises the cost of the MFA to the United States. It also suggests that expansion of exports by developing countries will be met by restrictions on market access. Copyright 1995 by MIT Press.

This paper tests two hypotheses regarding the impact of the U.S. Multifiber Arrangement restrictions on developing countries' exports of textiles and clothing to the United States: that the Multifibre Arrangement is a binding constraint on exporters; and that the arrangement encourages the growth of smaller exporters by restricting exports from major sellers. Pooled data on eight small Asian exporters over the period 1975-84 is used. Results strongly support the hypothesis that the Multifibre Arrangement has been a binding constraint. Although the arrangement appears to have diverted demand toward these smaller sellers, this effect is counteracted by slow growth in their own restraints. Copyright 1990 by MIT Press.