Teaching Case: Textiles and the Multi-Fiber Arrangement
An "oldie but goodie" this 1983 case (revised in 1990), is set in December 1981, when the international arrangement governing international trade in textiles is up for renewal. The US, Europe and developing countries must decide how to divide the international textile market. The debate in the case focuses on who wins and loses from protectionism. There are eight pages of text and eight more pages of data and exhibits.
This is an excellent case for teaching students about the sources of comparative advantage, and how that changes over time. It helps students identify the gains from trade and the costs of protectionism, while also outlining the basic internal political-economy concerns that generate protectionism. There's a lot of data in the case, so it also helps students to work with data presented in a variety of forms.
Context for Use
This case can effectively be used in courses in international trade, political economy, and development
Description and Teaching Materials
This case can be purchased from the Harvard Business School at:
Teaching Notes and Tips
Velenchik Teaching Notes for Textiles and the Multi-fiber Arrangement (Microsoft Word 69kB Jun1 09)
During class discussion you should be able to quickly see which students have understood the meaning of comparative advantage by the quality of the answers to the questions. The case can also be used as the basis of writing assignments, an example of which can be found at:
Velenchik Paper Assignment (Microsoft Word 115kB Jun1 09)