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The quotas were introduced in 1994 and they had as effect a big increase of prices.
An idea of what might happen if the quotas will be eliminated is given by the Japanese example as they refuse to join the quota system. China was not late in making a fierce entrance on Japanese market so that it gained a market share of 81% in the Japanese total imports.
Another idea is given by the US ‘ elimination of these quotas to some Chinese items. The result was an increase of 125% of the Chinese imports and a price reduction of 41%.
So, taking out the quotas will result in dropped prices and lowest profits for developed countries. In order to compete, manufacturers will have to reduce costs at all stages and offer finest quality products.
However, in March 2004 the Istanbul Declaration had the initiative to postpone the quotas removal until the end of 2007.
According to international consulting companies, by 2010 30% of the total output will be control by the top ten retailers. Thus, small players will be at big players merci and big players will be oriented mainly towards Chinese markets to obtain big volumes and small prices.
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