Protectionism and free trade: a case of apparel imports to the United States and Japan from 1974 to 2004

This research revealed price and income elasticities and built the import demand model of China, Hong Kong, Mexico, Korea and Italy to the United States and Japan from 1974, the start of the MFA, to 2004, the end of the MFA. The study covers womens and girls apparel articles except sleepwear, not knitted or crocheted. The income and price elasticities and import demand models of the United States and Japan revealed insights about import and consumption pattern, apparel trade policy and apparel industry reality. The U.S. consumers are more price-sensitive but are purchasing luxury goods much faster when their income increases than Japanese consumers are. The study revealed the success of preferential treatment (NAFTA) on apparel imports and the failure of apparel import quotas. The findings also proved that the U.S. apparel industry is more labor cost focused than Japanese apparel industry.