ABSTRACT
This chapter shows that the literature has documented the severe impacts of trade liberalization on the garment industry. Traditionally, the United States garment industry has been characterized by low or insignificant concentration. Trade Adjustment Assistance (TAA) benefits to displaced workers make up a significant percentage of the costs that displaced workers bear in the import impacted garment industry. The 67 per cent estimate of TAA benefits to displaced garment workers is most likely conservative. The chapter considers the welfare effect of liberalization and then provides a reconciliation of Computational General Equilibrium estimate of benefits from the liberalization of the economy. The theoretical literature has clearly established the benefits of trade liberalization to the economy. Traditional estimates of benefits from trade liberalization revolve around both the partial equilibrium (PE) and general equilibrium viewpoints. On the PE side, the gains appear much smaller.
