2015b). Although most studies believe that TPP will benet the US economy as a whole
(such as Petri et al., 2011;Schott et al., 2013), the potential impact of TPP on the US T&A
industry, especially the manufacturing aspect, is far from clear. On the one hand, TPP
may create additional market access opportunities for the US T&A industry when other
TPP members increase import demand for “Made in USA” products as result of lowered
tariff and non-tariff barriers (NTBs) (Fergusson et al., 2015). On the other hand, it is of
grave concerns that TPP may also result in a substantial increase of T&A imports to the
US market and negatively affect US domestic T&A manufacturing, especially the
survival of those small- and medium-sized factories (Bergman, 2015). To further add to
the uncertainty, TPP has the potential to disrupt the current Western-hemisphere T&A
supply chain, within which the USA is playing a critical role (Frederick et al., 2015;Lu,
The main purpose of this study is to quantitatively evaluate the potential impact of
the implementation of TPP on US T&A manufacturing. Although some studies have
provided assessments of the economic impact of TPP, most of them were conducted at
the macroeconomic level (Petri et al., 2011;Schott et al., 2013;Li and Whalley, 2014). A
few studies have started to specically look at the impact of TPP on the T&A sector
(Nguyen, 2014;Lu, 2015a,2015b); however, the scope of these studies was limited to
related trade ows only. The results of this study instead will deepen our understanding
of the impact of TPP further down to the manufacturing activity in the T&A sector,
which has seldom been studied. For the academia and the T&A business community,
ndings of this study will address their particular concerns about the new market
environment and the possible scenarios after the implementation of TPP. For
policymakers, results of this study will provide valuable inputs that could support the
T&A sectoral negotiation under TPP and related trade policy-making.
The paper is composed of four parts. The second part provides an overview of related
theories and literatures that suggest the potential impact of TPP on US T&A
manufacturing. The third part is a detailed description of the research methods and data
source of this study. The fourth part presents empirical results and discussion of them.
The last part includes key ndings and discussion of future research agendas.
2. Literature review
To holistically evaluate how TPP might affect US T&A manufacturing, the following
three aspects need to be critically reviewed: rst, what are the key provisions under TPP
that are related to the T&A sector. Second, what is the state of the US T&A industry and
its current trade pattern in the TPP region, both with TPP members and other
non-member stakeholders. Third, how will “rules of the game” under TPP shift current
trade pattern in the TPP region, and consequentially affect US T&A manufacturing.
The following sections will address each of the above three aspects accordingly.
2.1 Key TPP provisions for the textile and apparel sector
T&A is one of the most complex chapters under TPP and involves several unique trade
policy issues that apply to the sector only (Fergusson et al., 2015). Specically, the T&A
chapter under TPP concentrates on the following two issues.
One is tariff elimination. According to the released text of TPP, import tariffs on
manufactured products, including T&A, among its members will be gradually
eliminated through a 13-year phase-out period (USTR, 2016). In general, T&A products